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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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Sunday, 23 November 14
ITALY'S STEAM COAL IMPORTS TO DROP BY 11% IN 2014 - ASSOCARBONI
COALspot.com: Italy’s steam coal imports expected to drop to 16 million tons in 2014 (-11% compared to 2013); coking coal imports to plunge t ...
Saturday, 22 November 14
THE FALL IN BUNKER PRICES REDUCE FUEL COSTS SIGNIFICANTLY - BIMCO, PETER SAND
For a ship that burns 24 tonnes of fuel per day while steaming, fuel costs are reduced by as much as USD 1 million a year if current price level st ...
Saturday, 22 November 14
DRY BULKERS NEWBUILDING DELIVERIES REACHED 11.8 MILLION DWT DURING THIRD QUARTER, NET FLEET GROWTH FOR 2014 TO REACH 5% - HELLENIC SHIPPING NEWS
The dry bulk market has rebounded since its less than impressive performance since the start of the year, but overall, third quarter figures could ...
Friday, 21 November 14
BUMI ENTERS INTO CONDITIONAL SALE & PURCHASE AGREEMENT TO SELL FBS STAKE
COALspot.com: PT Bumi Resources Tbk, one of the Indonesia's largest coal producers confirms that it has executed a Conditional Sale and Purchas ...
Friday, 21 November 14
U.S LAST WEEK'S COAL PRODUCTION STAYS FLAT W-O-W
COALspot.com – United States the world's one of the largest coal producers, produced approximately 18.9 million short tons (mmst) of coal ...
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- Aditya Birla Group - India
- Karbindo Abesyapradhi - Indoneisa
- MS Steel International - UAE
- Independent Power Producers Association of India
- Central Electricity Authority - India
- Gujarat Sidhee Cement - India
- Medco Energi Mining Internasional
- Singapore Mercantile Exchange
- Miang Besar Coal Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- Essar Steel Hazira Ltd - India
- Aboitiz Power Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Kapuas Tunggal Persada - Indonesia
- Pendopo Energi Batubara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Economic Council, Georgia
- Bhushan Steel Limited - India
- Australian Coal Association
- Edison Trading Spa - Italy
- Metalloyd Limited - United Kingdom
- Energy Link Ltd, New Zealand
- Binh Thuan Hamico - Vietnam
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mintek Dendrill Indonesia
- Salva Resources Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Carbofer General Trading SA - India
- Global Business Power Corporation, Philippines
- Ambuja Cements Ltd - India
- PowerSource Philippines DevCo
- Leighton Contractors Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
- Maharashtra Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Vizag Seaport Private Limited - India
- Agrawal Coal Company - India
- Jindal Steel & Power Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Wilmar Investment Holdings
- Sarangani Energy Corporation, Philippines
- Deloitte Consulting - India
- Makarim & Taira - Indonesia
- Manunggal Multi Energi - Indonesia
- Romanian Commodities Exchange
- Straits Asia Resources Limited - Singapore
- London Commodity Brokers - England
- San Jose City I Power Corp, Philippines
- Wood Mackenzie - Singapore
- Ministry of Finance - Indonesia
- Sakthi Sugars Limited - India
- Merrill Lynch Commodities Europe
- Indogreen Group - Indonesia
- Electricity Generating Authority of Thailand
- Anglo American - United Kingdom
- Xindia Steels Limited - India
- Ministry of Transport, Egypt
- Indo Tambangraya Megah - Indonesia
- CIMB Investment Bank - Malaysia
- Bangladesh Power Developement Board
- OPG Power Generation Pvt Ltd - India
- Rio Tinto Coal - Australia
- The State Trading Corporation of India Ltd
- Price Waterhouse Coopers - Russia
- Heidelberg Cement - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- PTC India Limited - India
- Interocean Group of Companies - India
- Tata Chemicals Ltd - India
- Kobexindo Tractors - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- White Energy Company Limited
- International Coal Ventures Pvt Ltd - India
- Commonwealth Bank - Australia
- Australian Commodity Traders Exchange
- Larsen & Toubro Limited - India
- SMG Consultants - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- South Luzon Thermal Energy Corporation
- Petrochimia International Co. Ltd.- Taiwan
- Energy Development Corp, Philippines
- McConnell Dowell - Australia
- Borneo Indobara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
- Standard Chartered Bank - UAE
- Rashtriya Ispat Nigam Limited - India
- Alfred C Toepfer International GmbH - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tamil Nadu electricity Board
- Goldman Sachs - Singapore
- Kartika Selabumi Mining - Indonesia
- Marubeni Corporation - India
- GVK Power & Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Malabar Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Indonesian Coal Mining Association
- Riau Bara Harum - Indonesia
- ASAPP Information Group - India
- Asmin Koalindo Tuhup - Indonesia
- Indian Energy Exchange, India
- Orica Australia Pty. Ltd.
