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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, 08 December 11
INDIA MAY SEE 41% ANNUAL GROWTH OF ITS COAL DEMAND DURING THE NEXT 5 YEARS - ICAP SHIPPING
India’s Ministry of Coal expects that India’s coal demand may face an annual 41% rise during the next 5 years, while its coal deficit is ...
Thursday, 08 December 11
HAREDA KRIDA GETS CONTRACT FROM BAYAN - INSIDER STORIES
Insider Stories reported that, coal miner PT Bayan Resources Tbk (BYAN), through its subsidiary dubbed PT Gunungbayan Pratamacoal (GPB), has signed ...
Thursday, 08 December 11
CAPESIZES LIFT DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Capesize vessels yesterday helped lift the dry bulk market which had been falling since the start of the week on lower cargo demand. As a result the ...
Wednesday, 07 December 11
ABM INVESTAMA EYES RP6.3 TRIO REVENUE - INSIDER STORIES
Insider Stories reported that, an energy integrated company PT ABM Investama Tbk is eyeing a 1.5 folds increase in revenue this year from Rp4. ...
Tuesday, 06 December 11
DRY BULK MARKET ENDS RALLY, STARTS WEEK WITH FALL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
After a series of increases which saw the dry bulk market’s benchmark, the Baltic Dry Index (BDI) increasing close to 1,900 points and rates o ...
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- Merrill Lynch Commodities Europe
- Altura Mining Limited, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Interocean Group of Companies - India
- Wood Mackenzie - Singapore
- Wilmar Investment Holdings
- Global Business Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Agrawal Coal Company - India
- Directorate Of Revenue Intelligence - India
- Bhatia International Limited - India
- European Bulk Services B.V. - Netherlands
- Sakthi Sugars Limited - India
- Savvy Resources Ltd - HongKong
- Posco Energy - South Korea
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- Sarangani Energy Corporation, Philippines
- Lanco Infratech Ltd - India
- LBH Netherlands Bv - Netherlands
- White Energy Company Limited
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
- CIMB Investment Bank - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indogreen Group - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- ASAPP Information Group - India
- Tata Chemicals Ltd - India
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- MS Steel International - UAE
- Global Green Power PLC Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Binh Thuan Hamico - Vietnam
- Salva Resources Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Power Finance Corporation Ltd., India
- The University of Queensland
- TeaM Sual Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Deloitte Consulting - India
- Central Java Power - Indonesia
- Rashtriya Ispat Nigam Limited - India
- SN Aboitiz Power Inc, Philippines
- ICICI Bank Limited - India
- Essar Steel Hazira Ltd - India
- Attock Cement Pakistan Limited
- Orica Australia Pty. Ltd.
- South Luzon Thermal Energy Corporation
- GAC Shipping (India) Pvt Ltd
- Thiess Contractors Indonesia
- Commonwealth Bank - Australia
- PTC India Limited - India
- Gujarat Sidhee Cement - India
- Riau Bara Harum - Indonesia
- Semirara Mining Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Economic Council, Georgia
- Alfred C Toepfer International GmbH - Germany
- Kaltim Prima Coal - Indonesia
- GMR Energy Limited - India
- Bharathi Cement Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Orica Mining Services - Indonesia
- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Energy Development Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dalmia Cement Bharat India
- Neyveli Lignite Corporation Ltd, - India
- Ind-Barath Power Infra Limited - India
- Minerals Council of Australia
- Mercuria Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Sojitz Corporation - Japan
- Jaiprakash Power Ventures ltd
- Mintek Dendrill Indonesia
- Banpu Public Company Limited - Thailand
- Thai Mozambique Logistica
- Global Coal Blending Company Limited - Australia
- Latin American Coal - Colombia
- Independent Power Producers Association of India
- SMC Global Power, Philippines
- The State Trading Corporation of India Ltd
- GVK Power & Infra Limited - India
- Bhoruka Overseas - Indonesia
- CNBM International Corporation - China
- Ministry of Transport, Egypt
- Kartika Selabumi Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Cement Manufacturers Association - India
- Rio Tinto Coal - Australia
- New Zealand Coal & Carbon
- Eastern Coal Council - USA
- Uttam Galva Steels Limited - India
- Australian Coal Association
- Marubeni Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- London Commodity Brokers - England
- Port Waratah Coal Services - Australia
- PNOC Exploration Corporation - Philippines
- Edison Trading Spa - Italy
- Makarim & Taira - Indonesia
- Malabar Cements Ltd - India
- Siam City Cement - Thailand
- Chamber of Mines of South Africa
- Aditya Birla Group - India
- Formosa Plastics Group - Taiwan
- Africa Commodities Group - South Africa
- Antam Resourcindo - Indonesia
- Indonesian Coal Mining Association
- Bulk Trading Sa - Switzerland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petrochimia International Co. Ltd.- Taiwan
- Meralco Power Generation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Meenaskhi Energy Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Baramulti Group, Indonesia
- Therma Luzon, Inc, Philippines
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- Videocon Industries ltd - India
- Romanian Commodities Exchange
- Toyota Tsusho Corporation, Japan
- Oldendorff Carriers - Singapore
- Parry Sugars Refinery, India
- Kobexindo Tractors - Indoneisa
- Petron Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Ministry of Mines - Canada
- Goldman Sachs - Singapore
- Star Paper Mills Limited - India
- Electricity Authority, New Zealand
- Kideco Jaya Agung - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- International Coal Ventures Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Metalloyd Limited - United Kingdom
- VISA Power Limited - India
- Singapore Mercantile Exchange
- Asmin Koalindo Tuhup - Indonesia
- Vizag Seaport Private Limited - India
- Ambuja Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Carbofer General Trading SA - India
- Sinarmas Energy and Mining - Indonesia
- Planning Commission, India
- PowerSource Philippines DevCo
- Iligan Light & Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Parliament of New Zealand
- Grasim Industreis Ltd - India
- Samtan Co., Ltd - South Korea
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Vedanta Resources Plc - India
- The Treasury - Australian Government
- Electricity Generating Authority of Thailand
- Bhushan Steel Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Tamil Nadu electricity Board
- Madhucon Powers Ltd - India
- Siam City Cement PLC, Thailand
- Bayan Resources Tbk. - Indonesia
- Mjunction Services Limited - India
- Trasteel International SA, Italy
- Kumho Petrochemical, South Korea
- Xindia Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Indian Energy Exchange, India
- Intertek Mineral Services - Indonesia
- Straits Asia Resources Limited - Singapore
- SMG Consultants - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Anglo American - United Kingdom
- Sindya Power Generating Company Private Ltd
- Central Electricity Authority - India
- Bangladesh Power Developement Board
- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Mercator Lines Limited - India
- Kapuas Tunggal Persada - Indonesia
- Indika Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Borneo Indobara - Indonesia
- Price Waterhouse Coopers - Russia
- McConnell Dowell - Australia
- Directorate General of MIneral and Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- San Jose City I Power Corp, Philippines
- Energy Link Ltd, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- Sree Jayajothi Cements Limited - India
- Barasentosa Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Heidelberg Cement - Germany
- Globalindo Alam Lestari - Indonesia
- Renaissance Capital - South Africa
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