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Tuesday, 06 September 11
INDONESIAS PROPOSED COAL EXPORT BAN MAY HAVE IMPACT ON THE INDIAN POWER SECTOR - DIPESH DIPU
.jpg) COALspot.com - This is a special interview about Indonesian proposed coal export ban by 2014, with Mr. Dipesh Dipu, Director of Deloitte Touche Tohmatsu, India.
The Indonesian government is currently in the process of drafting a new regulation that could ban the export of low-grade coal by January 12, 2014. This is likely to apply to coal below 5700 kcal/kg on air dried basis in value.
As of now Indonesia is producing around 150 million tons of coal with calorific value below 5700 GAD (according to chairman of Indonesian coal mining association). However by 2014, there are possibilities the total production of below 5700 GAD coal may reach more than 200 million per annum.
Will Indonesian coal export ban impact on the Indian fuel requirements?
The earlier grade of coal that was being considered for proposed ban has GCV of 5100 kcal/kg of less (adb), which can be comparable to 3800-4200 kcal/kg (arb) domestic coal available in India. This grade of coal has found favor in India primarily due to likely price advantage but economics of power generation based on such grade of imported coal may be a suspect. This considering that such grades of coal from Indonesia typically have high moisture content, which makes transportation cost per unit of energy generated higher. The quantum of the low grade of coal (<5100 kcal/kg adb) procured from Indonesia is likely to remain relatively low.
However, if the new definition of low grade coal is applied (<5700 kcal/kg adb), it may be reasonable to believe that such a ban may have impact on the Indian power sector as volumes in this grade of coal are expected to rise in the proportion of coal exports to India. Several of the acquisitions made by Indian power generation companies in Indonesia have been in coal blocks that will produce coal of this grade, and a blanket ban on the exports can jeopardize power plant development in India.
On the other hand, the domestic Indonesian market may not be prepared to consume all the coal mined of this grade in view of the power generation capacity addition plans in Indonesia. In such a case, the coal mine development is likely to be deferred. The Indonesian law makers may need to reconsider domestic market demand, investment climate in coal sector and impact of the legislation on the export revenues.
What is the alternative source for Indian power industry if the proposed coal export ban come into effect by 2014?
Indian power generation companies have been forced to look out for coal assets abroad due to the investment and regulatory environment within the country. India boasts of more than 110 billion tonnes of coal reserves, which largely fall within a 300 meters of depth. If the regulatory and investment environment is amended to allow greater participation of private sector Indian dependence on imports will be reduced.
However, for imports, India will continue to look at Indonesia, South Africa, Australia and newer destinations like Mozambique and Columbia. But these sources also have constraints, domestic demands in South Africa is likely to restrict quantum jump in exports out of South Africa. Indonesia has also proposed domestic market obligations. Mozambique may have infrastructure constraints for large volumes of coal being transported from Tete province to ports of Maputo, Ncala or Beira. Australian coal is of high quality but may have higher costs of mining and transport.
What would be the additional cost if Indian consumers switch their sourcing origin from Indonesia?
Indonesia has competitive advantage due to its geographical closeness. However, on a per tonne basis, assuming comparable quality, costs of transport may make marginal difference when compared with South Africa and Mozambique.
When compared to Australian coal, due to the high quality, cost of energy may well be comparable even though shipping costs are higher. Between Indonesian coal (5500 kcal/kg adb priced at USD 90 per tonne) and Australian coal (6500 kcal/kg adb priced at USD 120 per tonne), indicative variable cost difference of power generation may be about Indian Rupees 0.20 to 0.30 per kWh (electricity unit) in favor of Indonesian coal.
Will it affect Indian economy growth or this coal export ban is ignorable as India can easily identify alternative sources of fuel?
The magnitude of growth in power generation in India will necessarily mean that coal will remain the mainstay. Natural gas has had issues of availability. Nuclear plant development is facing socio-political challenge in view of the risks of technology failure. Development of hydel power has also faced issues of land acquisition, rehabilitation & resettlement apart from the technical issues of hydro-geological features. Renewable sources such as solar and wind generation are still projected to constitute a small portion of India power generation mix. Identifying an alternative source that can match coal in its accessibility, availability and affordability in the context of scale of capacity addition required in India is a challenge.
What is the Indian government's role on this issue, whether government has to come out with the solution such as easing Indian mining and environment law, open up mining for foreigners, G2G arrangement, etc…?