- Star Paper Mills Limited - India
- Gujarat Electricity Regulatory Commission - India
- Intertek Mineral Services - Indonesia
- IEA Clean Coal Centre - UK
- Bhatia International Limited - India
- Toyota Tsusho Corporation, Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- European Bulk Services B.V. - Netherlands
- The University of Queensland
- New Zealand Coal & Carbon
- Dalmia Cement Bharat India
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Trasteel International SA, Italy
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Coal Council - USA
- Bharathi Cement Corporation - India
- Attock Cement Pakistan Limited
- Planning Commission, India
- TeaM Sual Corporation - Philippines
- Siam City Cement - Thailand
- Coalindo Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Power Finance Corporation Ltd., India
- Africa Commodities Group - South Africa
- Videocon Industries ltd - India
- Central Java Power - Indonesia
- Kumho Petrochemical, South Korea
- Krishnapatnam Port Company Ltd. - India
- Georgia Ports Authority, United States
- Neyveli Lignite Corporation Ltd, - India
- Altura Mining Limited, Indonesia
- ICICI Bank Limited - India
- Meralco Power Generation, Philippines
- Indika Energy - Indonesia
- Petron Corporation, Philippines
- GMR Energy Limited - India
- Simpson Spence & Young - Indonesia
- Sical Logistics Limited - India
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- Oldendorff Carriers - Singapore
- Lanco Infratech Ltd - India
- Globalindo Alam Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Latin American Coal - Colombia
- Chettinad Cement Corporation Ltd - India
- Madhucon Powers Ltd - India
- Iligan Light & Power Inc, Philippines
- The Treasury - Australian Government
- Renaissance Capital - South Africa
- CNBM International Corporation - China
- SMC Global Power, Philippines
- Coal and Oil Company - UAE
- Eastern Energy - Thailand
- Coastal Gujarat Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Uttam Galva Steels Limited - India
- Jaiprakash Power Ventures ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- Chamber of Mines of South Africa
- Baramulti Group, Indonesia
- VISA Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Minerals Council of Australia
- Therma Luzon, Inc, Philippines
- Mjunction Services Limited - India
- Mercuria Energy - Indonesia
- Orica Mining Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Posco Energy - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Savvy Resources Ltd - HongKong
- Cement Manufacturers Association - India
- LBH Netherlands Bv - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Kideco Jaya Agung - Indonesia
- Kaltim Prima Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Ministry of Mines - Canada
- Samtan Co., Ltd - South Korea
- Thiess Contractors Indonesia
- SN Aboitiz Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sojitz Corporation - Japan
- Bhoruka Overseas - Indonesia
- Thai Mozambique Logistica
- Indian Oil Corporation Limited
- Sindya Power Generating Company Private Ltd
- Bukit Baiduri Energy - Indonesia
- Semirara Mining Corp, Philippines
- India Bulls Power Limited - India
- Barasentosa Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercator Lines Limited - India
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