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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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Saturday, 23 July 11
PANAMAX MARKET FACED A LIMITED ACTIVITY IN ALL BASINS
Handy
Atlantic softening across all segments with little fresh enquiry ex Bsea/Cont/USG and ECSA. Trips to Far east remain healthy. More cargoes ex ...
Friday, 22 July 11
MARUBENI ACQUIRING 42.86% SHARE OF YTL JAWA POWER HOLDINGS
COALspot.com - Japan’s Marubeni Corporation acquisition 42.86% stake in YTL Jawa Power Holdings BV, which owns a 35% equity interest in Indone ...
Thursday, 21 July 11
INDIA IMPORTS 36.033 MILLION TONS OF INDONESIAN COAL TILL JUNE
COALspot.com - Indonesia shipped 28.27 Million tons of coal in June 2011, a 2.3 percent lesser than May export of about 28.962 million tons, I ...
Thursday, 21 July 11
COAL PRICES ARE AT US$ 120 A TONNE
COALspot.com - Indonesian coal production in 2011 is expected to reach 360 million tons or 5.8 percent higher than government's forecasts. The incr ...
Thursday, 21 July 11
DRY BULK RATES EDGE FURTHER DOWN ON WEAK MARKET SENTIMENT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market fell once again on Wednesday marking the ninth straight day of losses. The industry’s benchmark, the Baltic Dry Index (BDI ...
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- Altura Mining Limited, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement PLC, Thailand
- Wilmar Investment Holdings
- Videocon Industries ltd - India
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- GMR Energy Limited - India
- Directorate Of Revenue Intelligence - India
- Globalindo Alam Lestari - Indonesia
- Thai Mozambique Logistica
- Makarim & Taira - Indonesia
- Kartika Selabumi Mining - Indonesia
- Global Business Power Corporation, Philippines
- Bhatia International Limited - India
- Goldman Sachs - Singapore
- Baramulti Group, Indonesia
- Cement Manufacturers Association - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Renaissance Capital - South Africa
- Sree Jayajothi Cements Limited - India
- Mintek Dendrill Indonesia
- CNBM International Corporation - China
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Dalmia Cement Bharat India
- Electricity Authority, New Zealand
- Leighton Contractors Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Planning Commission, India
- Grasim Industreis Ltd - India
- TeaM Sual Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Meralco Power Generation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Ministry of Mines - Canada
- PetroVietnam Power Coal Import and Supply Company
- Riau Bara Harum - Indonesia
- Orica Australia Pty. Ltd.
- Singapore Mercantile Exchange
- Bulk Trading Sa - Switzerland
- Edison Trading Spa - Italy
- Ambuja Cements Ltd - India
- Gujarat Sidhee Cement - India
- Standard Chartered Bank - UAE
- India Bulls Power Limited - India
- Vizag Seaport Private Limited - India
- Port Waratah Coal Services - Australia
- Kobexindo Tractors - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Vedanta Resources Plc - India
- Kaltim Prima Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Eastern Energy - Thailand
- Therma Luzon, Inc, Philippines
- Madhucon Powers Ltd - India
- Billiton Holdings Pty Ltd - Australia
- PowerSource Philippines DevCo
- Wood Mackenzie - Singapore
- Price Waterhouse Coopers - Russia
- Australian Commodity Traders Exchange
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- Bangladesh Power Developement Board
- Australian Coal Association
- Global Coal Blending Company Limited - Australia
- Heidelberg Cement - Germany
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Larsen & Toubro Limited - India
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining and Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- South Luzon Thermal Energy Corporation
- Manunggal Multi Energi - Indonesia
- Medco Energi Mining Internasional
- GVK Power & Infra Limited - India
- Simpson Spence & Young - Indonesia
- Bharathi Cement Corporation - India
- Mercator Lines Limited - India
- Commonwealth Bank - Australia
- Sojitz Corporation - Japan
- Samtan Co., Ltd - South Korea
- Central Electricity Authority - India
- The State Trading Corporation of India Ltd
- Toyota Tsusho Corporation, Japan
- Indo Tambangraya Megah - Indonesia
- Mjunction Services Limited - India
- Xindia Steels Limited - India
- Indika Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Essar Steel Hazira Ltd - India
- Jaiprakash Power Ventures ltd
- Kapuas Tunggal Persada - Indonesia
- Coastal Gujarat Power Limited - India
- Deloitte Consulting - India
- VISA Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Latin American Coal - Colombia
- Borneo Indobara - Indonesia
- Straits Asia Resources Limited - Singapore
- Kumho Petrochemical, South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Mineral Development Corp Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Karaikal Port Pvt Ltd - India
- London Commodity Brokers - England
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- Aboitiz Power Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Indonesian Coal Mining Association
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- Chamber of Mines of South Africa
- Banpu Public Company Limited - Thailand
- Trasteel International SA, Italy
- ICICI Bank Limited - India
- Sarangani Energy Corporation, Philippines
- Rio Tinto Coal - Australia
- Ind-Barath Power Infra Limited - India
- Indian Energy Exchange, India
- Thiess Contractors Indonesia
- Energy Development Corp, Philippines
- CIMB Investment Bank - Malaysia
- SN Aboitiz Power Inc, Philippines
- Minerals Council of Australia
- Marubeni Corporation - India
- PTC India Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sical Logistics Limited - India
- Binh Thuan Hamico - Vietnam
- Eastern Coal Council - USA
- Holcim Trading Pte Ltd - Singapore
- Coalindo Energy - Indonesia
- Semirara Mining Corp, Philippines
- Sakthi Sugars Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Indogreen Group - Indonesia
- Coal and Oil Company - UAE
- Uttam Galva Steels Limited - India
- Independent Power Producers Association of India
- Indian Oil Corporation Limited
- Energy Link Ltd, New Zealand
- Chettinad Cement Corporation Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Sindya Power Generating Company Private Ltd
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sinarmas Energy and Mining - Indonesia
- Oldendorff Carriers - Singapore
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Posco Energy - South Korea
- Mercuria Energy - Indonesia
- IEA Clean Coal Centre - UK
- Star Paper Mills Limited - India
- Parry Sugars Refinery, India
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- MS Steel International - UAE
- Meenaskhi Energy Private Limited - India
- The University of Queensland
- International Coal Ventures Pvt Ltd - India
- Orica Mining Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Malabar Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pendopo Energi Batubara - Indonesia
- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- McConnell Dowell - Australia
- Lanco Infratech Ltd - India
- Agrawal Coal Company - India
- Bayan Resources Tbk. - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Anglo American - United Kingdom
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- SMG Consultants - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- SMC Global Power, Philippines
- New Zealand Coal & Carbon
- Merrill Lynch Commodities Europe
- Economic Council, Georgia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- GN Power Mariveles Coal Plant, Philippines
- IHS Mccloskey Coal Group - USA
- Barasentosa Lestari - Indonesia
- White Energy Company Limited
- Ministry of Finance - Indonesia
- Ministry of Transport, Egypt
- Intertek Mineral Services - Indonesia
- Siam City Cement - Thailand
- Petron Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- Tata Chemicals Ltd - India
- Tamil Nadu electricity Board
- Vijayanagar Sugar Pvt Ltd - India
- Carbofer General Trading SA - India
- Kepco SPC Power Corporation, Philippines
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