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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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Friday, 11 September 15
SHIPPING MARKETS SHOW MIXED EMOTIONS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has managed to show marginal improvements over the past few days, with the Capesize segment faring better than smaller dry bulk ...
Friday, 11 September 15
U.S'S WEEKLY COAL PRODUCTION WAS ALMOST FLAT PAST WEEK
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 18.6 million shor ...
Thursday, 10 September 15
U.S. H1' 15 STEAM COAL EXPORTS FELL BY 21 PER CENT Y-Y: EIA
Coal Trade
Slower growth in world coal demand, lower international coal prices, and higher coal output in other coal-exporting countries have all ...
Thursday, 10 September 15
INDONESIAN COAL BENCHMARK PRICE HITS A NEW LOW OF $58.21 PER TON
COALspot.com - The Director General of Mineral and Coal of Indonesia once a again revised down Indonesian coal benchmark price to US$ 58.21 per MT ...
Thursday, 10 September 15
IF NOT NOW, WHEN? - GIANNIS ANDRITSOPOULOS
Our industry is well known to be cyclical with some cycles lasting longer than others. Despite the fact that these shifts in the behavior of the fr ...
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- Eastern Energy - Thailand
- OPG Power Generation Pvt Ltd - India
- Lanco Infratech Ltd - India
- New Zealand Coal & Carbon
- Bangladesh Power Developement Board
- Aboitiz Power Corporation - Philippines
- Sical Logistics Limited - India
- Krishnapatnam Port Company Ltd. - India
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- Altura Mining Limited, Indonesia
- Energy Development Corp, Philippines
- Jaiprakash Power Ventures ltd
- GN Power Mariveles Coal Plant, Philippines
- Global Coal Blending Company Limited - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Marubeni Corporation - India
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- Commonwealth Bank - Australia
- Bulk Trading Sa - Switzerland
- PNOC Exploration Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Gujarat Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- Deloitte Consulting - India
- Maharashtra Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Economic Council, Georgia
- Bukit Makmur.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- GVK Power & Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Medco Energi Mining Internasional
- Banpu Public Company Limited - Thailand
- Directorate Of Revenue Intelligence - India
- Antam Resourcindo - Indonesia
- Orica Australia Pty. Ltd.
- Merrill Lynch Commodities Europe
- Vizag Seaport Private Limited - India
- India Bulls Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Independent Power Producers Association of India
- Intertek Mineral Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thai Mozambique Logistica
- GMR Energy Limited - India
- Standard Chartered Bank - UAE
- Tata Chemicals Ltd - India
- Timah Investasi Mineral - Indoneisa
- Metalloyd Limited - United Kingdom
- Goldman Sachs - Singapore
- Rio Tinto Coal - Australia
- SN Aboitiz Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Indika Energy - Indonesia
- Australian Coal Association
- Renaissance Capital - South Africa
- Sojitz Corporation - Japan
- Bukit Baiduri Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kobexindo Tractors - Indoneisa
- The University of Queensland
- Kohat Cement Company Ltd. - Pakistan
- Bhatia International Limited - India
- Aditya Birla Group - India
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Central Electricity Authority - India
- Indian Energy Exchange, India
- Barasentosa Lestari - Indonesia
- Star Paper Mills Limited - India
- Globalindo Alam Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- TeaM Sual Corporation - Philippines
- Malabar Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Interocean Group of Companies - India
- PetroVietnam Power Coal Import and Supply Company
- Kumho Petrochemical, South Korea
- ASAPP Information Group - India
- Neyveli Lignite Corporation Ltd, - India
- PTC India Limited - India
- Uttam Galva Steels Limited - India
- Coastal Gujarat Power Limited - India
- Ministry of Finance - Indonesia
- Tamil Nadu electricity Board
- International Coal Ventures Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Cement Manufacturers Association - India
- PowerSource Philippines DevCo
- Power Finance Corporation Ltd., India
- Australian Commodity Traders Exchange
- Bhushan Steel Limited - India
- Miang Besar Coal Terminal - Indonesia
- Makarim & Taira - Indonesia
- Indian Oil Corporation Limited
- Meenaskhi Energy Private Limited - India
- Kideco Jaya Agung - Indonesia
- Salva Resources Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Baramulti Group, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bahari Cakrawala Sebuku - Indonesia
- Edison Trading Spa - Italy
- Eastern Coal Council - USA
- Indonesian Coal Mining Association
- Thiess Contractors Indonesia
- Mercuria Energy - Indonesia
- Trasteel International SA, Italy
- Agrawal Coal Company - India
- Meralco Power Generation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Holcim Trading Pte Ltd - Singapore
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- AsiaOL BioFuels Corp., Philippines
- Ministry of Transport, Egypt
- CIMB Investment Bank - Malaysia
- Chamber of Mines of South Africa
- Orica Mining Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Coal and Oil Company - UAE
- Georgia Ports Authority, United States
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sakthi Sugars Limited - India
- Vedanta Resources Plc - India
- Mjunction Services Limited - India
- Parry Sugars Refinery, India
- Petron Corporation, Philippines
- McConnell Dowell - Australia
- Binh Thuan Hamico - Vietnam
- Jindal Steel & Power Ltd - India
- IEA Clean Coal Centre - UK
- Planning Commission, India
- Electricity Authority, New Zealand
- Riau Bara Harum - Indonesia
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Xindia Steels Limited - India
- Borneo Indobara - Indonesia
- Indo Tambangraya Megah - Indonesia
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Petrochimia International Co. Ltd.- Taiwan
- Grasim Industreis Ltd - India
- Bharathi Cement Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Sindya Power Generating Company Private Ltd
- Semirara Mining Corp, Philippines
- ICICI Bank Limited - India
- Essar Steel Hazira Ltd - India
- Kartika Selabumi Mining - Indonesia
- Heidelberg Cement - Germany
- SMG Consultants - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Port Waratah Coal Services - Australia
- Electricity Generating Authority of Thailand
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Samtan Co., Ltd - South Korea
- Parliament of New Zealand
- Mercator Lines Limited - India
- Siam City Cement PLC, Thailand
- Kepco SPC Power Corporation, Philippines
- Videocon Industries ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- Wood Mackenzie - Singapore
- Global Business Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- The Treasury - Australian Government
- Formosa Plastics Group - Taiwan
- Africa Commodities Group - South Africa
- Madhucon Powers Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Latin American Coal - Colombia
- Therma Luzon, Inc, Philippines
- Wilmar Investment Holdings
- Ambuja Cements Ltd - India
- Minerals Council of Australia
- Coalindo Energy - Indonesia
- Mintek Dendrill Indonesia
- Oldendorff Carriers - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kaltim Prima Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Chettinad Cement Corporation Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- MS Steel International - UAE
- Singapore Mercantile Exchange
- Siam City Cement - Thailand
- Straits Asia Resources Limited - Singapore
- Maheswari Brothers Coal Limited - India
- White Energy Company Limited
- Sree Jayajothi Cements Limited - India
- Dalmia Cement Bharat India
- Larsen & Toubro Limited - India
- Pendopo Energi Batubara - Indonesia
- Global Green Power PLC Corporation, Philippines
- CNBM International Corporation - China
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