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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, 08 May 10
THE FUTURES FOR THREE YEARS (2010-2012) WAS AT AROUND PANAMAX / $ 21500 & SUPRAMAX / $ 18500 PER DAY - VISTAAR SHIPPING
COALspot.com: The BDI continued to go up and was up by 7.57 pct even though the stock markets was severely affected with worries on Greek debt crisi ...
Saturday, 08 May 10
MAHAGENCO TO IMPORT 3.35 MILLION TON OF COAL
COALspot.com: Indian utility Maharashtra State Power Generation Co. Ltd. is in market for 3.35 million tones of imported coal. The purchase of coal ...
Saturday, 08 May 10
NAPOCOR BUYS 122,000 TONS COAL - ABC CBN NEWS
ABC - CBN News reported that, State-run National Power Corp. (Napocor) said on Thursday it awarded 2 contracts for the supply of a total 122,000 ton ...
Saturday, 08 May 10
RICHARDS BAY COAL SHIPMENTS FALL TO AN 11-MONTH LOW - BLOOMBERG
Bloomberg reported that, Coal shipments from Richards Bay Coal Terminal, Africa’s biggest export facility for the fuel, fell to an 11-month lo ...
Tuesday, 04 May 10
APRIL 2010 COAL PRICE REFERENCE WAS US$ 86.58/T FOB VESSEL
COALspot.com: The directorate general of mineral, coal and geothermal of Indonesia has publishing a monthly coal price reference (HBA) to be used by ...
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- Bhushan Steel Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement PLC, Thailand
- Iligan Light & Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Energy Development Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Essar Steel Hazira Ltd - India
- Mintek Dendrill Indonesia
- Singapore Mercantile Exchange
- Kaltim Prima Coal - Indonesia
- Port Waratah Coal Services - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Goldman Sachs - Singapore
- OPG Power Generation Pvt Ltd - India
- Bangladesh Power Developement Board
- Intertek Mineral Services - Indonesia
- Indika Energy - Indonesia
- Sakthi Sugars Limited - India
- Tamil Nadu electricity Board
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- Jindal Steel & Power Ltd - India
- VISA Power Limited - India
- Energy Link Ltd, New Zealand
- Bhoruka Overseas - Indonesia
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- Karaikal Port Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- Planning Commission, India
- PNOC Exploration Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Mercator Lines Limited - India
- Chamber of Mines of South Africa
- Agrawal Coal Company - India
- Karbindo Abesyapradhi - Indoneisa
- ASAPP Information Group - India
- Alfred C Toepfer International GmbH - Germany
- Posco Energy - South Korea
- Attock Cement Pakistan Limited
- Eastern Energy - Thailand
- Central Java Power - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Electricity Generating Authority of Thailand
- Ambuja Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Parliament of New Zealand
- Bukit Makmur.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Xindia Steels Limited - India
- Wood Mackenzie - Singapore
- Malabar Cements Ltd - India
- Medco Energi Mining Internasional
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- Petrochimia International Co. Ltd.- Taiwan
- The Treasury - Australian Government
- Vedanta Resources Plc - India
- Kalimantan Lumbung Energi - Indonesia
- Minerals Council of Australia
- GVK Power & Infra Limited - India
- London Commodity Brokers - England
- LBH Netherlands Bv - Netherlands
- Mjunction Services Limited - India
- Gujarat Sidhee Cement - India
- Coal and Oil Company - UAE
- Heidelberg Cement - Germany
- PTC India Limited - India
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- Miang Besar Coal Terminal - Indonesia
- Ministry of Transport, Egypt
- Baramulti Group, Indonesia
- McConnell Dowell - Australia
- Kartika Selabumi Mining - Indonesia
- Edison Trading Spa - Italy
- SMC Global Power, Philippines
- Indogreen Group - Indonesia
- Therma Luzon, Inc, Philippines
- IEA Clean Coal Centre - UK
- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- CIMB Investment Bank - Malaysia
- Barasentosa Lestari - Indonesia
- PowerSource Philippines DevCo
- GN Power Mariveles Coal Plant, Philippines
- Sree Jayajothi Cements Limited - India
- Deloitte Consulting - India