There is a need to look at domestic sources with pro-active and constructive approach and make all necessary legal and statutory amendments that make the resources available and mineable. Easing the regulations may not be one of such measures but making those regulations work in sync with each other in a time bound and predictable manner must certainly be.
There is certainly a case for opening the domestic coal sector for private participation, including independent miners, and for foreign participation so that newer technology and enhanced scale of operations are implemented in India. The regulation also needs to permit risk capital to come in for prospecting and exploration.
For imports the G2G relations can be leveraged to secure coal assets. India has good relationship with Indonesia and has also signed a tax treaty with Mozambique in 2010 which will facilitate investments. Government may also engage with these countries to ease exports to India and extend fiscal support to coal mining companies investing in mining and associated infrastructure development.
About Dipesh Dipu
Dipesh Dipu works as Director with Deloitte Touche Tohmatsu India Pvt. Ltd in the Energy and Resources consulting practice of the firm and anchors the Firm’s initiative in the mining and metals sectors.
He is a mining engineering graduate from Indian School of Mines and is a Chartered Financial Analyst (CFA). He has also done executive program in business management from Indian Institute of Management Calcutta. Dipesh has recently been awarded the Abheraj Baldota Gold Medal for the Young Mining Engineer of the Year 2007 by the Mining Engineers’ Association of India in recognition of his contributions in the improvement of mining industry in India.
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Friday, 30 March 12
RECOND NUMBERS SURROUNDING THE SUPRAMAX DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Last year proved to be both a record year in the number of deliveries of dry bulkers between 40,000dwt and 64,000dwt, as well as a record year in th ...
Thursday, 29 March 12
DRY BULK EDGED FURTHER UP, ON HEALTHY DEMAND FOR MOST SHIP TYPES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With capesize vessels finally reappearing in demand, the dry bulk market had an easier task of rising yesterday, as the BDI (Baltic Dry Index) reach ...
Thursday, 29 March 12
ADARO FY11 NET INCOME JUMPS 124% - INSIDER STORIES
Insider Stories reported that, PT Adaro Energy Tbk (ADRO) today announced a 124% jump in net income to US$552 million last year or US$0.017 a share. ...
Wednesday, 28 March 12
CUESTA HAS RECEIVED APPLICATIONS AND FIRM BIDS IN EXCESS OF $9 MILLION FOR THE COMPANYS IPO
COALspot.com - The Directors of Cuesta Coal Limited (ASX:CQC) have announced that today it has received applications and firm bids in excess of $9 m ...
Wednesday, 28 March 12
ORPHEUS ENERGY TO COMMENCE JORC DRILLING AT ADK PROJECT
COALspot.com - Indonesian coal explorer and producer, Orpheus Energy (ASX:OEG), have today announced that the company is about to commence a drillin ...
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- International Coal Ventures Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Australian Coal Association
- Anglo American - United Kingdom
- Ambuja Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coalindo Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Orica Australia Pty. Ltd.
- Ind-Barath Power Infra Limited - India
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- Bhushan Steel Limited - India
- Goldman Sachs - Singapore
- Planning Commission, India
- Bangladesh Power Developement Board
- South Luzon Thermal Energy Corporation
- Petron Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Eastern Coal Council - USA
- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- European Bulk Services B.V. - Netherlands
- Bhoruka Overseas - Indonesia
- IHS Mccloskey Coal Group - USA
- Global Green Power PLC Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Link Ltd, New Zealand
- White Energy Company Limited
- Gujarat Sidhee Cement - India
- Electricity Authority, New Zealand
- Georgia Ports Authority, United States
- Mercuria Energy - Indonesia
- Heidelberg Cement - Germany
- Deloitte Consulting - India
- Kaltim Prima Coal - Indonesia
- Bhatia International Limited - India
- Kartika Selabumi Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Mintek Dendrill Indonesia
- Therma Luzon, Inc, Philippines
- Standard Chartered Bank - UAE
- Siam City Cement PLC, Thailand
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Orica Mining Services - Indonesia
- Sical Logistics Limited - India
- Ministry of Mines - Canada
- Semirara Mining and Power Corporation, Philippines
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- McConnell Dowell - Australia
- Jorong Barutama Greston.PT - Indonesia
- Indika Energy - Indonesia
- Vedanta Resources Plc - India
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining Corp, Philippines
