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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, 01 January 14
COAL & OIL TO SET UP ANOTHER 1,600 MW POWER PLANT IN INDIA - VENKATARAMANI
COALspot.com: Dubai-based Coal & Oil (C&O) Group is planning to make additional investment of around US$ 1.61 billion to set up 1,600 mega w ...
Wednesday, 01 January 14
DRY BULK CARRIER OWNERS ANTICIPATING AN EVEN STRONGER 2014 YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
To begin with, The Hellenic Shipping News Worldwide team would like to wish you all a Happy and Prosperous 2014! We begin the New Year with our firs ...
Tuesday, 31 December 13
INDONESIA'S COAL PRODUCTION COULD HIT 450 MMT IN 2014 - ICMA
COALspot.com: Indonesia, the fourth largest coal producer and largest coal exporter in the world, to increase coal output in year 2014 instead of th ...
Tuesday, 31 December 13
U.S. COAL PRODUCTION INCREASED WEEK ON WEEK, EIA SAYS
COALspot.com – United States the world’s second largest coal producer, produced approximately 19.5 million short tons (mmst) of coal in ...
Tuesday, 31 December 13
MORE THAN $21 BILLION INVESTED IN SECOND HAND SHIP PURCHASES IN 2013
One thing that was apparent in the sale and purchasing markets during 2013 was the ship owners' larger appetite for vessel acquisitions, as most so ...
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- Edison Trading Spa - Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Makarim & Taira - Indonesia
- IEA Clean Coal Centre - UK
- Interocean Group of Companies - India
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- Australian Coal Association
- Independent Power Producers Association of India
- Trasteel International SA, Italy
- Medco Energi Mining Internasional
- Indika Energy - Indonesia
- Cement Manufacturers Association - India
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- Malabar Cements Ltd - India
- Mercator Lines Limited - India
- Sical Logistics Limited - India
- India Bulls Power Limited - India
- Bharathi Cement Corporation - India
- VISA Power Limited - India
- Ministry of Finance - Indonesia
- Indian Energy Exchange, India
- Sree Jayajothi Cements Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ambuja Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- OPG Power Generation Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- Electricity Generating Authority of Thailand
- PNOC Exploration Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Lanco Infratech Ltd - India
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- Barasentosa Lestari - Indonesia
- Attock Cement Pakistan Limited
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Simpson Spence & Young - Indonesia
- Indogreen Group - Indonesia
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- Kartika Selabumi Mining - Indonesia
- Central Java Power - Indonesia
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- The State Trading Corporation of India Ltd
- Sakthi Sugars Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Karaikal Port Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Romanian Commodities Exchange
- Mercuria Energy - Indonesia
- Eastern Energy - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Anglo American - United Kingdom
- Antam Resourcindo - Indonesia
- Toyota Tsusho Corporation, Japan
- Sarangani Energy Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Australian Commodity Traders Exchange
- Coal and Oil Company - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- London Commodity Brokers - England
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- Oldendorff Carriers - Singapore
- Minerals Council of Australia
- Gujarat Mineral Development Corp Ltd - India
- CIMB Investment Bank - Malaysia
- Coastal Gujarat Power Limited - India
- Directorate Of Revenue Intelligence - India
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- ASAPP Information Group - India
- Coalindo Energy - Indonesia
- PowerSource Philippines DevCo
- Planning Commission, India
- Carbofer General Trading SA - India
- Standard Chartered Bank - UAE
- Economic Council, Georgia
- Holcim Trading Pte Ltd - Singapore
- Bukit Baiduri Energy - Indonesia
- Singapore Mercantile Exchange
- Agrawal Coal Company - India
- Goldman Sachs - Singapore
- Madhucon Powers Ltd - India
- Latin American Coal - Colombia
- Aditya Birla Group - India
- Eastern Coal Council - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Heidelberg Cement - Germany
- South Luzon Thermal Energy Corporation
- Jorong Barutama Greston.PT - Indonesia
- Wood Mackenzie - Singapore
- Thiess Contractors Indonesia
- Vedanta Resources Plc - India
- Intertek Mineral Services - Indonesia
- Parry Sugars Refinery, India
- Borneo Indobara - Indonesia
- Formosa Plastics Group - Taiwan
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Commonwealth Bank - Australia
- Leighton Contractors Pty Ltd - Australia
- CNBM International Corporation - China
- Mintek Dendrill Indonesia
- Kapuas Tunggal Persada - Indonesia
- Sojitz Corporation - Japan
- Global Business Power Corporation, Philippines
- Mjunction Services Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Thai Mozambique Logistica
- Meenaskhi Energy Private Limited - India
- Wilmar Investment Holdings
- Price Waterhouse Coopers - Russia
- Jaiprakash Power Ventures ltd
- Port Waratah Coal Services - Australia
- Georgia Ports Authority, United States
- Orica Mining Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bangladesh Power Developement Board
- Manunggal Multi Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Rio Tinto Coal - Australia
- Indo Tambangraya Megah - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Dalmia Cement Bharat India
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- Pendopo Energi Batubara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Electricity Authority, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- White Energy Company Limited
- Neyveli Lignite Corporation Ltd, - India
- Rashtriya Ispat Nigam Limited - India
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- Global Green Power PLC Corporation, Philippines
- Vizag Seaport Private Limited - India
- Marubeni Corporation - India
- Bukit Makmur.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement - Thailand
- Central Electricity Authority - India
- Semirara Mining and Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Ind-Barath Power Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Xindia Steels Limited - India
- Posco Energy - South Korea
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chamber of Mines of South Africa
- Chettinad Cement Corporation Ltd - India
- Therma Luzon, Inc, Philippines
- MS Steel International - UAE
- Savvy Resources Ltd - HongKong
- LBH Netherlands Bv - Netherlands
- Salva Resources Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- SMG Consultants - Indonesia
- Riau Bara Harum - Indonesia
- Timah Investasi Mineral - Indoneisa
- Ministry of Mines - Canada
- AsiaOL BioFuels Corp., Philippines
- Iligan Light & Power Inc, Philippines
- Indian Oil Corporation Limited
- Larsen & Toubro Limited - India
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- Uttam Galva Steels Limited - India
- Tamil Nadu electricity Board
- Straits Asia Resources Limited - Singapore
- Gujarat Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Deloitte Consulting - India
- Asmin Koalindo Tuhup - Indonesia
- European Bulk Services B.V. - Netherlands
- San Jose City I Power Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Videocon Industries ltd - India
- Grasim Industreis Ltd - India
- SMC Global Power, Philippines
- Sindya Power Generating Company Private Ltd
- Miang Besar Coal Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Sidhee Cement - India
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
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