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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, 08 October 14
OIL COULD FALL TO USD80 BEFORE SHALE SUPPLY RESPONSE - FITCH
COALspot.com: Brent oil could fall as low as USD80 a barrel before triggering a self-correcting supply response with shale-oil drillers cutting inv ...
Wednesday, 08 October 14
IS THERE ANY BRIGHT SIDE ON THE DRY BULK SEGMENT? - YANNIS OLZIERSKY
In the movie “Life Of Brian”, a character on a nearby cross was singing the famous “Always look on the bright side of life” ...
Tuesday, 07 October 14
TAIPOWER TO IMPORT 525K MT OF LOW ASH AND EXTRA LOW SULFUR SUB-BITUMINOUS COAL
COALspot.com: Taiwan Power Company intends to procure 525,000 metric tons of low ash and extra low sulfur sub-bituminous coal for Taipower thermal ...
Tuesday, 07 October 14
SUB-BIT FOB INDONESIA COAL SWAP SHOWS A FLAT TO WEAK TREND THIS PAST WEEK
COALspot.com: Indonesian coal swaps November 2014 delivery flat week on week and gained US$ 0.10 (-0.20%) per mt day on day. The swap also lost US$ ...
Tuesday, 07 October 14
THE RIO TINTO CONFIRMS THAT NO DISCUSSIONS ARE TAKING PLACE WITH GLENCORE
COALspot.com: The board of Rio Tinto notes the recent press speculation regarding a possible combination of Rio Tinto and Glencore.The Rio Tinto bo ...
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- Pendopo Energi Batubara - Indonesia
- Karaikal Port Pvt Ltd - India
- Coalindo Energy - Indonesia
- Commonwealth Bank - Australia
- VISA Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Meenaskhi Energy Private Limited - India
- Borneo Indobara - Indonesia
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Sarangani Energy Corporation, Philippines
- Latin American Coal - Colombia
- Ceylon Electricity Board - Sri Lanka
- Wood Mackenzie - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Trasteel International SA, Italy
- SMC Global Power, Philippines
- Tata Chemicals Ltd - India
- Simpson Spence & Young - Indonesia
- Banpu Public Company Limited - Thailand
- Madhucon Powers Ltd - India
- Baramulti Group, Indonesia
- Anglo American - United Kingdom
- Carbofer General Trading SA - India
- Star Paper Mills Limited - India
- Samtan Co., Ltd - South Korea
- Coal and Oil Company - UAE
- Thai Mozambique Logistica
- Vedanta Resources Plc - India
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Authority, New Zealand
- San Jose City I Power Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Thiess Contractors Indonesia
- Merrill Lynch Commodities Europe
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kideco Jaya Agung - Indonesia
- Standard Chartered Bank - UAE
- Ministry of Mines - Canada
- TNB Fuel Sdn Bhd - Malaysia
- Attock Cement Pakistan Limited
- Meralco Power Generation, Philippines
- Medco Energi Mining Internasional
- Oldendorff Carriers - Singapore
- Global Green Power PLC Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Barasentosa Lestari - Indonesia
- Central Java Power - Indonesia
- Marubeni Corporation - India
- LBH Netherlands Bv - Netherlands
- Parliament of New Zealand
- Malabar Cements Ltd - India
- Sojitz Corporation - Japan
- ASAPP Information Group - India
- Posco Energy - South Korea
- Antam Resourcindo - Indonesia
- Wilmar Investment Holdings
- Globalindo Alam Lestari - Indonesia
- Energy Development Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- Ambuja Cements Ltd - India
- GMR Energy Limited - India
- Intertek Mineral Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Minerals Council of Australia
- Bukit Baiduri Energy - Indonesia
- Metalloyd Limited - United Kingdom
- PNOC Exploration Corporation - Philippines
- PTC India Limited - India
- Australian Coal Association
- Bhatia International Limited - India
- Indian Oil Corporation Limited
- Coastal Gujarat Power Limited - India
- CIMB Investment Bank - Malaysia
- International Coal Ventures Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Grasim Industreis Ltd - India
- Kumho Petrochemical, South Korea
- Maheswari Brothers Coal Limited - India
- Price Waterhouse Coopers - Russia
- GVK Power & Infra Limited - India
