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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, 26 September 14
NEWCASTLMAXES ARE THE MOST SOUGHT AFTER VESSELS BY SHIP OWNERS TODAY SAYS VESSELS VALUE
KNOWLEDGE TO ELEVATE
Determining a ship’s fair value can be a very tricky business, especially when you’re the one paying. As such ...
Thursday, 25 September 14
LACK OF COAL BUSINESS PUSHING DOWN PANAMAX EARNINGS IN PACIFIC
Handy
In the Atlantic we see rates steady climbing upwards. More coal cargoes out of USG and USEC are helping the TA market which is up some USD ...
Wednesday, 24 September 14
ADARO AGREED TO REDUCE ITS CONCESSION AREA TO 31,379.8 HECTARES
COALspot.com: PT Adaro Energy Tbk (Adaro Energy) today announced that, PT Adaro Indonesia (AI), its wholly owned subsidiary, entered into a M ...
Wednesday, 24 September 14
CAPESIZE: ACTIVITY IN BOTH BASINS WAS UNIMPRESSIVE
COALspot.com: The end of the week prior seems to have marked the tone for the days that followed, with the Dry Bulk market giving up a significant ...
Tuesday, 23 September 14
MEDCO TO INCREASE ITS COAL PRODUCTION NEXT YEAR
COALspot.com: PT Medco Energi Internasional is looking to increase its coal production next year, supported by the launch of operations at its Duta ...
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- Krishnapatnam Port Company Ltd. - India
- Global Business Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Pendopo Energi Batubara - Indonesia
- MS Steel International - UAE
- Samtan Co., Ltd - South Korea
- Kobexindo Tractors - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Malabar Cements Ltd - India
- New Zealand Coal & Carbon
- Commonwealth Bank - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Indika Energy - Indonesia
- Carbofer General Trading SA - India
- Thiess Contractors Indonesia
- Bharathi Cement Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Jorong Barutama Greston.PT - Indonesia
- Minerals Council of Australia
- Intertek Mineral Services - Indonesia
- Oldendorff Carriers - Singapore
- Bayan Resources Tbk. - Indonesia
- Port Waratah Coal Services - Australia
- Georgia Ports Authority, United States
- Jindal Steel & Power Ltd - India
- Posco Energy - South Korea
- Xindia Steels Limited - India
- Central Java Power - Indonesia
- TeaM Sual Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Chamber of Mines of South Africa
- Ceylon Electricity Board - Sri Lanka
- TNB Fuel Sdn Bhd - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- PowerSource Philippines DevCo
- Siam City Cement PLC, Thailand
- Deloitte Consulting - India
- Petron Corporation, Philippines
- Coalindo Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Karaikal Port Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Mintek Dendrill Indonesia
- Sakthi Sugars Limited - India
- Ambuja Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Essar Steel Hazira Ltd - India
- Videocon Industries ltd - India
- Siam City Cement - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Larsen & Toubro Limited - India
- San Jose City I Power Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- London Commodity Brokers - England
- European Bulk Services B.V. - Netherlands
- Altura Mining Limited, Indonesia
- IEA Clean Coal Centre - UK
- Coal and Oil Company - UAE
- Bukit Makmur.PT - Indonesia
- The State Trading Corporation of India Ltd
- Coastal Gujarat Power Limited - India
- Cement Manufacturers Association - India
- Edison Trading Spa - Italy
- GAC Shipping (India) Pvt Ltd
- Eastern Coal Council - USA
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- Singapore Mercantile Exchange
- Heidelberg Cement - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sical Logistics Limited - India
- Cigading International Bulk Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Ministry of Transport, Egypt
- Borneo Indobara - Indonesia
- Makarim & Taira - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Anglo American - United Kingdom
- Indogreen Group - Indonesia
- Dalmia Cement Bharat India
- Ind-Barath Power Infra Limited - India
- Agrawal Coal Company - India
- Independent Power Producers Association of India
- Riau Bara Harum - Indonesia
- The University of Queensland
- Offshore Bulk Terminal Pte Ltd, Singapore
- India Bulls Power Limited - India
- Iligan Light & Power Inc, Philippines
- Star Paper Mills Limited - India
- Alfred C Toepfer International GmbH - Germany
- Binh Thuan Hamico - Vietnam
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- Kumho Petrochemical, South Korea
- Madhucon Powers Ltd - India
- Timah Investasi Mineral - Indoneisa
- Mercuria Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Merrill Lynch Commodities Europe
- Electricity Authority, New Zealand
- Meralco Power Generation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Energy Link Ltd, New Zealand
- Sojitz Corporation - Japan
- Sree Jayajothi Cements Limited - India
- Bhatia International Limited - India
- Kaltim Prima Coal - Indonesia
- Orica Australia Pty. Ltd.
