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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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Tuesday, 08 November 11
COAL MINER ABM INVESTAMA PLANS $290M PUBLIC OFFERING - JG
The Jakarta Globe reported that, ABM Investama, an Indonesian coal miner controlled by the Hamami family, plans to raise as much as Rp 2.6 trillion ...
Monday, 07 November 11
CHINA'S COAL IMPORTS STEAM AHEAD
Chinese seaborne coal imports have grown greatly in recent years, up from 39.2mt in 2008 to 167.7mt in 2010, with the result that China became a net ...
Saturday, 05 November 11
DEMAND SLUMP THREATENS MORE PAIN FOR BULK VESSELS - VISTAAR
COALspot.com - The market continued to fall with BDI dropping below 2,000 points by around 10 pct and closing at 1817 points. The cape index also co ...
Saturday, 05 November 11
BERAU STARTS TO EXPLORE BINUNGAN SITE - INSIDER STORIES
Insider Stories reported that, coal miner PT Berau Coal, a 90% owned subsidiary of PT Berau Coal Energy Tbk (BRAU), is busy to hold exploration in B ...
Friday, 04 November 11
INDIAN IRON ORE MARKET REMAINS DEAD - FEARNLEYS
Handy
The Atlantic market kept its strong position from last week. Even with fewer fixtures reported. Fronthauls still around 25k, wit ...
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- Karbindo Abesyapradhi - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Coal and Oil Company - UAE
- Latin American Coal - Colombia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indogreen Group - Indonesia
- Makarim & Taira - Indonesia
- Deloitte Consulting - India
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indika Energy - Indonesia
- Ministry of Finance - Indonesia
- India Bulls Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Tamil Nadu electricity Board
- Riau Bara Harum - Indonesia
- Gujarat Sidhee Cement - India
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Leighton Contractors Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- Economic Council, Georgia
- Directorate General of MIneral and Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Xindia Steels Limited - India
- Siam City Cement PLC, Thailand
- Bangladesh Power Developement Board
- Bayan Resources Tbk. - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Coal Council - USA
- London Commodity Brokers - England
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- Petron Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Sree Jayajothi Cements Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Aditya Birla Group - India
- Sinarmas Energy and Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Mercuria Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Australian Coal Association
- Power Finance Corporation Ltd., India
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Anglo American - United Kingdom
- Standard Chartered Bank - UAE
- Indian Energy Exchange, India
- Independent Power Producers Association of India
- The University of Queensland
- Energy Link Ltd, New Zealand
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- SMG Consultants - Indonesia
- Jaiprakash Power Ventures ltd
- Romanian Commodities Exchange
- Cigading International Bulk Terminal - Indonesia
- Chamber of Mines of South Africa
- Jindal Steel & Power Ltd - India
- Mintek Dendrill Indonesia
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Dalmia Cement Bharat India
- Barasentosa Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
- Indonesian Coal Mining Association
- Semirara Mining Corp, Philippines
- Global Business Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- The Treasury - Australian Government
- Pendopo Energi Batubara - Indonesia
- Formosa Plastics Group - Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Carbofer General Trading SA - India
- Semirara Mining and Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- AsiaOL BioFuels Corp., Philippines
- Timah Investasi Mineral - Indoneisa
- ASAPP Information Group - India
- Aboitiz Power Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Tata Chemicals Ltd - India
- Georgia Ports Authority, United States
- Madhucon Powers Ltd - India
- Ambuja Cements Ltd - India
- Bhushan Steel Limited - India
- Straits Asia Resources Limited - Singapore
- Indian Oil Corporation Limited
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Baramulti Group, Indonesia
- International Coal Ventures Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Bharathi Cement Corporation - India
- VISA Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Global Coal Blending Company Limited - Australia
- PetroVietnam Power Coal Import and Supply Company
- Posco Energy - South Korea
- Chettinad Cement Corporation Ltd - India
- TeaM Sual Corporation - Philippines
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- Planning Commission, India
- Meralco Power Generation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Attock Cement Pakistan Limited
- Coastal Gujarat Power Limited - India
- Intertek Mineral Services - Indonesia
- Bhoruka Overseas - Indonesia
- Bukit Makmur.PT - Indonesia
- ICICI Bank Limited - India
- Coalindo Energy - Indonesia
- White Energy Company Limited
- Merrill Lynch Commodities Europe
- Thai Mozambique Logistica
- Medco Energi Mining Internasional
- Eastern Energy - Thailand
- Sical Logistics Limited - India
- Australian Commodity Traders Exchange
- Orica Mining Services - Indonesia
- PTC India Limited - India
- Africa Commodities Group - South Africa
- Ministry of Mines - Canada
- Samtan Co., Ltd - South Korea
- Ministry of Transport, Egypt
- CNBM International Corporation - China
- Agrawal Coal Company - India
- Global Green Power PLC Corporation, Philippines
- Wilmar Investment Holdings
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- Renaissance Capital - South Africa
- Thiess Contractors Indonesia
- Minerals Council of Australia
- Edison Trading Spa - Italy
- Alfred C Toepfer International GmbH - Germany
- Malabar Cements Ltd - India
- Marubeni Corporation - India
- Kumho Petrochemical, South Korea
- Heidelberg Cement - Germany
- LBH Netherlands Bv - Netherlands
- PowerSource Philippines DevCo
- Kartika Selabumi Mining - Indonesia
- Vedanta Resources Plc - India
- Kapuas Tunggal Persada - Indonesia
- Meenaskhi Energy Private Limited - India
- Parliament of New Zealand
- PNOC Exploration Corporation - Philippines
- Grasim Industreis Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Australia Pty. Ltd.
- Bukit Baiduri Energy - Indonesia
- Central Java Power - Indonesia
- Trasteel International SA, Italy
- Mercator Lines Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhatia International Limited - India
- Binh Thuan Hamico - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mjunction Services Limited - India
- Sojitz Corporation - Japan
- San Jose City I Power Corp, Philippines
- Metalloyd Limited - United Kingdom
- GVK Power & Infra Limited - India
- Sarangani Energy Corporation, Philippines
- Star Paper Mills Limited - India
- OPG Power Generation Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- Kobexindo Tractors - Indoneisa
- Singapore Mercantile Exchange
- Therma Luzon, Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Larsen & Toubro Limited - India
- Toyota Tsusho Corporation, Japan
- Lanco Infratech Ltd - India
- Cement Manufacturers Association - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Borneo Indobara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kaltim Prima Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Electricity Authority, New Zealand
- Energy Development Corp, Philippines
- Interocean Group of Companies - India
- Parry Sugars Refinery, India
- GMR Energy Limited - India
- Neyveli Lignite Corporation Ltd, - India
- McConnell Dowell - Australia
- Altura Mining Limited, Indonesia
- Siam City Cement - Thailand
- European Bulk Services B.V. - Netherlands
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