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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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Tuesday, 28 January 14
RESOURCE NATIONALISM OR PROTECTIONISM FOR THE MINING AND EXTRACTIVES INDUSTRY - JOHN WHITTAKER & MICHAEL SWANGARD
Resource nationalism or protectionism for the mining and extractives industry as well as soft commodities sector and the oil industry.
‘Res ...
Tuesday, 28 January 14
DRY BULK SHIP OWNERS RETREAT TO OLD 'HABITS', REFUSING TO DEMOLISH OLD VESSELS, THREATENING MARKET RECOVERY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
If one thing is clear as we reflect on the 2013 shipping markets, it's that ship owners took advantage of low prices, in order to acquire newer ton ...
Monday, 27 January 14
MERCATOR SINGAPORE REPORTS 52% INCREASE IN EBITDA FOR Q3 FY 2014 AS COMPARED TO PREVIOUS QUARTER
COALspot.com: Mercator Lines (Singapore) Limited, a leading Indian-owned international dry bulk shipping company that operates a fleet of fourteen d ...
Monday, 27 January 14
13TH CLEAN COAL FORUM 2014
COALspot.com: (Press Release) - Produced by CDMC Events, The 13th Clean Coal Forum 2014 will be held on June 12 &13 2014 in Beijing, China. We a ...
Monday, 27 January 14
Q3 & Q4 API 8 CFR SOUTH CHINA COAL SWAPS CONTINUE TO REMAIN WEAK
COALspot.com: API 8 CFR South China Coal swaps for average Q1 14 delivery lost 4.45 percent month on month and closed at US$ 79.05 per mt as on Frid ...
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- Directorate General of MIneral and Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Chamber of Mines of South Africa
- Aboitiz Power Corporation - Philippines
- Madhucon Powers Ltd - India
- Timah Investasi Mineral - Indoneisa
- Mercuria Energy - Indonesia
- Standard Chartered Bank - UAE
- LBH Netherlands Bv - Netherlands
- The State Trading Corporation of India Ltd
- Central Java Power - Indonesia
- Merrill Lynch Commodities Europe
- Bahari Cakrawala Sebuku - Indonesia
- IHS Mccloskey Coal Group - USA
- PTC India Limited - India
- Energy Link Ltd, New Zealand
- Siam City Cement - Thailand
- Coastal Gujarat Power Limited - India
- Latin American Coal - Colombia
- CIMB Investment Bank - Malaysia
- Indika Energy - Indonesia
- GMR Energy Limited - India
- Eastern Coal Council - USA
- Sojitz Corporation - Japan
- Tamil Nadu electricity Board
- Ministry of Finance - Indonesia
- Larsen & Toubro Limited - India
- PNOC Exploration Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Ministry of Transport, Egypt
- Karaikal Port Pvt Ltd - India
- Parry Sugars Refinery, India
- Electricity Generating Authority of Thailand
- Coal and Oil Company - UAE
- GVK Power & Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Business Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Kartika Selabumi Mining - Indonesia
- SMC Global Power, Philippines
- SMG Consultants - Indonesia
- Vedanta Resources Plc - India
- Xindia Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Jindal Steel & Power Ltd - India
- Lanco Infratech Ltd - India
- Samtan Co., Ltd - South Korea
- Eastern Energy - Thailand
- Miang Besar Coal Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- San Jose City I Power Corp, Philippines
- Ministry of Mines - Canada
- Minerals Council of Australia
- Videocon Industries ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coalindo Energy - Indonesia
- McConnell Dowell - Australia
- Carbofer General Trading SA - India
- Medco Energi Mining Internasional
- Rio Tinto Coal - Australia
- The University of Queensland
- White Energy Company Limited
- Karbindo Abesyapradhi - Indoneisa
- Makarim & Taira - Indonesia
- Aditya Birla Group - India
- Holcim Trading Pte Ltd - Singapore
- Directorate Of Revenue Intelligence - India
- Antam Resourcindo - Indonesia
- Petron Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Posco Energy - South Korea
- Interocean Group of Companies - India
- Kaltim Prima Coal - Indonesia
- Port Waratah Coal Services - Australia
- International Coal Ventures Pvt Ltd - India
- Energy Development Corp, Philippines
- Mercator Lines Limited - India
- Ind-Barath Power Infra Limited - India
- London Commodity Brokers - England
- Cigading International Bulk Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Sical Logistics Limited - India
