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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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- Makarim & Taira - Indonesia
- Economic Council, Georgia
- Sree Jayajothi Cements Limited - India
- OPG Power Generation Pvt Ltd - India
- Australian Coal Association
- Kaltim Prima Coal - Indonesia
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Bhatia International Limited - India
- Anglo American - United Kingdom
- Energy Link Ltd, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- McConnell Dowell - Australia
- Directorate Of Revenue Intelligence - India
- Uttam Galva Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Rashtriya Ispat Nigam Limited - India
- Indonesian Coal Mining Association
- Karbindo Abesyapradhi - Indoneisa
- Attock Cement Pakistan Limited
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- Orica Australia Pty. Ltd.
- Agrawal Coal Company - India
- Jindal Steel & Power Ltd - India
- ASAPP Information Group - India
- CIMB Investment Bank - Malaysia
- Samtan Co., Ltd - South Korea
- Tata Chemicals Ltd - India
- Interocean Group of Companies - India
- Planning Commission, India
- South Luzon Thermal Energy Corporation
- Romanian Commodities Exchange
- Kumho Petrochemical, South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Timah Investasi Mineral - Indoneisa
- New Zealand Coal & Carbon
- Gujarat Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- Aboitiz Power Corporation - Philippines
- Borneo Indobara - Indonesia
- Sical Logistics Limited - India
- Formosa Plastics Group - Taiwan
- Maharashtra Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Jorong Barutama Greston.PT - Indonesia
- Renaissance Capital - South Africa
- Chamber of Mines of South Africa
- Banpu Public Company Limited - Thailand
- Neyveli Lignite Corporation Ltd, - India
- IEA Clean Coal Centre - UK
- Independent Power Producers Association of India
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- Energy Development Corp, Philippines
- San Jose City I Power Corp, Philippines
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Cigading International Bulk Terminal - Indonesia
- White Energy Company Limited
- Minerals Council of Australia
- Kalimantan Lumbung Energi - Indonesia
- Sindya Power Generating Company Private Ltd
- Star Paper Mills Limited - India
- Semirara Mining and Power Corporation, Philippines
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- The State Trading Corporation of India Ltd
- Petrochimia International Co. Ltd.- Taiwan
- PNOC Exploration Corporation - Philippines
- PTC India Limited - India
- The University of Queensland
- Vizag Seaport Private Limited - India
- ICICI Bank Limited - India
- Standard Chartered Bank - UAE
- Kapuas Tunggal Persada - Indonesia
- Ind-Barath Power Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Singapore Mercantile Exchange
- Price Waterhouse Coopers - Russia
- Binh Thuan Hamico - Vietnam
- Straits Asia Resources Limited - Singapore
- Parry Sugars Refinery, India
- Posco Energy - South Korea
- SN Aboitiz Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Mjunction Services Limited - India
- Iligan Light & Power Inc, Philippines
- SMC Global Power, Philippines
- Marubeni Corporation - India
- Tamil Nadu electricity Board
- International Coal Ventures Pvt Ltd - India
- Wilmar Investment Holdings
- Madhucon Powers Ltd - India
- Bukit Makmur.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Deloitte Consulting - India
- Global Green Power PLC Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Bhushan Steel Limited - India
- Georgia Ports Authority, United States
- Sinarmas Energy and Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Indogreen Group - Indonesia
- Merrill Lynch Commodities Europe
- Metalloyd Limited - United Kingdom
- Sarangani Energy Corporation, Philippines
- Latin American Coal - Colombia
- Sakthi Sugars Limited - India
- Ministry of Mines - Canada
- Meralco Power Generation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Ceylon Electricity Board - Sri Lanka
- PowerSource Philippines DevCo
- Ambuja Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Mercator Lines Limited - India
- Xindia Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- Indika Energy - Indonesia
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- Central Electricity Authority - India
- Thiess Contractors Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Karaikal Port Pvt Ltd - India
- Rio Tinto Coal - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Parliament of New Zealand
- Bulk Trading Sa - Switzerland
- Riau Bara Harum - Indonesia
- Salva Resources Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Siam City Cement - Thailand
- Intertek Mineral Services - Indonesia
- Petron Corporation, Philippines
- Coal and Oil Company - UAE
- GVK Power & Infra Limited - India
- Coastal Gujarat Power Limited - India
- Toyota Tsusho Corporation, Japan
- Ministry of Transport, Egypt
- MS Steel International - UAE
- Bangladesh Power Developement Board
- Oldendorff Carriers - Singapore
- LBH Netherlands Bv - Netherlands
- Indian Oil Corporation Limited
- Pendopo Energi Batubara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Essar Steel Hazira Ltd - India
- IHS Mccloskey Coal Group - USA
- Jaiprakash Power Ventures ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Carbofer General Trading SA - India
- Bhoruka Overseas - Indonesia
- Chettinad Cement Corporation Ltd - India
- London Commodity Brokers - England
- Global Coal Blending Company Limited - Australia
- Goldman Sachs - Singapore
- AsiaOL BioFuels Corp., Philippines
- Sojitz Corporation - Japan
- Lanco Infratech Ltd - India
- European Bulk Services B.V. - Netherlands
- Larsen & Toubro Limited - India
- Manunggal Multi Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Thai Mozambique Logistica
- Wood Mackenzie - Singapore
- CNBM International Corporation - China
- Mintek Dendrill Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Eastern Energy - Thailand
- Siam City Cement PLC, Thailand
- Therma Luzon, Inc, Philippines
- Port Waratah Coal Services - Australia
- Coalindo Energy - Indonesia
- Central Java Power - Indonesia
- Simpson Spence & Young - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMG Consultants - Indonesia
- Medco Energi Mining Internasional
- Orica Mining Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The Treasury - Australian Government
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- GMR Energy Limited - India
- Heidelberg Cement - Germany
- GAC Shipping (India) Pvt Ltd
- Aditya Birla Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- Videocon Industries ltd - India
- Malabar Cements Ltd - India
- Antam Resourcindo - Indonesia
- Semirara Mining Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Leighton Contractors Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- Baramulti Group, Indonesia
- Australian Commodity Traders Exchange
- Cement Manufacturers Association - India
- Africa Commodities Group - South Africa
- Eastern Coal Council - USA
- Electricity Authority, New Zealand
- Kideco Jaya Agung - Indonesia
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