- Thiess Contractors Indonesia
- Indian Oil Corporation Limited
- Kapuas Tunggal Persada - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Pendopo Energi Batubara - Indonesia
- SN Aboitiz Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- Anglo American - United Kingdom
- Australian Commodity Traders Exchange
- Neyveli Lignite Corporation Ltd, - India
- Vizag Seaport Private Limited - India
- Metalloyd Limited - United Kingdom
- Savvy Resources Ltd - HongKong
- Rio Tinto Coal - Australia
- Central Electricity Authority - India
- Cement Manufacturers Association - India
- MS Steel International - UAE
- Carbofer General Trading SA - India
- Economic Council, Georgia
- Kohat Cement Company Ltd. - Pakistan
- Parry Sugars Refinery, India
- Billiton Holdings Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Kobexindo Tractors - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Straits Asia Resources Limited - Singapore
- Timah Investasi Mineral - Indoneisa
- Star Paper Mills Limited - India
- Global Coal Blending Company Limited - Australia
- Coalindo Energy - Indonesia
- Interocean Group of Companies - India
- Simpson Spence & Young - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kumho Petrochemical, South Korea
- Larsen & Toubro Limited - India
- Indo Tambangraya Megah - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- Rashtriya Ispat Nigam Limited - India
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- Bharathi Cement Corporation - India
- Maheswari Brothers Coal Limited - India
- Trasteel International SA, Italy
- Krishnapatnam Port Company Ltd. - India
- New Zealand Coal & Carbon
- Meralco Power Generation, Philippines
- Independent Power Producers Association of India
- Marubeni Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Commonwealth Bank - Australia
- Banpu Public Company Limited - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Salva Resources Pvt Ltd - India
- Borneo Indobara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Toyota Tsusho Corporation, Japan
- Uttam Galva Steels Limited - India
- Thai Mozambique Logistica
- Orica Australia Pty. Ltd.
- Global Green Power PLC Corporation, Philippines
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- The University of Queensland
- White Energy Company Limited
- Meenaskhi Energy Private Limited - India
- Coastal Gujarat Power Limited - India
- European Bulk Services B.V. - Netherlands
- Indian Energy Exchange, India
- Petron Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Indonesian Coal Mining Association
- Aboitiz Power Corporation - Philippines
- Ministry of Mines - Canada
- Australian Coal Association
- Africa Commodities Group - South Africa
- Bhatia International Limited - India
- Global Business Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Romanian Commodities Exchange
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- Sojitz Corporation - Japan
- Tata Chemicals Ltd - India
- CNBM International Corporation - China
- Latin American Coal - Colombia
- Makarim & Taira - Indonesia
- Ministry of Finance - Indonesia
- Grasim Industreis Ltd - India
- Mercuria Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The State Trading Corporation of India Ltd
- San Jose City I Power Corp, Philippines
- Sindya Power Generating Company Private Ltd
- PetroVietnam Power Coal Import and Supply Company
- Price Waterhouse Coopers - Russia
- Chettinad Cement Corporation Ltd - India
- International Coal Ventures Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement - Thailand
- SMG Consultants - Indonesia
- Lanco Infratech Ltd - India
- Jaiprakash Power Ventures ltd
- Renaissance Capital - South Africa
- Bukit Baiduri Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Ind-Barath Power Infra Limited - India
- Orica Mining Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- ICICI Bank Limited - India
- Videocon Industries ltd - India
- TeaM Sual Corporation - Philippines
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- Formosa Plastics Group - Taiwan
- Kepco SPC Power Corporation, Philippines
- Merrill Lynch Commodities Europe
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- South Luzon Thermal Energy Corporation
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