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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, 17 November 11
DRY BULK MARKET INCHES FORWARD AND INTO HIGHER GROUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market edged higher yesterday, on the back of stronger demand for Capesize vessels and general improvement of sentiment on most of the ...
Thursday, 17 November 11
KOMIPO INVITES BIDS FOR 500K MT OF COAL
COALspot.com - Korea Midland Power Co. Ltd.(KOMIPO) is inviting bids for the supply of 500,000 Metric Tons of minimum 5700 kcal/kg coal of NAR bases ...
Thursday, 17 November 11
INDONESIAN GOVERNMENT PLANS TO ISSUE MORATORIUM ON COAL MINING LICENSE
COALspot.com - Energy and mineral resources ministry is plans to issue a moratorium on the issuance of coal mining licenses, after the anti-graft co ...
Wednesday, 16 November 11
KRISHNAPATNAM PORT BECOMES DEEPEST DRAFT PORT IN INDIA
COALspot.com - Krishnapatnam Port in its quest to be the best port in India has increased its draft to 17.5 meters, according to E-Mail statement fr ...
Wednesday, 16 November 11
CHINA'S INDONESIA COAL IMPORTS RISE IN OCTOBER
COALspot.com: Indonesia, the world largest coal exporter, shipped 31,162,688 MT of coal in October 2011.
China was a largest importer of Indonesi ...
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- Economic Council, Georgia
- Price Waterhouse Coopers - Russia
- Formosa Plastics Group - Taiwan
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Parliament of New Zealand
- Ind-Barath Power Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Bukit Makmur.PT - Indonesia
- Electricity Generating Authority of Thailand
- Sojitz Corporation - Japan
- GAC Shipping (India) Pvt Ltd
- Goldman Sachs - Singapore
- Attock Cement Pakistan Limited
- Straits Asia Resources Limited - Singapore
- Global Green Power PLC Corporation, Philippines
- Aditya Birla Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kumho Petrochemical, South Korea
- Malabar Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Petron Corporation, Philippines
- Planning Commission, India
- LBH Netherlands Bv - Netherlands
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- Riau Bara Harum - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Standard Chartered Bank - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Meralco Power Generation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- PowerSource Philippines DevCo
- CNBM International Corporation - China
- Bharathi Cement Corporation - India
- Global Coal Blending Company Limited - Australia
- Kobexindo Tractors - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Central Electricity Authority - India
- Asmin Koalindo Tuhup - Indonesia
- Interocean Group of Companies - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate Of Revenue Intelligence - India
- Energy Development Corp, Philippines
- Coal and Oil Company - UAE
- PTC India Limited - India
- India Bulls Power Limited - India
- Meenaskhi Energy Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- The University of Queensland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Java Power - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Ambuja Cements Ltd - India
- GMR Energy Limited - India
- Iligan Light & Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Indo Tambangraya Megah - Indonesia
- Manunggal Multi Energi - Indonesia
- Videocon Industries ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Timah Investasi Mineral - Indoneisa
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- Therma Luzon, Inc, Philippines
- Power Finance Corporation Ltd., India
- Wood Mackenzie - Singapore
- Holcim Trading Pte Ltd - Singapore
- Antam Resourcindo - Indonesia
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- Edison Trading Spa - Italy
- Toyota Tsusho Corporation, Japan
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- SMC Global Power, Philippines
- Gujarat Sidhee Cement - India
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Orica Australia Pty. Ltd.
- SMG Consultants - Indonesia
- Savvy Resources Ltd - HongKong
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- TeaM Sual Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Parry Sugars Refinery, India
- Thai Mozambique Logistica
- Renaissance Capital - South Africa
- Bhatia International Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Medco Energi Mining Internasional
- Jindal Steel & Power Ltd - India
- Binh Thuan Hamico - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Merrill Lynch Commodities Europe
- Global Business Power Corporation, Philippines
- Chamber of Mines of South Africa
- Uttam Galva Steels Limited - India
- Metalloyd Limited - United Kingdom
- Eastern Energy - Thailand
- Sindya Power Generating Company Private Ltd
- Makarim & Taira - Indonesia
- Heidelberg Cement - Germany
- Banpu Public Company Limited - Thailand
- Star Paper Mills Limited - India
- Indian Oil Corporation Limited
- Bulk Trading Sa - Switzerland
- GVK Power & Infra Limited - India
- Singapore Mercantile Exchange
- The Treasury - Australian Government
- Jaiprakash Power Ventures ltd
- Mintek Dendrill Indonesia
- Oldendorff Carriers - Singapore
- Sakthi Sugars Limited - India
- Grasim Industreis Ltd - India
- Altura Mining Limited, Indonesia
- Indian Energy Exchange, India
- TNB Fuel Sdn Bhd - Malaysia
- Mercuria Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Trasteel International SA, Italy
- Posco Energy - South Korea
- Bukit Baiduri Energy - Indonesia
- White Energy Company Limited
- OPG Power Generation Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Lanco Infratech Ltd - India
- Minerals Council of Australia
- Port Waratah Coal Services - Australia
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Alfred C Toepfer International GmbH - Germany
- Borneo Indobara - Indonesia
- Thiess Contractors Indonesia
- VISA Power Limited - India
- Indonesian Coal Mining Association
- Bhoruka Overseas - Indonesia
- Latin American Coal - Colombia
- IHS Mccloskey Coal Group - USA
- Eastern Coal Council - USA
- Romanian Commodities Exchange
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Barasentosa Lestari - Indonesia
- Indika Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- IEA Clean Coal Centre - UK
- SN Aboitiz Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Marubeni Corporation - India
- Semirara Mining Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Independent Power Producers Association of India
- Xindia Steels Limited - India
- Cement Manufacturers Association - India
- Globalindo Alam Lestari - Indonesia
- Electricity Authority, New Zealand
- San Jose City I Power Corp, Philippines
- Carbofer General Trading SA - India
- Mercator Lines Limited - India
- MS Steel International - UAE
- Siam City Cement PLC, Thailand
- Gujarat Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Transport, Egypt
- Essar Steel Hazira Ltd - India
- Sical Logistics Limited - India
- Agrawal Coal Company - India
- Ceylon Electricity Board - Sri Lanka
- Aboitiz Power Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Kalimantan Lumbung Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Dalmia Cement Bharat India
- CIMB Investment Bank - Malaysia
- Sree Jayajothi Cements Limited - India
- Coalindo Energy - Indonesia
- Australian Commodity Traders Exchange
- Australian Coal Association
- Semirara Mining and Power Corporation, Philippines
- Bangladesh Power Developement Board
- European Bulk Services B.V. - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- Bhushan Steel Limited - India
- Energy Link Ltd, New Zealand
- Vedanta Resources Plc - India
- Cigading International Bulk Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- Ministry of Mines - Canada
- Anglo American - United Kingdom
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- The State Trading Corporation of India Ltd
- Bayan Resources Tbk. - Indonesia
- London Commodity Brokers - England
- Kideco Jaya Agung - Indonesia
- Georgia Ports Authority, United States
- Kartika Selabumi Mining - Indonesia
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
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