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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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- AsiaOL BioFuels Corp., Philippines
- Indika Energy - Indonesia
- Heidelberg Cement - Germany
- The University of Queensland
- Planning Commission, India
- Thai Mozambique Logistica
- Kepco SPC Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Ministry of Finance - Indonesia
- Uttam Galva Steels Limited - India
- Posco Energy - South Korea
- Australian Commodity Traders Exchange
- Bukit Baiduri Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Vizag Seaport Private Limited - India
- India Bulls Power Limited - India
- Simpson Spence & Young - Indonesia
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- Energy Development Corp, Philippines
- Wilmar Investment Holdings
- ASAPP Information Group - India
- GMR Energy Limited - India
- PNOC Exploration Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Medco Energi Mining Internasional
- Marubeni Corporation - India
- Siam City Cement PLC, Thailand
- Grasim Industreis Ltd - India
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Aditya Birla Group - India
- Ceylon Electricity Board - Sri Lanka
- South Luzon Thermal Energy Corporation
- Kideco Jaya Agung - Indonesia
- Tamil Nadu electricity Board
- Bhushan Steel Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Globalindo Alam Lestari - Indonesia
- Malabar Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Energy Exchange, India
- Mercator Lines Limited - India
- Orica Mining Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Ind-Barath Power Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Larsen & Toubro Limited - India
- Trasteel International SA, Italy
- Dalmia Cement Bharat India
- Mjunction Services Limited - India
- MS Steel International - UAE
- Xindia Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Eastern Coal Council - USA
- Rio Tinto Coal - Australia
- Metalloyd Limited - United Kingdom
- Eastern Energy - Thailand
- Energy Link Ltd, New Zealand
- Ministry of Mines - Canada
- Gujarat Sidhee Cement - India
- Georgia Ports Authority, United States
- Africa Commodities Group - South Africa
- VISA Power Limited - India
- Central Electricity Authority - India
- Wood Mackenzie - Singapore
- Barasentosa Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Binh Thuan Hamico - Vietnam
- Economic Council, Georgia
- Indo Tambangraya Megah - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Jaiprakash Power Ventures ltd
- Altura Mining Limited, Indonesia
- Kumho Petrochemical, South Korea
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement - Thailand
- Jindal Steel & Power Ltd - India
- Romanian Commodities Exchange
- Power Finance Corporation Ltd., India
- Global Coal Blending Company Limited - Australia
- CIMB Investment Bank - Malaysia
- Therma Luzon, Inc, Philippines
- Orica Australia Pty. Ltd.
- Lanco Infratech Ltd - India
- CNBM International Corporation - China
- Videocon Industries ltd - India
- The State Trading Corporation of India Ltd
- Maheswari Brothers Coal Limited - India
- New Zealand Coal & Carbon
- Salva Resources Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Makarim & Taira - Indonesia
- McConnell Dowell - Australia
- Carbofer General Trading SA - India
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Essar Steel Hazira Ltd - India
- PowerSource Philippines DevCo
- TNB Fuel Sdn Bhd - Malaysia
- SMC Global Power, Philippines
- Merrill Lynch Commodities Europe
- Vijayanagar Sugar Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- San Jose City I Power Corp, Philippines
- Deloitte Consulting - India
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
- Chamber of Mines of South Africa
- Edison Trading Spa - Italy
- Bharathi Cement Corporation - India
- Samtan Co., Ltd - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Mercuria Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Coalindo Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Ambuja Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- LBH Netherlands Bv - Netherlands
- Oldendorff Carriers - Singapore
- Renaissance Capital - South Africa
- OPG Power Generation Pvt Ltd - India
- London Commodity Brokers - England
- Standard Chartered Bank - UAE
- The Treasury - Australian Government
- Vedanta Resources Plc - India
- Coal and Oil Company - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Savvy Resources Ltd - HongKong
- White Energy Company Limited
- Bulk Trading Sa - Switzerland
- Directorate General of MIneral and Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Central Java Power - Indonesia
- Sindya Power Generating Company Private Ltd
- Leighton Contractors Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Anglo American - United Kingdom
- SMG Consultants - Indonesia
- Australian Coal Association
- Latin American Coal - Colombia
- ICICI Bank Limited - India
- Manunggal Multi Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhatia International Limited - India
- Meralco Power Generation, Philippines
- Independent Power Producers Association of India
- Star Paper Mills Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karaikal Port Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Port Waratah Coal Services - Australia
- Goldman Sachs - Singapore
- Sinarmas Energy and Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Pendopo Energi Batubara - Indonesia
- Parliament of New Zealand
- Semirara Mining Corp, Philippines
- Global Business Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Thiess Contractors Indonesia
- Borneo Indobara - Indonesia
- Indonesian Coal Mining Association
- Riau Bara Harum - Indonesia
- Singapore Mercantile Exchange
- Sical Logistics Limited - India
- TeaM Sual Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Interocean Group of Companies - India
- Aboitiz Power Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Kobexindo Tractors - Indoneisa
- Price Waterhouse Coopers - Russia
- Bayan Resources Tbk. - Indonesia
- Sakthi Sugars Limited - India
- SN Aboitiz Power Inc, Philippines
- Baramulti Group, Indonesia
- Commonwealth Bank - Australia
- IEA Clean Coal Centre - UK
- Bank of Tokyo Mitsubishi UFJ Ltd
- PTC India Limited - India
- Attock Cement Pakistan Limited
- Ministry of Transport, Egypt
- Straits Asia Resources Limited - Singapore
- Electricity Generating Authority of Thailand
- Electricity Authority, New Zealand
- European Bulk Services B.V. - Netherlands
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Formosa Plastics Group - Taiwan
- Indian Oil Corporation Limited
- Kapuas Tunggal Persada - Indonesia
- Parry Sugars Refinery, India
- Minerals Council of Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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