- Vizag Seaport Private Limited - India
- PTC India Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Banpu Public Company Limited - Thailand
- Indian Oil Corporation Limited
- Price Waterhouse Coopers - Russia
- Economic Council, Georgia
- Uttam Galva Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Karbindo Abesyapradhi - Indoneisa
- White Energy Company Limited
- Maheswari Brothers Coal Limited - India
- GMR Energy Limited - India
- Grasim Industreis Ltd - India
- Sindya Power Generating Company Private Ltd
- Indo Tambangraya Megah - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Global Coal Blending Company Limited - Australia
- Manunggal Multi Energi - Indonesia
- ICICI Bank Limited - India
- Mercator Lines Limited - India
- Gujarat Sidhee Cement - India
- Wilmar Investment Holdings
- Eastern Energy - Thailand
- Therma Luzon, Inc, Philippines
- Antam Resourcindo - Indonesia
- Australian Commodity Traders Exchange
- Baramulti Group, Indonesia
- SMC Global Power, Philippines
- Mjunction Services Limited - India
- PNOC Exploration Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Tata Chemicals Ltd - India
- Planning Commission, India
- Savvy Resources Ltd - HongKong
- Meenaskhi Energy Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Renaissance Capital - South Africa
- Parliament of New Zealand
- Electricity Generating Authority of Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SN Aboitiz Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- McConnell Dowell - Australia
- Barasentosa Lestari - Indonesia
- Australian Coal Association
- GVK Power & Infra Limited - India
- Thai Mozambique Logistica
- ASAPP Information Group - India
- Trasteel International SA, Italy
- Salva Resources Pvt Ltd - India
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Indonesian Coal Mining Association
- Vedanta Resources Plc - India
- Marubeni Corporation - India
- Gujarat Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Bangladesh Power Developement Board
- South Luzon Thermal Energy Corporation
- Power Finance Corporation Ltd., India
- Leighton Contractors Pty Ltd - Australia
- Parry Sugars Refinery, India
- Kideco Jaya Agung - Indonesia
- Bhushan Steel Limited - India
- Semirara Mining Corp, Philippines
- VISA Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Central Electricity Authority - India
- Global Green Power PLC Corporation, Philippines
- Interocean Group of Companies - India
- The Treasury - Australian Government
- Bukit Baiduri Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Romanian Commodities Exchange
- Attock Cement Pakistan Limited
- Ministry of Mines - Canada
- SMG Consultants - Indonesia
- Chettinad Cement Corporation Ltd - India
- Medco Energi Mining Internasional
- International Coal Ventures Pvt Ltd - India
- Energy Development Corp, Philippines
- Rio Tinto Coal - Australia
- Asmin Koalindo Tuhup - Indonesia
- Toyota Tsusho Corporation, Japan
- Tamil Nadu electricity Board
- Bulk Trading Sa - Switzerland
- Orica Mining Services - Indonesia
- Africa Commodities Group - South Africa
- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Ministry of Finance - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Jaiprakash Power Ventures ltd
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