- Kideco Jaya Agung - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Thiess Contractors Indonesia
- Straits Asia Resources Limited - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement PLC, Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Power Finance Corporation Ltd., India
- Indo Tambangraya Megah - Indonesia
- Grasim Industreis Ltd - India
- Singapore Mercantile Exchange
- Planning Commission, India
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- Binh Thuan Hamico - Vietnam
- Uttam Galva Steels Limited - India
- Altura Mining Limited, Indonesia
- Oldendorff Carriers - Singapore
- Malabar Cements Ltd - India
- Therma Luzon, Inc, Philippines
- Intertek Mineral Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Wilmar Investment Holdings
- Australian Commodity Traders Exchange
- Sindya Power Generating Company Private Ltd
- Pendopo Energi Batubara - Indonesia
- MS Steel International - UAE
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- Central Electricity Authority - India
- Trasteel International SA, Italy
- Rashtriya Ispat Nigam Limited - India
- Indogreen Group - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bulk Trading Sa - Switzerland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- Commonwealth Bank - Australia
- Jaiprakash Power Ventures ltd
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- Neyveli Lignite Corporation Ltd, - India
- GN Power Mariveles Coal Plant, Philippines
- Banpu Public Company Limited - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- Thai Mozambique Logistica
- Gujarat Mineral Development Corp Ltd - India
- VISA Power Limited - India
- Salva Resources Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bangladesh Power Developement Board
- Economic Council, Georgia
- Krishnapatnam Port Company Ltd. - India
- South Luzon Thermal Energy Corporation
- OPG Power Generation Pvt Ltd - India
- Romanian Commodities Exchange
- Deloitte Consulting - India
- Bhatia International Limited - India
- Essar Steel Hazira Ltd - India
- Indian Energy Exchange, India
- Ceylon Electricity Board - Sri Lanka
- Kohat Cement Company Ltd. - Pakistan
- India Bulls Power Limited - India
- The Treasury - Australian Government
- Parliament of New Zealand
- PetroVietnam Power Coal Import and Supply Company
- European Bulk Services B.V. - Netherlands
- PowerSource Philippines DevCo
- Formosa Plastics Group - Taiwan
- Semirara Mining and Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Australian Coal Association
- Riau Bara Harum - Indonesia
- Bhoruka Overseas - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Dalmia Cement Bharat India
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Ambuja Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Electricity Authority, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Kobexindo Tractors - Indoneisa
- New Zealand Coal & Carbon
- ASAPP Information Group - India
- Alfred C Toepfer International GmbH - Germany
- Independent Power Producers Association of India
- Indian Oil Corporation Limited
- Semirara Mining Corp, Philippines
- Sakthi Sugars Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- Simpson Spence & Young - Indonesia
- Borneo Indobara - Indonesia
- Manunggal Multi Energi - Indonesia
- Georgia Ports Authority, United States
- Attock Cement Pakistan Limited
- Wood Mackenzie - Singapore
- Leighton Contractors Pty Ltd - Australia
- Star Paper Mills Limited - India
- Orica Australia Pty. Ltd.
- Bukit Baiduri Energy - Indonesia
- Goldman Sachs - Singapore
- Bharathi Cement Corporation - India
- TeaM Sual Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- ICICI Bank Limited - India
- Agrawal Coal Company - India
- Anglo American - United Kingdom
- Baramulti Group, Indonesia
- Toyota Tsusho Corporation, Japan
- Orica Mining Services - Indonesia
- Cement Manufacturers Association - India
- Barasentosa Lestari - Indonesia
- Africa Commodities Group - South Africa
- Mintek Dendrill Indonesia
- Bayan Resources Tbk. - Indonesia
- Chettinad Cement Corporation Ltd - India
- CNBM International Corporation - China
- Kumho Petrochemical, South Korea
- Mjunction Services Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tata Chemicals Ltd - India
- Indonesian Coal Mining Association
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