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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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Wednesday, 01 February 12
2% OF IBPS TOTAL CONCESSION AREA CONTAINS TOTAL COAL RESOURCE OF 56.1 MILLION TON
COALspot.com - PT. Britmindo, a mine consulting firm, has finalized PT. Insani Bara Perkasa (IBP) first JORC (Joint Ore Reserves Committee) res ...
Tuesday, 31 January 12
THERE ARE MANY GOOD REASONS FOR COAL IN GERMANY - DR CIESLIK
COALspot.com - "The year 2011 was again marked by many changes on the markets and energy policies, at times in line with expectations, but at o ...
Tuesday, 31 January 12
DRY BULK MARKET KEEPS FALLING FOR WORST MONTH IN YEARS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market didn't manage to put a halt in its downfall, with the industry's benchmark, the BDI (Baltic Dry Index), posting yet another fa ...
Monday, 30 January 12
CHINA'S HUNGER FOR COAL LEAVES DENT IN PENNSYLVANIA'S SUPPLY - THOMAS LESKIN
With the price of heating oil on the rise, one of Pennsylvania's greatest natural resources - coal - is in high demand, and not just locally.
Et ...
Saturday, 28 January 12
WILL FREIGHT MARKET STABILIZE FROM NEXT WEEK?
COALspot.com - The markets continued to soften with BDI at 663 points down by 15.78 pct closing at 726 points and cape index was down by 5.73 pct cl ...
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- McConnell Dowell - Australia
- Gujarat Sidhee Cement - India
- Australian Commodity Traders Exchange
- Bukit Makmur.PT - Indonesia
- Agrawal Coal Company - India
- Larsen & Toubro Limited - India
- Petron Corporation, Philippines
- Energy Link Ltd, New Zealand
- Heidelberg Cement - Germany
- GMR Energy Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Vedanta Resources Plc - India
- Indogreen Group - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Anglo American - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- Indian Oil Corporation Limited
- Indian Energy Exchange, India
- Gujarat Mineral Development Corp Ltd - India
- SMC Global Power, Philippines
- Aditya Birla Group - India
- IEA Clean Coal Centre - UK
- Global Coal Blending Company Limited - Australia
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Dalmia Cement Bharat India
- Ministry of Transport, Egypt
- Bukit Asam (Persero) Tbk - Indonesia
- Carbofer General Trading SA - India
- Sarangani Energy Corporation, Philippines
- Siam City Cement - Thailand
- Chamber of Mines of South Africa
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Kohat Cement Company Ltd. - Pakistan
- GN Power Mariveles Coal Plant, Philippines
- Baramulti Group, Indonesia
- Bharathi Cement Corporation - India
- Kobexindo Tractors - Indoneisa
- Simpson Spence & Young - Indonesia
- Leighton Contractors Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- Minerals Council of Australia
- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- Bhatia International Limited - India
- Thiess Contractors Indonesia
- Global Green Power PLC Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SN Aboitiz Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Manunggal Multi Energi - Indonesia
- Singapore Mercantile Exchange
- Billiton Holdings Pty Ltd - Australia
- Planning Commission, India
- Energy Development Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Meralco Power Generation, Philippines
- Uttam Galva Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Marubeni Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- SMG Consultants - Indonesia
- Kideco Jaya Agung - Indonesia
- Iligan Light & Power Inc, Philippines
- Videocon Industries ltd - India
- OPG Power Generation Pvt Ltd - India
- Coal and Oil Company - UAE
- Commonwealth Bank - Australia
- Cigading International Bulk Terminal - Indonesia
- Ministry of Mines - Canada
- Power Finance Corporation Ltd., India
- London Commodity Brokers - England
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- Trasteel International SA, Italy
- Ambuja Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- PetroVietnam Power Coal Import and Supply Company
- Sakthi Sugars Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Orica Australia Pty. Ltd.
- Indika Energy - Indonesia
- Latin American Coal - Colombia
- Renaissance Capital - South Africa
- Ind-Barath Power Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Madhucon Powers Ltd - India
- Antam Resourcindo - Indonesia
- PowerSource Philippines DevCo
- Metalloyd Limited - United Kingdom
- Borneo Indobara - Indonesia
- Goldman Sachs - Singapore
- Electricity Authority, New Zealand
- Tamil Nadu electricity Board
- India Bulls Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercuria Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Grasim Industreis Ltd - India
- Essar Steel Hazira Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Bhoruka Overseas - Indonesia
- Australian Coal Association
- Bangladesh Power Developement Board
- White Energy Company Limited
- Pendopo Energi Batubara - Indonesia
- Indonesian Coal Mining Association
- VISA Power Limited - India
- Posco Energy - South Korea
- CIMB Investment Bank - Malaysia
- Cement Manufacturers Association - India
- Aboitiz Power Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Sree Jayajothi Cements Limited - India
- IHS Mccloskey Coal Group - USA
- The University of Queensland
- Gujarat Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Star Paper Mills Limited - India
- Binh Thuan Hamico - Vietnam
- PTC India Limited - India
- Xindia Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Kaltim Prima Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Semirara Mining Corp, Philippines
- Deloitte Consulting - India
- Parry Sugars Refinery, India
- Wilmar Investment Holdings
- Globalindo Alam Lestari - Indonesia
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- New Zealand Coal & Carbon
- CNBM International Corporation - China
- Eastern Energy - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Finance - Indonesia
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- Parliament of New Zealand
- ICICI Bank Limited - India
- Tata Chemicals Ltd - India
- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- Malabar Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Maheswari Brothers Coal Limited - India
- Bulk Trading Sa - Switzerland
- Georgia Ports Authority, United States
- Orica Mining Services - Indonesia
- Coastal Gujarat Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Bayan Resources Tbk. - Indonesia
- South Luzon Thermal Energy Corporation
- Port Waratah Coal Services - Australia
- Karaikal Port Pvt Ltd - India
- ASAPP Information Group - India
- Mintek Dendrill Indonesia
- Kepco SPC Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Toyota Tsusho Corporation, Japan
- Merrill Lynch Commodities Europe
- Samtan Co., Ltd - South Korea
- Kumho Petrochemical, South Korea
- Krishnapatnam Port Company Ltd. - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Coal Council - USA
- Romanian Commodities Exchange
- The State Trading Corporation of India Ltd
- Interocean Group of Companies - India
- Bukit Baiduri Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Edison Trading Spa - Italy
- Coalindo Energy - Indonesia
- Siam City Cement PLC, Thailand
- Thai Mozambique Logistica
- Standard Chartered Bank - UAE
- Global Business Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Attock Cement Pakistan Limited
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- Mercator Lines Limited - India
- Kapuas Tunggal Persada - Indonesia
- Banpu Public Company Limited - Thailand
- Sical Logistics Limited - India
- Central Electricity Authority - India
- Directorate General of MIneral and Coal - Indonesia
- Electricity Generating Authority of Thailand
- TeaM Sual Corporation - Philippines
- Economic Council, Georgia
- Ceylon Electricity Board - Sri Lanka
- Sojitz Corporation - Japan
- MS Steel International - UAE
- Rio Tinto Coal - Australia
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