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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, 15 December 11
DRY BULK RATES TO REMAIN AT CURRENT LEVELS FOR THE MOST PART IN THE COMING MONTHS SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest research note, BIMCO said that the Capesize Time Charter Average will remain at USD 20,000-30,000 per day but the tonnage oversupply w ...
Wednesday, 14 December 11
MINER TOBA BARA SEJAHTRA PLANS IPO IN 1ST HALF OF 2012 - THE JAKARTA GLOBE
The Jakarta Globe reported that, Coal miner Toba Bara Sejahtra is aiming high next year, hoping to capitalize on renewed bullish sentiment in the lo ...
Wednesday, 14 December 11
TIMAH PLANS TO BOOST ITS COAL PRODUCTION TO TWO MILLION TONS PER ANNUM - SOURCES
COALspot.com - Timah plans to boost its coal production to two million tons per annum. The company also expects to acquire coal concession with mini ...
Wednesday, 14 December 11
BORNEO RESOURCE INVESTMENTS LTD. FINALIZES ACQUISITION OF INTEGRA PRIMA
COALspot.com - Borneo Resource Investments Ltd., announced that it has finalized the acquisition of an additional 1,300 hectare coal mining concessi ...
Tuesday, 13 December 11
BERAU COAL SCOUTS US$1.61 BIO SALES - INSIDER STORIES
Insider Stories reported that, coal mining company PT Berau Coal Energy Tbk (BRAU), that is 85% owned by London-listed company Bumi Plc, estimates a ...
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- Planning Commission, India
- Cement Manufacturers Association - India
- Dalmia Cement Bharat India
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- Indian Oil Corporation Limited
- Gujarat Sidhee Cement - India
- AsiaOL BioFuels Corp., Philippines
- Xindia Steels Limited - India
- Bharathi Cement Corporation - India
- Ministry of Finance - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Economic Council, Georgia
- Sarangani Energy Corporation, Philippines
- PowerSource Philippines DevCo
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- Merrill Lynch Commodities Europe
- Manunggal Multi Energi - Indonesia
- Romanian Commodities Exchange
- Georgia Ports Authority, United States
- Pipit Mutiara Jaya. PT, Indonesia
- Price Waterhouse Coopers - Russia
- Thiess Contractors Indonesia
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
- GMR Energy Limited - India
- IEA Clean Coal Centre - UK
- Kalimantan Lumbung Energi - Indonesia
- The Treasury - Australian Government
- Kideco Jaya Agung - Indonesia
- European Bulk Services B.V. - Netherlands
- PNOC Exploration Corporation - Philippines
- Latin American Coal - Colombia
- Eastern Coal Council - USA
- Siam City Cement - Thailand
- Ministry of Mines - Canada
- South Luzon Thermal Energy Corporation
- Chamber of Mines of South Africa
- Ambuja Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Attock Cement Pakistan Limited
- Coastal Gujarat Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Tata Chemicals Ltd - India
- Maheswari Brothers Coal Limited - India
- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- TeaM Sual Corporation - Philippines
- Baramulti Group, Indonesia
- Commonwealth Bank - Australia
- Aboitiz Power Corporation - Philippines
- White Energy Company Limited
- Goldman Sachs - Singapore
- Binh Thuan Hamico - Vietnam
- Ministry of Transport, Egypt
- Directorate Of Revenue Intelligence - India
- Edison Trading Spa - Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Commodity Traders Exchange
- Jindal Steel & Power Ltd - India
- Orica Australia Pty. Ltd.
