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