- Mercuria Energy - Indonesia
- MS Steel International - UAE
- Bharathi Cement Corporation - India
- Power Finance Corporation Ltd., India
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining Corp, Philippines
- Electricity Generating Authority of Thailand
- Iligan Light & Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Aditya Birla Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- AsiaOL BioFuels Corp., Philippines
- Kepco SPC Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Mjunction Services Limited - India
- Lanco Infratech Ltd - India
- Kobexindo Tractors - Indoneisa
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Singapore Mercantile Exchange
- Sical Logistics Limited - India
- Economic Council, Georgia
- Indo Tambangraya Megah - Indonesia
- Siam City Cement - Thailand
- Central Electricity Authority - India
- McConnell Dowell - Australia
- Cigading International Bulk Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- Bangladesh Power Developement Board
- New Zealand Coal & Carbon
- Salva Resources Pvt Ltd - India
- Romanian Commodities Exchange
- The State Trading Corporation of India Ltd
- ICICI Bank Limited - India
- Holcim Trading Pte Ltd - Singapore
- Africa Commodities Group - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Heidelberg Cement - Germany
- Agrawal Coal Company - India
- Deloitte Consulting - India
- Alfred C Toepfer International GmbH - Germany
- Jaiprakash Power Ventures ltd
- Binh Thuan Hamico - Vietnam
- Planning Commission, India
- Aboitiz Power Corporation - Philippines
- Indian Energy Exchange, India
- Directorate Of Revenue Intelligence - India
- Xindia Steels Limited - India
- India Bulls Power Limited - India
- PowerSource Philippines DevCo
- GN Power Mariveles Coal Plant, Philippines
- Indogreen Group - Indonesia
- SMG Consultants - Indonesia
- Mintek Dendrill Indonesia
- Essar Steel Hazira Ltd - India
- Renaissance Capital - South Africa
- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- Kaltim Prima Coal - Indonesia
- Bhushan Steel Limited - India
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- Sree Jayajothi Cements Limited - India
- Global Business Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Cement Manufacturers Association - India
- Bukit Makmur.PT - Indonesia
- Ministry of Transport, Egypt
- Toyota Tsusho Corporation, Japan
- Indonesian Coal Mining Association
- Indika Energy - Indonesia
- Tamil Nadu electricity Board
- Petron Corporation, Philippines
- Ministry of Finance - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Edison Trading Spa - Italy
- Riau Bara Harum - Indonesia
- Chettinad Cement Corporation Ltd - India
- Therma Luzon, Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Bulk Trading Sa - Switzerland
- Jindal Steel & Power Ltd - India
- London Commodity Brokers - England
- Formosa Plastics Group - Taiwan
- Chamber of Mines of South Africa
- Neyveli Lignite Corporation Ltd, - India
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Energy - Thailand
- Parry Sugars Refinery, India
- Videocon Industries ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- White Energy Company Limited
- Port Waratah Coal Services - Australia
- IHS Mccloskey Coal Group - USA
- Kartika Selabumi Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Interocean Group of Companies - India
- Timah Investasi Mineral - Indoneisa
- Independent Power Producers Association of India
- TeaM Sual Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Kohat Cement Company Ltd. - Pakistan
- Dalmia Cement Bharat India
- Rio Tinto Coal - Australia
- Orica Australia Pty. Ltd.
- CNBM International Corporation - China
- Larsen & Toubro Limited - India
- Krishnapatnam Port Company Ltd. - India
- The University of Queensland
- Orica Mining Services - Indonesia
- Straits Asia Resources Limited - Singapore
- The Treasury - Australian Government
- Karbindo Abesyapradhi - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercator Lines Limited - India
- Gujarat Sidhee Cement - India
- Siam City Cement PLC, Thailand
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