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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, 30 September 10
DRY BULK MARKET HEADS SOUTH ONCE MORE WITH MARKET SENTIMENT TAKING A CAUTIOUS APPROACH - HELLENIC SHIPPING
The dry bulk market didn’t manage to maintain the slightly upward momentum it had established during the first two session of the week, with t ...
Wednesday, 29 September 10
MOZAMBIQUE: COAL IN THREE MORE TETE DISTRICTS
All africa reported that, Coal deposits have been confirmed in the districts of Changara, Cahora Bassa and Magoe, in the western Mozambican province ...
Tuesday, 28 September 10
MMTC TO AWARD CONTRACT TO CEPL AND KNOWLEDGE TO SUPPLY 0.835 MILLION TONS OF IMPORTED COAL
COALspot.com: MMTC, India’s state owned trading company has opened three coal purchase tenders today.
According to our market sources, Coas ...
Monday, 27 September 10
DRY BULK: FREIGHT RATES CONTINUE TO FALL ON LOW ACTIVITY - HELLENIC SHIPPING
The dry bulk market didn’t manage to change its fortunes during the past week, with holidays across many Asian countries, predominantly China, ...
Saturday, 25 September 10
INDONESIA HAS EXPORTED 187.656 MILLION TONNES OF COAL IN EIGHT MONTHS
COALspot.com: Indonesia, the world largest coal exporter has exported 187.656 million tons of coal for the period January – August this ...
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- Siam City Cement - Thailand
- Grasim Industreis Ltd - India
- Kartika Selabumi Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- Oldendorff Carriers - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- Timah Investasi Mineral - Indoneisa
- Parliament of New Zealand
- Price Waterhouse Coopers - Russia
- SMC Global Power, Philippines
- Bangladesh Power Developement Board
- Ind-Barath Power Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Neyveli Lignite Corporation Ltd, - India
- Tata Chemicals Ltd - India
- Kaltim Prima Coal - Indonesia
- Petron Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Gujarat Sidhee Cement - India
- Sinarmas Energy and Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- London Commodity Brokers - England
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mjunction Services Limited - India
- Billiton Holdings Pty Ltd - Australia
- Latin American Coal - Colombia
- Planning Commission, India
- Commonwealth Bank - Australia
- Coastal Gujarat Power Limited - India
- Indian Energy Exchange, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Makarim & Taira - Indonesia
- Eastern Energy - Thailand
- Mercuria Energy - Indonesia
- Indian Oil Corporation Limited
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Deloitte Consulting - India
- Leighton Contractors Pty Ltd - Australia
- Central Java Power - Indonesia
- Wood Mackenzie - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Kobexindo Tractors - Indoneisa
- Edison Trading Spa - Italy
- Kumho Petrochemical, South Korea
- Bhushan Steel Limited - India
- Thai Mozambique Logistica
- Directorate General of MIneral and Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Romanian Commodities Exchange
- Energy Development Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Iligan Light & Power Inc, Philippines
- Borneo Indobara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Dalmia Cement Bharat India
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Indonesian Coal Mining Association
- Alfred C Toepfer International GmbH - Germany
- Ministry of Transport, Egypt
- Singapore Mercantile Exchange
- Barasentosa Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- GMR Energy Limited - India
- Bukit Makmur.PT - Indonesia
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- White Energy Company Limited
- Carbofer General Trading SA - India
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Bulk Trading Sa - Switzerland
- Star Paper Mills Limited - India
- SMG Consultants - Indonesia
- Power Finance Corporation Ltd., India
- Ceylon Electricity Board - Sri Lanka
- Metalloyd Limited - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Jindal Steel & Power Ltd - India
- Karaikal Port Pvt Ltd - India
- Electricity Generating Authority of Thailand
- TeaM Sual Corporation - Philippines
- CIMB Investment Bank - Malaysia
- ICICI Bank Limited - India
- Chamber of Mines of South Africa
- Chettinad Cement Corporation Ltd - India
- Orica Mining Services - Indonesia
- Wilmar Investment Holdings
- Orica Australia Pty. Ltd.
- Maheswari Brothers Coal Limited - India
- Africa Commodities Group - South Africa
- Global Coal Blending Company Limited - Australia
- Vedanta Resources Plc - India
- India Bulls Power Limited - India
- Rio Tinto Coal - Australia
- Miang Besar Coal Terminal - Indonesia
- Bhatia International Limited - India
- The Treasury - Australian Government
- Aditya Birla Group - India
- Globalindo Alam Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Xindia Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Medco Energi Mining Internasional
- Essar Steel Hazira Ltd - India
- Minerals Council of Australia
- PNOC Exploration Corporation - Philippines
- Independent Power Producers Association of India
- Australian Commodity Traders Exchange
- Malabar Cements Ltd - India
- Port Waratah Coal Services - Australia
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Anglo American - United Kingdom
- Vizag Seaport Private Limited - India
- Straits Asia Resources Limited - Singapore
- Aboitiz Power Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Kepco SPC Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Bayan Resources Tbk. - Indonesia
- MS Steel International - UAE
- Formosa Plastics Group - Taiwan
- Savvy Resources Ltd - HongKong
- Intertek Mineral Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Salva Resources Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Sarangani Energy Corporation, Philippines
- CNBM International Corporation - China
- IHS Mccloskey Coal Group - USA
- Sree Jayajothi Cements Limited - India
- GVK Power & Infra Limited - India
- Tamil Nadu electricity Board
- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- Banpu Public Company Limited - Thailand
- Indika Energy - Indonesia
- Economic Council, Georgia
- Coal and Oil Company - UAE
- Thiess Contractors Indonesia
- Goldman Sachs - Singapore
- Indogreen Group - Indonesia
- Antam Resourcindo - Indonesia
- Pendopo Energi Batubara - Indonesia
- Interocean Group of Companies - India
- Binh Thuan Hamico - Vietnam
- Central Electricity Authority - India
- Australian Coal Association
- VISA Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bhoruka Overseas - Indonesia
- PTC India Limited - India
- Standard Chartered Bank - UAE
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining Corp, Philippines
- Sojitz Corporation - Japan
- The State Trading Corporation of India Ltd
- GN Power Mariveles Coal Plant, Philippines
- Altura Mining Limited, Indonesia
- Global Green Power PLC Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- PowerSource Philippines DevCo
- McConnell Dowell - Australia
- ASAPP Information Group - India
- Ministry of Mines - Canada
- Samtan Co., Ltd - South Korea
- Bharathi Cement Corporation - India
- Eastern Coal Council - USA
- Marubeni Corporation - India
- Renaissance Capital - South Africa
- Ministry of Finance - Indonesia
- Gujarat Electricity Regulatory Commission - India
- The University of Queensland
- Rashtriya Ispat Nigam Limited - India
- Madhucon Powers Ltd - India
- OPG Power Generation Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Georgia Ports Authority, United States
- South Luzon Thermal Energy Corporation
- Electricity Authority, New Zealand
- Sindya Power Generating Company Private Ltd
- Parry Sugars Refinery, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercator Lines Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Mintek Dendrill Indonesia
- Cement Manufacturers Association - India
- LBH Netherlands Bv - Netherlands
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- Baramulti Group, Indonesia
- Meralco Power Generation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- Kohat Cement Company Ltd. - Pakistan
- Trasteel International SA, Italy
- Posco Energy - South Korea
- Riau Bara Harum - Indonesia
- Simpson Spence & Young - Indonesia
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining and Power Corporation, Philippines
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