- Oldendorff Carriers - Singapore
- Posco Energy - South Korea
- Essar Steel Hazira Ltd - India
- Trasteel International SA, Italy
- Metalloyd Limited - United Kingdom
- SMC Global Power, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Petron Corporation, Philippines
- Port Waratah Coal Services - Australia
- London Commodity Brokers - England
- Energy Development Corp, Philippines
- Thai Mozambique Logistica
- Pendopo Energi Batubara - Indonesia
- Coalindo Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Central Java Power - Indonesia
- Bhatia International Limited - India
- Sical Logistics Limited - India
- Billiton Holdings Pty Ltd - Australia
- VISA Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Indogreen Group - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Coal and Oil Company - UAE
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Bangladesh Power Developement Board
- Independent Power Producers Association of India
- Salva Resources Pvt Ltd - India
- Marubeni Corporation - India
- Mercator Lines Limited - India
- Lanco Infratech Ltd - India
- Intertek Mineral Services - Indonesia
- Grasim Industreis Ltd - India
- Iligan Light & Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Formosa Plastics Group - Taiwan
- Rio Tinto Coal - Australia
- Riau Bara Harum - Indonesia
- Mercuria Energy - Indonesia
- Star Paper Mills Limited - India
- PTC India Limited - India
- Gujarat Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Interocean Group of Companies - India
- Malabar Cements Ltd - India
- Orica Mining Services - Indonesia
- Savvy Resources Ltd - HongKong
- Indonesian Coal Mining Association
- SMG Consultants - Indonesia
- Bhoruka Overseas - Indonesia
- Energy Link Ltd, New Zealand
- Minerals Council of Australia
- International Coal Ventures Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Holcim Trading Pte Ltd - Singapore
- Bayan Resources Tbk. - Indonesia
- Semirara Mining Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Global Business Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Medco Energi Mining Internasional
- Jaiprakash Power Ventures ltd
- McConnell Dowell - Australia
- Uttam Galva Steels Limited - India
- Videocon Industries ltd - India
- Makarim & Taira - Indonesia
- Wood Mackenzie - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Renaissance Capital - South Africa
- Kumho Petrochemical, South Korea
- San Jose City I Power Corp, Philippines
- Singapore Mercantile Exchange
- Deloitte Consulting - India
- Carbofer General Trading SA - India
- Straits Asia Resources Limited - Singapore
- Kartika Selabumi Mining - Indonesia
- Heidelberg Cement - Germany
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- Madhucon Powers Ltd - India
- ICICI Bank Limited - India
- India Bulls Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sojitz Corporation - Japan
- Electricity Authority, New Zealand
- MS Steel International - UAE
- Central Electricity Authority - India
- Borneo Indobara - Indonesia
- Samtan Co., Ltd - South Korea
- Parry Sugars Refinery, India
- Bahari Cakrawala Sebuku - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kaltim Prima Coal - Indonesia
- Mintek Dendrill Indonesia
- Chettinad Cement Corporation Ltd - India
- New Zealand Coal & Carbon
- Global Coal Blending Company Limited - Australia
- Toyota Tsusho Corporation, Japan
- Tamil Nadu electricity Board
- Anglo American - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Indian Energy Exchange, India
- Power Finance Corporation Ltd., India
- Directorate General of MIneral and Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Larsen & Toubro Limited - India
- Sree Jayajothi Cements Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cigading International Bulk Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Vedanta Resources Plc - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- Sakthi Sugars Limited - India
- Vizag Seaport Private Limited - India
- LBH Netherlands Bv - Netherlands
- Bukit Baiduri Energy - Indonesia
- Eastern Energy - Thailand
- Standard Chartered Bank - UAE
- Antam Resourcindo - Indonesia
- The State Trading Corporation of India Ltd
- Indika Energy - Indonesia
- The University of Queensland
- Agrawal Coal Company - India
- Barasentosa Lestari - Indonesia
- Mjunction Services Limited - India
- Wilmar Investment Holdings
- SN Aboitiz Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Meralco Power Generation, Philippines
- Siam City Cement PLC, Thailand
- ASAPP Information Group - India
- Australian Coal Association
- Aditya Birla Group - India
- Globalindo Alam Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Parliament of New Zealand
- Leighton Contractors Pty Ltd - Australia
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