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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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Thursday, 22 December 11
RI WILL NOT PLAY CATCH-UP WITH GLOBAL COAL DEMAND - THE JAKARTA POST
The Jakarta Post reported that, the International Energy Agency (IEA) has predicted in its Coal Market Report 2011 that over the next five years, gl ...
Thursday, 22 December 11
DRY BULK MARKET KEEPS LOSING TRACTION AHEAD OF HOLIDAY SEASON - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept retreating in the middle of the week, as charterers seem to be looking towards the holiday season and the start of the new ye ...
Tuesday, 20 December 11
THE COAL IMPORT INTO CHINA WAS QUIETER AS COAL STOCKS WERE AT HIGH LEVELS - BRS
The BDI ended the week at 1888 points (-1.8%), the BCI corrected to 3572 (-3.4%), the BPI was up at 1,775 (+3.6%), the BSI dropped to 1193 (-3.0%) a ...
Tuesday, 20 December 11
INDIA IMPORTS 66.41 PERCENT MORE COAL FROM INDONESIA LAST MONTH - SOURCES
COALspot.com: Indonesia, the world largest coal exporter, shipped 33.476* mln mt of coal in November, which is slightly higher than its Octobe ...
Monday, 19 December 11
KOPEX COMMITS ADDITIONAL ONE MILLION DOLLAR FOR PT TRANSCOAL MINERGY
COALspot.com - Mining contractor Kopex has agreed to extend a further US$1 million to finance the remainder of the expanded drill program at PT Tran ...
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- Riau Bara Harum - Indonesia
- TeaM Sual Corporation - Philippines
- Indian Energy Exchange, India
- Bhatia International Limited - India
- Commonwealth Bank - Australia
- Cigading International Bulk Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Ministry of Finance - Indonesia
- Ministry of Transport, Egypt
- Gujarat Sidhee Cement - India
- Economic Council, Georgia
- Aditya Birla Group - India
- Medco Energi Mining Internasional
- Semirara Mining and Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Chamber of Mines of South Africa
- Standard Chartered Bank - UAE
- Leighton Contractors Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- Anglo American - United Kingdom
- GVK Power & Infra Limited - India
- Renaissance Capital - South Africa
- Carbofer General Trading SA - India
- Krishnapatnam Port Company Ltd. - India
- Meralco Power Generation, Philippines
- Vedanta Resources Plc - India
- Ministry of Mines - Canada
- The University of Queensland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Generating Authority of Thailand
- Indika Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Independent Power Producers Association of India
- MS Steel International - UAE
- Asmin Koalindo Tuhup - Indonesia
- Mercator Lines Limited - India
- Heidelberg Cement - Germany
- Cement Manufacturers Association - India
- Xindia Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Energy Development Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Globalindo Alam Lestari - Indonesia
- Grasim Industreis Ltd - India
- Malabar Cements Ltd - India
- PowerSource Philippines DevCo
- Formosa Plastics Group - Taiwan
- Billiton Holdings Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Aboitiz Power Corporation - Philippines
- Central Electricity Authority - India
- Indonesian Coal Mining Association
- Kohat Cement Company Ltd. - Pakistan
- Intertek Mineral Services - Indonesia
- Siam City Cement PLC, Thailand
- Timah Investasi Mineral - Indoneisa
- Romanian Commodities Exchange
- San Jose City I Power Corp, Philippines
- Samtan Co., Ltd - South Korea
- India Bulls Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Latin American Coal - Colombia
- Maharashtra Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TNB Fuel Sdn Bhd - Malaysia
- Bayan Resources Tbk. - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Thiess Contractors Indonesia
- GMR Energy Limited - India
- Indogreen Group - Indonesia
- Trasteel International SA, Italy
- Bukit Baiduri Energy - Indonesia
- Georgia Ports Authority, United States
- Savvy Resources Ltd - HongKong
- Kideco Jaya Agung - Indonesia
- Global Business Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- SN Aboitiz Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Bangladesh Power Developement Board