- Bukit Makmur.PT - Indonesia
- MS Steel International - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Samtan Co., Ltd - South Korea
- PowerSource Philippines DevCo
- Attock Cement Pakistan Limited
- Independent Power Producers Association of India
- Chettinad Cement Corporation Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- Carbofer General Trading SA - India
- Salva Resources Pvt Ltd - India
- Sojitz Corporation - Japan
- Edison Trading Spa - Italy
- Eastern Energy - Thailand
- Port Waratah Coal Services - Australia
- Banpu Public Company Limited - Thailand
- Ministry of Finance - Indonesia
- Price Waterhouse Coopers - Russia
- SN Aboitiz Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Merrill Lynch Commodities Europe
- Bayan Resources Tbk. - Indonesia
- Africa Commodities Group - South Africa
- Power Finance Corporation Ltd., India
- Mercator Lines Limited - India
- Savvy Resources Ltd - HongKong
- Sree Jayajothi Cements Limited - India
- Indian Energy Exchange, India
- The State Trading Corporation of India Ltd
- Sarangani Energy Corporation, Philippines
- Cement Manufacturers Association - India
- Karaikal Port Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Formosa Plastics Group - Taiwan
- Jindal Steel & Power Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- The University of Queensland
- Indonesian Coal Mining Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sakthi Sugars Limited - India
- AsiaOL BioFuels Corp., Philippines
- Alfred C Toepfer International GmbH - Germany
- Ministry of Transport, Egypt
- PetroVietnam Power Coal Import and Supply Company
- London Commodity Brokers - England
- Madhucon Powers Ltd - India
- TeaM Sual Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- Posco Energy - South Korea
- Coal and Oil Company - UAE
- Electricity Generating Authority of Thailand
- Central Java Power - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Tamil Nadu electricity Board
- Miang Besar Coal Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- New Zealand Coal & Carbon
- Romanian Commodities Exchange
- Xindia Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- OPG Power Generation Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- San Jose City I Power Corp, Philippines
- Interocean Group of Companies - India
- Dalmia Cement Bharat India
- Bahari Cakrawala Sebuku - Indonesia
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- Wilmar Investment Holdings
- Thiess Contractors Indonesia
- Medco Energi Mining Internasional
- Trasteel International SA, Italy
- Bukit Baiduri Energy - Indonesia
- Minerals Council of Australia
- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
- Singapore Mercantile Exchange
- Siam City Cement - Thailand
- The Treasury - Australian Government
- Global Business Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Antam Resourcindo - Indonesia
- Aditya Birla Group - India
- Pendopo Energi Batubara - Indonesia
- GMR Energy Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Uttam Galva Steels Limited - India
- Parliament of New Zealand
- Central Electricity Authority - India
- PTC India Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Indian Oil Corporation Limited
- Grasim Industreis Ltd - India
- SMG Consultants - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kobexindo Tractors - Indoneisa
- Altura Mining Limited, Indonesia
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Malabar Cements Ltd - India
- Baramulti Group, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kideco Jaya Agung - Indonesia
- Rio Tinto Coal - Australia
- Straits Asia Resources Limited - Singapore
- Timah Investasi Mineral - Indoneisa
- Vizag Seaport Private Limited - India
- Global Coal Blending Company Limited - Australia
- Kumho Petrochemical, South Korea
- Borneo Indobara - Indonesia
- Bulk Trading Sa - Switzerland
- Agrawal Coal Company - India
- Tata Chemicals Ltd - India
- Thai Mozambique Logistica
- Star Paper Mills Limited - India
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- Barasentosa Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Lanco Infratech Ltd - India
- Australian Commodity Traders Exchange
- Mjunction Services Limited - India
- Kalimantan Lumbung Energi - Indonesia
- SMC Global Power, Philippines
- Indogreen Group - Indonesia
- Videocon Industries ltd - India
- GVK Power & Infra Limited - India
- Oldendorff Carriers - Singapore
- VISA Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Larsen & Toubro Limited - India
- Ceylon Electricity Board - Sri Lanka
- Metalloyd Limited - United Kingdom
- ASAPP Information Group - India
- Rashtriya Ispat Nigam Limited - India
- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- LBH Netherlands Bv - Netherlands
- Coastal Gujarat Power Limited - India
- India Bulls Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Vijayanagar Sugar Pvt Ltd - India
- Chamber of Mines of South Africa
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