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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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Wednesday, 20 July 16
EDIBLE OIL MARKETS ACROSS THE GLOBE REMAIN UNDER PRESSURE - STELIOS KOLLINTZAS
The edible oil markets across the globe remain under pressure on the back of lackluster demand. Some of the main factors causing the low activity a ...
Tuesday, 19 July 16
INDONESIAN THERMAL COAL INDEXES CONTINUALLY FIRM UP ON ROBUST BUYING INTEREST - CS COAL INDEX
COALspot.com: Average 5000 GAR coal index of Indonesian origin rose One percent week over week to averaging $40.38 per ton this past week, shows CS ...
Monday, 18 July 16
FROM PIT TO PORT: DRY BULK NEEDS A NEW PATH TO PROFITABILITY - TOC EUROPE
During the golden years for commodities, from 2005 to 2014, high demand and big profit margins pushed companies to produce more and more, sacrifici ...
Monday, 18 July 16
BALTIC DRY INDEX REMAIN FIRM, UP BY 5.97 WEEK OVER WEEK
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities continued to remain firm with all segments ending in posi ...
Friday, 15 July 16
US COAL PRODUCTION DOWN 8.4% WEEK-OVER-WEEK
COALspot.com – U.S, world’s second largest coal producers has produced approximately totalled an estimated 12.9 million short tons (mms ...
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- Bahari Cakrawala Sebuku - Indonesia
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- Salva Resources Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- India Bulls Power Limited - India
- Karaikal Port Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kohat Cement Company Ltd. - Pakistan
- PowerSource Philippines DevCo
- Bhatia International Limited - India
- Kumho Petrochemical, South Korea
- Merrill Lynch Commodities Europe
- Wilmar Investment Holdings
- Simpson Spence & Young - Indonesia
- Binh Thuan Hamico - Vietnam
- Mintek Dendrill Indonesia
- Barasentosa Lestari - Indonesia
- Sojitz Corporation - Japan
- Borneo Indobara - Indonesia
- Vedanta Resources Plc - India
- Toyota Tsusho Corporation, Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Minerals Council of Australia
- Siam City Cement - Thailand
- Latin American Coal - Colombia
- Bukit Baiduri Energy - Indonesia
- Malabar Cements Ltd - India
- Star Paper Mills Limited - India
- IHS Mccloskey Coal Group - USA
- Straits Asia Resources Limited - Singapore
- Siam City Cement PLC, Thailand
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- PNOC Exploration Corporation - Philippines
- Aditya Birla Group - India
- Indogreen Group - Indonesia
- Attock Cement Pakistan Limited
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Finance - Indonesia
- Eastern Energy - Thailand
- Aboitiz Power Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Anglo American - United Kingdom
- Sindya Power Generating Company Private Ltd
- Iligan Light & Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Central Java Power - Indonesia
- Essar Steel Hazira Ltd - India
- Coalindo Energy - Indonesia
- CNBM International Corporation - China
- Krishnapatnam Port Company Ltd. - India
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- Electricity Generating Authority of Thailand
- Ind-Barath Power Infra Limited - India
- Deloitte Consulting - India
- SMC Global Power, Philippines
- LBH Netherlands Bv - Netherlands
- Kaltim Prima Coal - Indonesia
- VISA Power Limited - India
- Wood Mackenzie - Singapore
- Chamber of Mines of South Africa
- Australian Commodity Traders Exchange
- Manunggal Multi Energi - Indonesia
- The University of Queensland
- IEA Clean Coal Centre - UK
- Romanian Commodities Exchange
- Karbindo Abesyapradhi - Indoneisa
- Intertek Mineral Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Commonwealth Bank - Australia
- Mjunction Services Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Indika Energy - Indonesia
- Mercator Lines Limited - India
- Eastern Coal Council - USA
- Cement Manufacturers Association - India
- Maheswari Brothers Coal Limited - India
- Kobexindo Tractors - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- London Commodity Brokers - England
- Bukit Makmur.PT - Indonesia
- Mercuria Energy - Indonesia
- Sakthi Sugars Limited - India
- Oldendorff Carriers - Singapore
- Vizag Seaport Private Limited - India
- Jaiprakash Power Ventures ltd
- Indian Energy Exchange, India
- Sical Logistics Limited - India
- Singapore Mercantile Exchange
- PTC India Limited - India
- International Coal Ventures Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Lanco Infratech Ltd - India
- Grasim Industreis Ltd - India
- Ministry of Mines - Canada
- Holcim Trading Pte Ltd - Singapore
- Electricity Authority, New Zealand
- Independent Power Producers Association of India
- Agrawal Coal Company - India
- Meralco Power Generation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Global Business Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Renaissance Capital - South Africa
- Power Finance Corporation Ltd., India
- Goldman Sachs - Singapore
- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- OPG Power Generation Pvt Ltd - India
- GMR Energy Limited - India
- Kapuas Tunggal Persada - Indonesia
- Uttam Galva Steels Limited - India
- Georgia Ports Authority, United States
- Billiton Holdings Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Dalmia Cement Bharat India
- Sinarmas Energy and Mining - Indonesia
- Trasteel International SA, Italy
- GVK Power & Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Heidelberg Cement - Germany
- Africa Commodities Group - South Africa
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- TeaM Sual Corporation - Philippines
- Tamil Nadu electricity Board
- Port Waratah Coal Services - Australia
- Interocean Group of Companies - India
- Parliament of New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Riau Bara Harum - Indonesia
- Meenaskhi Energy Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Directorate Of Revenue Intelligence - India
- Petron Corporation, Philippines
- Antam Resourcindo - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Videocon Industries ltd - India
- Thai Mozambique Logistica
- Parry Sugars Refinery, India
- Central Electricity Authority - India
- ASAPP Information Group - India
- Australian Coal Association
- Posco Energy - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Bharathi Cement Corporation - India
- New Zealand Coal & Carbon
- Economic Council, Georgia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bangladesh Power Developement Board
- Chettinad Cement Corporation Ltd - India
- San Jose City I Power Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- The State Trading Corporation of India Ltd
- GAC Shipping (India) Pvt Ltd
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- Rashtriya Ispat Nigam Limited - India
- Global Coal Blending Company Limited - Australia
- Energy Link Ltd, New Zealand
- Globalindo Alam Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- Bank of Tokyo Mitsubishi UFJ Ltd
- Xindia Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- SMG Consultants - Indonesia
- Medco Energi Mining Internasional
- Ambuja Cements Ltd - India
- Bhushan Steel Limited - India
- Kideco Jaya Agung - Indonesia
- Energy Development Corp, Philippines
- McConnell Dowell - Australia
- Standard Chartered Bank - UAE
- Gujarat Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Altura Mining Limited, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Sidhee Cement - India
- Orica Mining Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Planning Commission, India
- Pipit Mutiara Jaya. PT, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Madhucon Powers Ltd - India
- Ceylon Electricity Board - Sri Lanka
- AsiaOL BioFuels Corp., Philippines
- Indian Oil Corporation Limited
- Formosa Plastics Group - Taiwan
- Larsen & Toubro Limited - India
- Coal and Oil Company - UAE
- White Energy Company Limited
- MS Steel International - UAE
- Semirara Mining Corp, Philippines
- Thiess Contractors Indonesia
- Baramulti Group, Indonesia
- Metalloyd Limited - United Kingdom
- Edison Trading Spa - Italy
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