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Kumho Petrochemical, South Korea
- European Bulk Services B.V. - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Bulk Trading Sa - Switzerland
- Banpu Public Company Limited - Thailand
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- Larsen & Toubro Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- The State Trading Corporation of India Ltd
- Simpson Spence & Young - Indonesia
- White Energy Company Limited
- Lanco Infratech Ltd - India
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- Siam City Cement - Thailand
- Bhoruka Overseas - Indonesia
- Goldman Sachs - Singapore
- Ambuja Cements Ltd - India
- Africa Commodities Group - South Africa
- Jaiprakash Power Ventures ltd
- Therma Luzon, Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- New Zealand Coal & Carbon
- Holcim Trading Pte Ltd - Singapore
- Posco Energy - South Korea
- Dalmia Cement Bharat India
- Manunggal Multi Energi - Indonesia
- Tata Chemicals Ltd - India
- Madhucon Powers Ltd - India
- Jindal Steel & Power Ltd - India
- Chettinad Cement Corporation Ltd - India
- Sojitz Corporation - Japan
- Neyveli Lignite Corporation Ltd, - India
- Australian Commodity Traders Exchange
- Coalindo Energy - Indonesia
- Sical Logistics Limited - India
- Wood Mackenzie - Singapore
- Tamil Nadu electricity Board
- SMG Consultants - Indonesia
- Energy Link Ltd, New Zealand
- Borneo Indobara - Indonesia
- Directorate Of Revenue Intelligence - India
- Petron Corporation, Philippines
- Interocean Group of Companies - India
- Orica Mining Services - Indonesia
- Orica Australia Pty. Ltd.
- Kobexindo Tractors - Indoneisa
- Videocon Industries ltd - India
- Sindya Power Generating Company Private Ltd
- South Luzon Thermal Energy Corporation
- Pipit Mutiara Jaya. PT, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Edison Trading Spa - Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The Treasury - Australian Government
- Star Paper Mills Limited - India
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- Singapore Mercantile Exchange
- PetroVietnam Power Coal Import and Supply Company
- ICICI Bank Limited - India
- Mercuria Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Rio Tinto Coal - Australia
- Thai Mozambique Logistica
- Central Java Power - Indonesia
- Wilmar Investment Holdings
- London Commodity Brokers - England
- OPG Power Generation Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Coastal Gujarat Power Limited - India
- Australian Coal Association
- VISA Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining Corp, Philippines
- Mjunction Services Limited - India
- Iligan Light & Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- CNBM International Corporation - China
- Marubeni Corporation - India
- Global Green Power PLC Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Mintek Dendrill Indonesia
- Sarangani Energy Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Attock Cement Pakistan Limited
- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Maheswari Brothers Coal Limited - India
- Eastern Coal Council - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Minerals Council of Australia
- Kaltim Prima Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bharathi Cement Corporation - India
- Vizag Seaport Private Limited - India
- IEA Clean Coal Centre - UK
- Parry Sugars Refinery, India
- Alfred C Toepfer International GmbH - Germany
- LBH Netherlands Bv - Netherlands
- SMC Global Power, Philippines
- Meenaskhi Energy Private Limited - India
- Karaikal Port Pvt Ltd - India
- PTC India Limited - India
- Antam Resourcindo - Indonesia
- IHS Mccloskey Coal Group - USA
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Barasentosa Lestari - Indonesia
- Makarim & Taira - Indonesia
- Baramulti Group, Indonesia
- Parliament of New Zealand
- Power Finance Corporation Ltd., India
- Essar Steel Hazira Ltd - India
- McConnell Dowell - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Planning Commission, India
- Kartika Selabumi Mining - Indonesia
- Indian Oil Corporation Limited
- ASAPP Information Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Merrill Lynch Commodities Europe
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