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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, 24 February 16
HOW IS THE FUEL MIX FOR U.S. ELECTRICITY GENERATION CHANGING? - EIA
In recent years, there have been changes in the mix of fuels used to generate electricity in the United States. Natural gas and renewable energy so ...
Wednesday, 24 February 16
PRIVATE EQUITY FUNDS LOOKING TO EXIT SHIPPING, MOST NOTABLY DRY BULK, AS OVERORDERING HAS RESULTED IN EXCESS TONNAGE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The injection of more than $13 billion in shipping from various private equity funds over the past few years has resulted in what many feared would ...
Wednesday, 24 February 16
THIRTEEN - NOT ALWAYS AN UNLUCKY NUMBER? - CLARKSONS
Back in early 1999 the price of a 5 year old Panamax bulkcarrier dipped to $13.5m, and ever since analysts have hailed purchase decisions made at t ...
Monday, 22 February 16
4200 GAR COAL INDEX SETTLES AT $27.02, DOWN 0.07% FROM LAST WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 0.17 percent week over week to averaging $38.89 per ton on this past Friday, ...
Monday, 22 February 16
FREIGHT MARKETS PICKED UP SLIGHTLY THIS PAST WEEK
COALspot.com: The freight markets picked up slightly this past week.
The Baltic Dry Index (BDI) of dry-bulk shipping freights, a measure of gl ...
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- European Bulk Services B.V. - Netherlands
- GVK Power & Infra Limited - India
- Sarangani Energy Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Merrill Lynch Commodities Europe
- Australian Coal Association
- PetroVietnam Power Coal Import and Supply Company
- Power Finance Corporation Ltd., India
- MS Steel International - UAE
- Kartika Selabumi Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Videocon Industries ltd - India
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Sakthi Sugars Limited - India
- Australian Commodity Traders Exchange
- Agrawal Coal Company - India
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- Eastern Coal Council - USA
- Petron Corporation, Philippines
- Parliament of New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Latin American Coal - Colombia
- Price Waterhouse Coopers - Russia
- Sojitz Corporation - Japan
- Electricity Generating Authority of Thailand
- Jorong Barutama Greston.PT - Indonesia
- Indian Oil Corporation Limited
- Therma Luzon, Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Bukit Baiduri Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Malabar Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Electricity Authority, New Zealand
- Toyota Tsusho Corporation, Japan
- Lanco Infratech Ltd - India
- Africa Commodities Group - South Africa
- Simpson Spence & Young - Indonesia
- IHS Mccloskey Coal Group - USA
- Indogreen Group - Indonesia
- Semirara Mining Corp, Philippines
- Port Waratah Coal Services - Australia
- VISA Power Limited - India
- GMR Energy Limited - India
- Karaikal Port Pvt Ltd - India
- Attock Cement Pakistan Limited
- Coalindo Energy - Indonesia
- Marubeni Corporation - India
- Bangladesh Power Developement Board
- Iligan Light & Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Cement Manufacturers Association - India
- Aditya Birla Group - India
- Mercator Lines Limited - India
- ASAPP Information Group - India
- Pendopo Energi Batubara - Indonesia
- Parry Sugars Refinery, India
- Salva Resources Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Grasim Industreis Ltd - India
- PNOC Exploration Corporation - Philippines
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- Indian Energy Exchange, India
- Pipit Mutiara Jaya. PT, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Directorate General of MIneral and Coal - Indonesia
- Edison Trading Spa - Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
- Interocean Group of Companies - India
- CIMB Investment Bank - Malaysia
- Xindia Steels Limited - India
- Global Business Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Ministry of Finance - Indonesia
- Planning Commission, India
- Global Green Power PLC Corporation, Philippines
- Uttam Galva Steels Limited - India
- Commonwealth Bank - Australia
- Gujarat Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- Bhoruka Overseas - Indonesia
- Sical Logistics Limited - India
- CNBM International Corporation - China
- Essar Steel Hazira Ltd - India
- Romanian Commodities Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bayan Resources Tbk. - Indonesia
- Chamber of Mines of South Africa
- Kapuas Tunggal Persada - Indonesia
- Kobexindo Tractors - Indoneisa
- Larsen & Toubro Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Star Paper Mills Limited - India
- Renaissance Capital - South Africa
- Meenaskhi Energy Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Karbindo Abesyapradhi - Indoneisa
- SMG Consultants - Indonesia
- SN Aboitiz Power Inc, Philippines
- McConnell Dowell - Australia
- Georgia Ports Authority, United States
- Indika Energy - Indonesia
- Coal and Oil Company - UAE
- Posco Energy - South Korea
- Timah Investasi Mineral - Indoneisa
- Heidelberg Cement - Germany
- TeaM Sual Corporation - Philippines
- Aboitiz Power Corporation - Philippines
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- London Commodity Brokers - England
- Altura Mining Limited, Indonesia
- Borneo Indobara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Coastal Gujarat Power Limited - India
- Directorate Of Revenue Intelligence - India
- Global Coal Blending Company Limited - Australia
- Bulk Trading Sa - Switzerland
- Oldendorff Carriers - Singapore
- Antam Resourcindo - Indonesia
- Kideco Jaya Agung - Indonesia
- SMC Global Power, Philippines
- Sindya Power Generating Company Private Ltd
- Vedanta Resources Plc - India
- Mintek Dendrill Indonesia
- Thiess Contractors Indonesia
- Madhucon Powers Ltd - India
- Rio Tinto Coal - Australia
- Straits Asia Resources Limited - Singapore
- Independent Power Producers Association of India
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement - Thailand
- Savvy Resources Ltd - HongKong
- Energy Development Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Indonesian Coal Mining Association
- Central Electricity Authority - India
- Ambuja Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- PowerSource Philippines DevCo
- Wilmar Investment Holdings
- Singapore Mercantile Exchange
- Carbofer General Trading SA - India
- Orica Australia Pty. Ltd.
- Sinarmas Energy and Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- New Zealand Coal & Carbon
- The University of Queensland
- Gujarat Mineral Development Corp Ltd - India
- Mjunction Services Limited - India
- Minerals Council of Australia
- The Treasury - Australian Government
- Semirara Mining and Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Kaltim Prima Coal - Indonesia
- Banpu Public Company Limited - Thailand
- Bhushan Steel Limited - India
- Rashtriya Ispat Nigam Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Maheswari Brothers Coal Limited - India
- Trasteel International SA, Italy
- Bhatia International Limited - India
- Ceylon Electricity Board - Sri Lanka
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meralco Power Generation, Philippines
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- Riau Bara Harum - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- White Energy Company Limited
- Economic Council, Georgia
- Billiton Holdings Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Mines - Canada
- Tamil Nadu electricity Board
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Holcim Trading Pte Ltd - Singapore
- Eastern Energy - Thailand
- PTC India Limited - India
- Orica Mining Services - Indonesia
- Baramulti Group, Indonesia
- Wood Mackenzie - Singapore
- Makarim & Taira - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Makmur.PT - Indonesia
- Goldman Sachs - Singapore
- Gujarat Sidhee Cement - India
- OPG Power Generation Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Siam City Cement PLC, Thailand
- Formosa Plastics Group - Taiwan
- Ministry of Transport, Egypt
- Tata Chemicals Ltd - India
- India Bulls Power Limited - India
- Standard Chartered Bank - UAE
- Alfred C Toepfer International GmbH - Germany
- Globalindo Alam Lestari - Indonesia
- Thai Mozambique Logistica
- Jaiprakash Power Ventures ltd
- Binh Thuan Hamico - Vietnam
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