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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, 09 November 23
GREEK AND CHINESE COMPANIES OWN 34% OF THE GLOBAL FLEET’S CARGO CAPACITY - BIMCO
“The global fleet of cargo carrying ships consists of around 61,000 ships with a deadweight capacity of about 2,200 million tonnes. The ships ...
Monday, 23 October 23
CHINA SEPT COAL OUTPUT HITS SIX-MONTH HIGH ON RISING POWER DEMAND - REUTERS
China’s September coal output rose 0.4% from August to the highest level since March, official data showed on Wednesday, on rising power dema ...
Monday, 23 October 23
INDIA COAL INVENTORIES DROP AT FASTEST PACE IN TWO YEARS, BOOSTING IMPORTS - REUTERS
Coal inventories at Indian power plants in the first half of October fell at their fastest rate in two years, an analysis of government data showed ...
Tuesday, 19 September 23
LNG SHIPPING STOCKS: THE ASIAN GROWTH UP-INDICES
Last week, the UP World LNG Shipping Index (UPI) gained 3.81 points or 2.51%, closing at 155.85 points. This index tracks the performance of LNG sh ...
Sunday, 10 September 23
GOLDMAN SACHS PREDICTS OIL PRICE TO HIT $100 ON OPEC CUTS - YAHOO FINANCE
Oil supply cuts by Saudi Arabia and Russia could lead to Brent crude jumping as high as $107 a barrel in 2024, Goldman Sachs Commodities Research h ...
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- Attock Cement Pakistan Limited
- Global Business Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Independent Power Producers Association of India
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Globalindo Alam Lestari - Indonesia
- Coal and Oil Company - UAE
- Parry Sugars Refinery, India
- Agrawal Coal Company - India
- TNB Fuel Sdn Bhd - Malaysia
- Metalloyd Limited - United Kingdom
- PNOC Exploration Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- CIMB Investment Bank - Malaysia
- SN Aboitiz Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Africa Commodities Group - South Africa
- Essar Steel Hazira Ltd - India
- White Energy Company Limited
- Rio Tinto Coal - Australia
- Mercuria Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Vedanta Resources Plc - India
- PTC India Limited - India
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- Siam City Cement PLC, Thailand
- Ministry of Transport, Egypt
- Kobexindo Tractors - Indoneisa
- The Treasury - Australian Government
- PowerSource Philippines DevCo
- Ceylon Electricity Board - Sri Lanka
- Singapore Mercantile Exchange
- Meralco Power Generation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- SMG Consultants - Indonesia
- Salva Resources Pvt Ltd - India
- Planning Commission, India
- Formosa Plastics Group - Taiwan
- Electricity Generating Authority of Thailand
- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Commonwealth Bank - Australia
- Bayan Resources Tbk. - Indonesia
- Riau Bara Harum - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jindal Steel & Power Ltd - India
- Economic Council, Georgia
- Jaiprakash Power Ventures ltd
- Australian Coal Association
- Kepco SPC Power Corporation, Philippines
- Cement Manufacturers Association - India
- Binh Thuan Hamico - Vietnam
- Sojitz Corporation - Japan
- Trasteel International SA, Italy
- Marubeni Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Indian Oil Corporation Limited
- Uttam Galva Steels Limited - India
- Indonesian Coal Mining Association
- Tamil Nadu electricity Board
- Wood Mackenzie - Singapore
- Cigading International Bulk Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Electricity Authority, New Zealand
- Ind-Barath Power Infra Limited - India
- Power Finance Corporation Ltd., India
- Romanian Commodities Exchange
- Bhatia International Limited - India
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- Georgia Ports Authority, United States
- Meenaskhi Energy Private Limited - India
- Bukit Makmur.PT - Indonesia
- GMR Energy Limited - India
- New Zealand Coal & Carbon
- Barasentosa Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- Videocon Industries ltd - India
- Renaissance Capital - South Africa
- Wilmar Investment Holdings
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Lanco Infratech Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Aboitiz Power Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Java Power - Indonesia
- Chamber of Mines of South Africa
- GVK Power & Infra Limited - India
- TeaM Sual Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Karaikal Port Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- CNBM International Corporation - China
- Coastal Gujarat Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Bhushan Steel Limited - India
- McConnell Dowell - Australia
- Ministry of Mines - Canada
- Savvy Resources Ltd - HongKong
- Kapuas Tunggal Persada - Indonesia
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
- Indogreen Group - Indonesia
- Thai Mozambique Logistica
- Mercator Lines Limited - India
- Siam City Cement - Thailand
- Billiton Holdings Pty Ltd - Australia
- Star Paper Mills Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Coalindo Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Dalmia Cement Bharat India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Semirara Mining Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Sindya Power Generating Company Private Ltd
- Orica Mining Services - Indonesia
- Energy Link Ltd, New Zealand
- Global Green Power PLC Corporation, Philippines
- Indian Energy Exchange, India
- Anglo American - United Kingdom
- Global Coal Blending Company Limited - Australia
- Malabar Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Vizag Seaport Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- Heidelberg Cement - Germany
- International Coal Ventures Pvt Ltd - India
- ICICI Bank Limited - India
- Orica Australia Pty. Ltd.
- Bhoruka Overseas - Indonesia
- Eastern Coal Council - USA
- Indika Energy - Indonesia
- Bharathi Cement Corporation - India
- The University of Queensland
- Timah Investasi Mineral - Indoneisa
- IHS Mccloskey Coal Group - USA
- Leighton Contractors Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Grasim Industreis Ltd - India
- Madhucon Powers Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Aditya Birla Group - India
- Kideco Jaya Agung - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Deloitte Consulting - India
- Bukit Asam (Persero) Tbk - Indonesia
- Xindia Steels Limited - India
- San Jose City I Power Corp, Philippines
- Posco Energy - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Petrochimia International Co. Ltd.- Taiwan
- Larsen & Toubro Limited - India
- Petron Corporation, Philippines
- Sical Logistics Limited - India
- Minerals Council of Australia
- LBH Netherlands Bv - Netherlands
- Merrill Lynch Commodities Europe
- Mjunction Services Limited - India
- Bukit Baiduri Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Energy Development Corp, Philippines
- Samtan Co., Ltd - South Korea
- South Luzon Thermal Energy Corporation
- Medco Energi Mining Internasional
- Altura Mining Limited, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Parliament of New Zealand
- Central Electricity Authority - India
- Ministry of Finance - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Makarim & Taira - Indonesia
- Thiess Contractors Indonesia
- Sakthi Sugars Limited - India
- Borneo Indobara - Indonesia
- Interocean Group of Companies - India
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- AsiaOL BioFuels Corp., Philippines
- Bangladesh Power Developement Board
- Bulk Trading Sa - Switzerland
- Krishnapatnam Port Company Ltd. - India
- Edison Trading Spa - Italy
- Maheswari Brothers Coal Limited - India
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Latin American Coal - Colombia
- Australian Commodity Traders Exchange
- Chettinad Cement Corporation Ltd - India
- Therma Luzon, Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sree Jayajothi Cements Limited - India
- Ambuja Cements Ltd - India
- Mintek Dendrill Indonesia
- Miang Besar Coal Terminal - Indonesia
- MS Steel International - UAE
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