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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, 17 February 16
TAP ON OPPORTUNITIES IN GROWING ELECTRICITY DEMAND AND NEW COAL POWER PROJECT DEVELOPMENTS IN THE PHILIPPINES - IBC
Tap on Opportunities in Growing Electricity Demand and New Coal Power Project Developments in the Philippines
Coal Power Generation 2016
19- ...
Wednesday, 17 February 16
THE OWNERS FACING HISTORICAL LOW DRY BULK RATES; COAL IMPORTS TO CHINA IS STILL POINTING TO A STRONG TREND OF DECLINING CONSUMPTION
The sharp fall in dry bulk rates that has been taking place since the end of last year and has left owners facing historical low rates for a substa ...
Monday, 15 February 16
CALL THE DOCTOR! SHIPPING'S MEDICAL DRAMA UNFOLDS......- CLARKSONS
The recycling market has started 2016 with a bang, with a huge volume of tonnage heading to demolition facilities. Many of the key shipping markets ...
Monday, 15 February 16
CS 42 COAL INDEX ROSE 0.07% WEEK OVER WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 0.15 percent week over week to averaging $38.96 per ton on this past Friday, ...
Monday, 15 February 16
BALTIC INDEX MARGINALLY ROSE BY A POINT D-D; CAPESIZE INDEX DOWN 13 POINTS W-W; PANAMAX INDEX UP 29 POINTS W-W
COALspot.com: The freight markets continued to fall this past week.
The BDI, The Baltic Dry Index (BDI) of dry-bulk shipping freights, a measu ...
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- Mercator Lines Limited - India
- Indian Oil Corporation Limited
- Tamil Nadu electricity Board
- PTC India Limited - India
- SMG Consultants - Indonesia
- Therma Luzon, Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coal and Oil Company - UAE
- Rio Tinto Coal - Australia
- San Jose City I Power Corp, Philippines
- Agrawal Coal Company - India
- Economic Council, Georgia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
- Sical Logistics Limited - India
- Xindia Steels Limited - India
- Grasim Industreis Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Formosa Plastics Group - Taiwan
- Kartika Selabumi Mining - Indonesia
- Eastern Energy - Thailand
- Goldman Sachs - Singapore
- Pendopo Energi Batubara - Indonesia
- Sakthi Sugars Limited - India
- Thiess Contractors Indonesia
- Energy Development Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Intertek Mineral Services - Indonesia
- Carbofer General Trading SA - India
- Posco Energy - South Korea
- Timah Investasi Mineral - Indoneisa
- Romanian Commodities Exchange
- The Treasury - Australian Government
- Riau Bara Harum - Indonesia
- South Luzon Thermal Energy Corporation
- Medco Energi Mining Internasional
- Binh Thuan Hamico - Vietnam
- Parry Sugars Refinery, India
- Chamber of Mines of South Africa
- Coastal Gujarat Power Limited - India
- Bhoruka Overseas - Indonesia
- Essar Steel Hazira Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- PNOC Exploration Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
- Thai Mozambique Logistica
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karaikal Port Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Tata Chemicals Ltd - India
- Merrill Lynch Commodities Europe
- Global Coal Blending Company Limited - Australia
- Price Waterhouse Coopers - Russia
- Maharashtra Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Leighton Contractors Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- TeaM Sual Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- SN Aboitiz Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Krishnapatnam Port Company Ltd. - India
- Australian Commodity Traders Exchange
- European Bulk Services B.V. - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Global Business Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Gujarat Sidhee Cement - India
- Trasteel International SA, Italy
- Coalindo Energy - Indonesia
- Attock Cement Pakistan Limited
- Borneo Indobara - Indonesia
- Interocean Group of Companies - India
- Straits Asia Resources Limited - Singapore
- Bayan Resources Tbk. - Indonesia
- Ambuja Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- IEA Clean Coal Centre - UK
- Semirara Mining and Power Corporation, Philippines
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Indika Energy - Indonesia
- Semirara Mining Corp, Philippines
- Bharathi Cement Corporation - India
- Ministry of Transport, Egypt
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Baiduri Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- CNBM International Corporation - China
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement - Thailand
- ASAPP Information Group - India
- Barasentosa Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Independent Power Producers Association of India
- Deloitte Consulting - India
- Sojitz Corporation - Japan
- SMC Global Power, Philippines
- Aditya Birla Group - India
- Makarim & Taira - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- GVK Power & Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Energy Link Ltd, New Zealand
- Edison Trading Spa - Italy
- Rashtriya Ispat Nigam Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Antam Resourcindo - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- Marubeni Corporation - India
- India Bulls Power Limited - India
- Siam City Cement PLC, Thailand
- Billiton Holdings Pty Ltd - Australia
- VISA Power Limited - India
- Larsen & Toubro Limited - India
- PowerSource Philippines DevCo
- Savvy Resources Ltd - HongKong
- Lanco Infratech Ltd - India
- Eastern Coal Council - USA
- Baramulti Group, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Central Electricity Authority - India
- Malabar Cements Ltd - India
- GMR Energy Limited - India
- Commonwealth Bank - Australia
- Oldendorff Carriers - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Bangladesh Power Developement Board
- Standard Chartered Bank - UAE
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- Bulk Trading Sa - Switzerland
- Maheswari Brothers Coal Limited - India
- Orica Australia Pty. Ltd.
- Gujarat Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Sree Jayajothi Cements Limited - India
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Georgia Ports Authority, United States
- Wood Mackenzie - Singapore
- New Zealand Coal & Carbon
- Jaiprakash Power Ventures ltd
- CIMB Investment Bank - Malaysia
- Wilmar Investment Holdings
- Sindya Power Generating Company Private Ltd
- Uttam Galva Steels Limited - India
- Latin American Coal - Colombia
- London Commodity Brokers - England
- McConnell Dowell - Australia
- Parliament of New Zealand
- Indian Energy Exchange, India
- Port Waratah Coal Services - Australia
- Kobexindo Tractors - Indoneisa
- Petron Corporation, Philippines
- The State Trading Corporation of India Ltd
- Electricity Generating Authority of Thailand
- Electricity Authority, New Zealand
- Bukit Makmur.PT - Indonesia
- Central Java Power - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- Toyota Tsusho Corporation, Japan
- Globalindo Alam Lestari - Indonesia
- Indogreen Group - Indonesia
- Meenaskhi Energy Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Cigading International Bulk Terminal - Indonesia
- Mintek Dendrill Indonesia
- Kaltim Prima Coal - Indonesia
- Anglo American - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Sinarmas Energy and Mining - Indonesia
- The University of Queensland
- Indo Tambangraya Megah - Indonesia
- Metalloyd Limited - United Kingdom
- Star Paper Mills Limited - India
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- Australian Coal Association
- Indonesian Coal Mining Association
- White Energy Company Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Heidelberg Cement - Germany
- Jindal Steel & Power Ltd - India
- Bhushan Steel Limited - India
- Africa Commodities Group - South Africa
- Singapore Mercantile Exchange
- Renaissance Capital - South Africa
- Ministry of Finance - Indonesia
- OPG Power Generation Pvt Ltd - India
- Videocon Industries ltd - India
- Minerals Council of Australia
- Ministry of Mines - Canada
- Kepco SPC Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- MS Steel International - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dalmia Cement Bharat India
- Orica Mining Services - Indonesia
- Altura Mining Limited, Indonesia
- Miang Besar Coal Terminal - Indonesia
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