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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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- Edison Trading Spa - Italy
- Kumho Petrochemical, South Korea
- CNBM International Corporation - China
- Bangladesh Power Developement Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- OPG Power Generation Pvt Ltd - India
- Attock Cement Pakistan Limited
- Riau Bara Harum - Indonesia
- Dalmia Cement Bharat India
- Interocean Group of Companies - India
- Sical Logistics Limited - India
- IEA Clean Coal Centre - UK
- Ministry of Mines - Canada
- Aboitiz Power Corporation - Philippines
- Vedanta Resources Plc - India
- Chamber of Mines of South Africa
- Meralco Power Generation, Philippines
- SMC Global Power, Philippines
- Rio Tinto Coal - Australia
- Alfred C Toepfer International GmbH - Germany
- Barasentosa Lestari - Indonesia
- Wood Mackenzie - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Australian Coal Association
- Siam City Cement - Thailand
- Indian Energy Exchange, India
- Merrill Lynch Commodities Europe
- Global Coal Blending Company Limited - Australia
- Indogreen Group - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- London Commodity Brokers - England
- Kobexindo Tractors - Indoneisa
- Tamil Nadu electricity Board
- Central Electricity Authority - India
- Posco Energy - South Korea
- Savvy Resources Ltd - HongKong
- Binh Thuan Hamico - Vietnam
- Electricity Generating Authority of Thailand
- Medco Energi Mining Internasional
- Bukit Asam (Persero) Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- New Zealand Coal & Carbon
- Bukit Baiduri Energy - Indonesia
- Wilmar Investment Holdings
- Neyveli Lignite Corporation Ltd, - India
- International Coal Ventures Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- South Luzon Thermal Energy Corporation
- GAC Shipping (India) Pvt Ltd
- Bhushan Steel Limited - India
- Star Paper Mills Limited - India
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bhatia International Limited - India
- Ambuja Cements Ltd - India
- Indian Oil Corporation Limited
- Mjunction Services Limited - India
- Kartika Selabumi Mining - Indonesia
- Siam City Cement PLC, Thailand
- Straits Asia Resources Limited - Singapore
- Sojitz Corporation - Japan
- AsiaOL BioFuels Corp., Philippines
- Thai Mozambique Logistica
- Iligan Light & Power Inc, Philippines
- Orica Mining Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Tata Chemicals Ltd - India
- Madhucon Powers Ltd - India
- Vizag Seaport Private Limited - India
- Minerals Council of Australia
- Renaissance Capital - South Africa
- Sindya Power Generating Company Private Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Mercator Lines Limited - India
- Latin American Coal - Colombia
- Energy Link Ltd, New Zealand
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- Altura Mining Limited, Indonesia
- GMR Energy Limited - India
- Salva Resources Pvt Ltd - India
- Thiess Contractors Indonesia
- Port Waratah Coal Services - Australia
- TeaM Sual Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Commonwealth Bank - Australia
- Georgia Ports Authority, United States
- Singapore Mercantile Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Manunggal Multi Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Grasim Industreis Ltd - India
- Orica Australia Pty. Ltd.
- Baramulti Group, Indonesia
- Carbofer General Trading SA - India
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Ministry of Transport, Egypt
- PNOC Exploration Corporation - Philippines
- Planning Commission, India
- White Energy Company Limited
- Parliament of New Zealand
- The University of Queensland
- PowerSource Philippines DevCo
- Timah Investasi Mineral - Indoneisa
- McConnell Dowell - Australia
- Independent Power Producers Association of India
- The State Trading Corporation of India Ltd
- Pendopo Energi Batubara - Indonesia
- Indonesian Coal Mining Association
- Parry Sugars Refinery, India
- Eastern Energy - Thailand
- Jaiprakash Power Ventures ltd
- Semirara Mining Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Makarim & Taira - Indonesia
- Uttam Galva Steels Limited - India
- Bharathi Cement Corporation - India
- Global Green Power PLC Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- Bhoruka Overseas - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Standard Chartered Bank - UAE
- Eastern Coal Council - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- Price Waterhouse Coopers - Russia
- Directorate General of MIneral and Coal - Indonesia
- Marubeni Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Gujarat Sidhee Cement - India
- Heidelberg Cement - Germany
- Sree Jayajothi Cements Limited - India
- Ministry of Finance - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Chettinad Cement Corporation Ltd - India
- Mintek Dendrill Indonesia
- GVK Power & Infra Limited - India
- Central Java Power - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- LBH Netherlands Bv - Netherlands
- Larsen & Toubro Limited - India
- Sarangani Energy Corporation, Philippines
- Antam Resourcindo - Indonesia
- Australian Commodity Traders Exchange
- Indo Tambangraya Megah - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bayan Resources Tbk. - Indonesia
- Intertek Mineral Services - Indonesia
- Deloitte Consulting - India
- Rashtriya Ispat Nigam Limited - India
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Indika Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Aditya Birla Group - India
- Gujarat Mineral Development Corp Ltd - India
- VISA Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- SN Aboitiz Power Inc, Philippines
- Anglo American - United Kingdom
- ICICI Bank Limited - India
- Goldman Sachs - Singapore
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Trasteel International SA, Italy
- Xindia Steels Limited - India
- Power Finance Corporation Ltd., India
- Kepco SPC Power Corporation, Philippines
- Romanian Commodities Exchange
- Africa Commodities Group - South Africa
- Energy Development Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Metalloyd Limited - United Kingdom
- Oldendorff Carriers - Singapore
- Borneo Indobara - Indonesia
- Sakthi Sugars Limited - India
- Cement Manufacturers Association - India
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- The Treasury - Australian Government
- Economic Council, Georgia
- India Bulls Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bukit Makmur.PT - Indonesia
- Coal and Oil Company - UAE
- Simpson Spence & Young - Indonesia
- CIMB Investment Bank - Malaysia
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- Kideco Jaya Agung - Indonesia
- Lanco Infratech Ltd - India
- Karaikal Port Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Agrawal Coal Company - India
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