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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, 09 July 14
PANAMAX MARKET FINALLY CORRECTING UPWARDS; AVERAGE TC MORE THAN DOUBLING WEEK ON WEEK - INTERMODAL
The Dry Bulk market has closed off on Friday on a more positive note, with most segments noting weekly gains and the Panamax market finally correct ...
Wednesday, 09 July 14
SHIPPING MARKET INSIGHT - PANOS TSILINGIRIS
The mini-boom in dry bulker values catapulted ship prices too fast too far over the last one-and-a-half year. The concurrence of historically low p ...
Tuesday, 08 July 14
INDONESIAN COAL PRICE REFERENCE FALL AGAIN IN JULY; LOST 1.62%
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia again revised down the coal bench mark price in July. HBA for month of J ...
Tuesday, 08 July 14
ENERGY IN THE MIX - INTERMODAL SHIPBROKERS
With the Tanker freight market having showed much promise this year compared to the performance that had been noted during the previous five, it is ...
Monday, 07 July 14
INDONESIA STATE-CONTROLLED COAL MINER BUKIT ASAM TO TRADE COAL ON-LINE THROUGH JFX
COALspot.com: Indonesian state owned coal miner PT Tambang Batubara Bukit Asam Tbk (PTBA) has teamed up with Jakarta Futures Exchange (JFX) to sell ...
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- GAC Shipping (India) Pvt Ltd
- Vijayanagar Sugar Pvt Ltd - India
- White Energy Company Limited
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Anglo American - United Kingdom
- Deloitte Consulting - India
- Global Coal Blending Company Limited - Australia
- Bukit Makmur.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Bharathi Cement Corporation - India
- Power Finance Corporation Ltd., India
- SMG Consultants - Indonesia
- International Coal Ventures Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Interocean Group of Companies - India
- Coastal Gujarat Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SN Aboitiz Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Georgia Ports Authority, United States
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Aboitiz Power Corporation - Philippines
- Bangladesh Power Developement Board
- Kalimantan Lumbung Energi - Indonesia
- Standard Chartered Bank - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Manunggal Multi Energi - Indonesia
- Tamil Nadu electricity Board
- Oldendorff Carriers - Singapore
- Jaiprakash Power Ventures ltd
- European Bulk Services B.V. - Netherlands
- Alfred C Toepfer International GmbH - Germany
- SMC Global Power, Philippines
- Marubeni Corporation - India
- Sarangani Energy Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Meralco Power Generation, Philippines
- Formosa Plastics Group - Taiwan
- ASAPP Information Group - India
- Uttam Galva Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- Medco Energi Mining Internasional
- Mintek Dendrill Indonesia
- Central Electricity Authority - India
- Metalloyd Limited - United Kingdom
- South Luzon Thermal Energy Corporation
- Price Waterhouse Coopers - Russia
- Merrill Lynch Commodities Europe
- Sojitz Corporation - Japan
- PTC India Limited - India
- Orica Australia Pty. Ltd.
- Chettinad Cement Corporation Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Aditya Birla Group - India
- New Zealand Coal & Carbon
- Ministry of Transport, Egypt
- IEA Clean Coal Centre - UK
- Sinarmas Energy and Mining - Indonesia
- Larsen & Toubro Limited - India
- Intertek Mineral Services - Indonesia
- Australian Coal Association
- Sakthi Sugars Limited - India
- Heidelberg Cement - Germany
- Sree Jayajothi Cements Limited - India
- Commonwealth Bank - Australia
- Videocon Industries ltd - India
- Port Waratah Coal Services - Australia
- Indogreen Group - Indonesia
- Wilmar Investment Holdings
- Australian Commodity Traders Exchange
- Madhucon Powers Ltd - India
- Kideco Jaya Agung - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Attock Cement Pakistan Limited
- Vedanta Resources Plc - India
- CIMB Investment Bank - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- Ind-Barath Power Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Grasim Industreis Ltd - India
- Savvy Resources Ltd - HongKong
- Siam City Cement PLC, Thailand
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- Bhatia International Limited - India
- Sical Logistics Limited - India
- Romanian Commodities Exchange
- Jorong Barutama Greston.PT - Indonesia
- Posco Energy - South Korea
- Xindia Steels Limited - India
- India Bulls Power Limited - India
- London Commodity Brokers - England
- TeaM Sual Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Tata Chemicals Ltd - India
- Carbofer General Trading SA - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Indonesian Coal Mining Association
- Mjunction Services Limited - India
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- Indika Energy - Indonesia
- Trasteel International SA, Italy
- Maheswari Brothers Coal Limited - India
- VISA Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Malabar Cements Ltd - India
- Altura Mining Limited, Indonesia
- Minerals Council of Australia
- Vizag Seaport Private Limited - India
- Parliament of New Zealand
- Leighton Contractors Pty Ltd - Australia
- The Treasury - Australian Government
- Economic Council, Georgia
- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Global Business Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Edison Trading Spa - Italy
- Karbindo Abesyapradhi - Indoneisa
- Ambuja Cements Ltd - India
- Goldman Sachs - Singapore
- Agrawal Coal Company - India
- Cigading International Bulk Terminal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Indian Energy Exchange, India
- Coal and Oil Company - UAE
- Simpson Spence & Young - Indonesia
- Bhushan Steel Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Coalindo Energy - Indonesia
- Thiess Contractors Indonesia
- Global Green Power PLC Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Energy Link Ltd, New Zealand
- Binh Thuan Hamico - Vietnam
- Kumho Petrochemical, South Korea
- Mercator Lines Limited - India
- CNBM International Corporation - China
- Latin American Coal - Colombia
- Eastern Coal Council - USA
- OPG Power Generation Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Planning Commission, India
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Singapore Mercantile Exchange
- Eastern Energy - Thailand
- Gujarat Sidhee Cement - India
- Meenaskhi Energy Private Limited - India
- PNOC Exploration Corporation - Philippines
- Makarim & Taira - Indonesia
- Indian Oil Corporation Limited
- Baramulti Group, Indonesia
- The State Trading Corporation of India Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Mining Services - Indonesia
- Lanco Infratech Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Sindya Power Generating Company Private Ltd
- Salva Resources Pvt Ltd - India
- Star Paper Mills Limited - India
- Straits Asia Resources Limited - Singapore
- Ministry of Finance - Indonesia
- Iligan Light & Power Inc, Philippines
- ICICI Bank Limited - India
- Essar Steel Hazira Ltd - India
- Mercuria Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Independent Power Producers Association of India
- The University of Queensland
- Antam Resourcindo - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Electricity Authority, New Zealand
- Chamber of Mines of South Africa
- Cement Manufacturers Association - India
- Directorate Of Revenue Intelligence - India
- McConnell Dowell - Australia
- Renaissance Capital - South Africa
- San Jose City I Power Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Therma Luzon, Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Energy Development Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Parry Sugars Refinery, India
- MS Steel International - UAE
- Thai Mozambique Logistica
- Central Java Power - Indonesia
- Kaltim Prima Coal - Indonesia
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Riau Bara Harum - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Borneo Indobara - Indonesia
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- Samtan Co., Ltd - South Korea
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