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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, 07 August 13
HANDIES : FINDING IT DIFFICULT TO SUSTAIN THEIR PREVIOUS LEVELS - KONSTANTINOS KONTOMICHIS
Broker's insight
by Konstantinos Kontomichis,
SnP Broker
Entering the most predictable month of the year, as expected the seasonal effects ha ...
Tuesday, 06 August 13
UNLEASHING SHALE GAS POTENTIAL AS A GLOBAL ENERGY GAME CHANGER
In its 4th year running, the Annual Shale Gas Conference will bring leaders from North American shale gas operators, key Asian regulators, multi ...
Tuesday, 06 August 13
GBCE APPOINTS BENJAMIN WILEY AS NEW MANAGING DIRECTOR
COALspot.com : GB Clean Energy Ltd. (GBCE) announced today that Mr. Benjamin Wiley has been appointed as Managing Director.
Mr. Wiley has ...
Tuesday, 06 August 13
AUSTRALIAN NEWCASTLE PORT'S COAL EXPORTS FALL 23.16 PERCENT ON WEEK TO 2.26 MMT
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port fell 15.8 percent week on week to 2.26 million mt for ...
Monday, 05 August 13
PAPERLESS TRADING (ELECTRONIC BILLS OF LADING) - FREQUENTLY ASKED QUESTIONS ("FAQS") - UK P&I CLUB
A number of Members have contacted the Club with queries regarding the use of electronic bills of lading and any potential consequences for P&I ...
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- The State Trading Corporation of India Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Medco Energi Mining Internasional
- Global Green Power PLC Corporation, Philippines
- Parliament of New Zealand
- Global Business Power Corporation, Philippines
- Mercator Lines Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Vizag Seaport Private Limited - India
- Ambuja Cements Ltd - India
- ASAPP Information Group - India
- Riau Bara Harum - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Electricity Authority, New Zealand
- Mercuria Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Malabar Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- Power Finance Corporation Ltd., India
- Pipit Mutiara Jaya. PT, Indonesia
- Jindal Steel & Power Ltd - India
- Chamber of Mines of South Africa
- Agrawal Coal Company - India
- Timah Investasi Mineral - Indoneisa
- Barasentosa Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Uttam Galva Steels Limited - India
- Sical Logistics Limited - India
- Indonesian Coal Mining Association
- GMR Energy Limited - India
- Intertek Mineral Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Baiduri Energy - Indonesia
- Merrill Lynch Commodities Europe
- Singapore Mercantile Exchange
- London Commodity Brokers - England
- Madhucon Powers Ltd - India
- Coastal Gujarat Power Limited - India
- Tata Chemicals Ltd - India
- Savvy Resources Ltd - HongKong
- SMG Consultants - Indonesia
- Global Coal Blending Company Limited - Australia
- Marubeni Corporation - India
- PowerSource Philippines DevCo
- Vijayanagar Sugar Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sarangani Energy Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Indian Oil Corporation Limited
- Bayan Resources Tbk. - Indonesia
- Central Electricity Authority - India
- Pendopo Energi Batubara - Indonesia
- Wilmar Investment Holdings
- Australian Commodity Traders Exchange
- PNOC Exploration Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Asmin Koalindo Tuhup - Indonesia
- The University of Queensland
- Orica Australia Pty. Ltd.
- Antam Resourcindo - Indonesia
- Kartika Selabumi Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- Coal and Oil Company - UAE
- Semirara Mining and Power Corporation, Philippines
- India Bulls Power Limited - India
- Lanco Infratech Ltd - India
- Salva Resources Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Australian Coal Association
- PetroVietnam Power Coal Import and Supply Company
- Mintek Dendrill Indonesia
- CNBM International Corporation - China
- Therma Luzon, Inc, Philippines
- Mjunction Services Limited - India
- Dalmia Cement Bharat India
- IHS Mccloskey Coal Group - USA
- Energy Link Ltd, New Zealand
- Bhushan Steel Limited - India
- Jaiprakash Power Ventures ltd
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Attock Cement Pakistan Limited
- Alfred C Toepfer International GmbH - Germany
- Aboitiz Power Corporation - Philippines
- Sojitz Corporation - Japan
- Banpu Public Company Limited - Thailand
- Bangladesh Power Developement Board
- McConnell Dowell - Australia
- Eastern Energy - Thailand
- Coalindo Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Samtan Co., Ltd - South Korea
- San Jose City I Power Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Africa Commodities Group - South Africa
- Ind-Barath Power Infra Limited - India
- Sindya Power Generating Company Private Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kideco Jaya Agung - Indonesia
- The Treasury - Australian Government
- Simpson Spence & Young - Indonesia
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- Sinarmas Energy and Mining - Indonesia
- Ministry of Transport, Egypt
- Romanian Commodities Exchange
- MS Steel International - UAE
- Energy Development Corp, Philippines
- Commonwealth Bank - Australia
- Tamil Nadu electricity Board
- Economic Council, Georgia
- Larsen & Toubro Limited - India
- Eastern Coal Council - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Planning Commission, India
- Standard Chartered Bank - UAE
- Essar Steel Hazira Ltd - India
- Cigading International Bulk Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bharathi Cement Corporation - India
- Georgia Ports Authority, United States
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- IEA Clean Coal Centre - UK
- Bukit Makmur.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- Wood Mackenzie - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Globalindo Alam Lestari - Indonesia
- VISA Power Limited - India
- Indo Tambangraya Megah - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Holcim Trading Pte Ltd - Singapore
- Carbofer General Trading SA - India
- Oldendorff Carriers - Singapore
- Bhoruka Overseas - Indonesia
- Siam City Cement - Thailand
- International Coal Ventures Pvt Ltd - India
- Renaissance Capital - South Africa
- Interocean Group of Companies - India
- Bhatia International Limited - India
- Directorate Of Revenue Intelligence - India
- Karaikal Port Pvt Ltd - India
- Ministry of Mines - Canada
- New Zealand Coal & Carbon
- Sree Jayajothi Cements Limited - India
- Ministry of Finance - Indonesia
- GVK Power & Infra Limited - India
- Kobexindo Tractors - Indoneisa
- White Energy Company Limited
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Aditya Birla Group - India
- Grasim Industreis Ltd - India
- Independent Power Producers Association of India
- Makarim & Taira - Indonesia
- Star Paper Mills Limited - India
- PTC India Limited - India
- Minerals Council of Australia
- Kumho Petrochemical, South Korea
- South Luzon Thermal Energy Corporation
- Meenaskhi Energy Private Limited - India
- Chettinad Cement Corporation Ltd - India
- CIMB Investment Bank - Malaysia
- Miang Besar Coal Terminal - Indonesia
- Sakthi Sugars Limited - India
- Gujarat Sidhee Cement - India
- Orica Mining Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Posco Energy - South Korea
- Vedanta Resources Plc - India
- Videocon Industries ltd - India
- Bulk Trading Sa - Switzerland
- SMC Global Power, Philippines
- Formosa Plastics Group - Taiwan
- Baramulti Group, Indonesia
- Electricity Generating Authority of Thailand
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- Thai Mozambique Logistica
- ICICI Bank Limited - India
- Deloitte Consulting - India
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Indogreen Group - Indonesia
- Altura Mining Limited, Indonesia
- Xindia Steels Limited - India
- Borneo Indobara - Indonesia
- Iligan Light & Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Petron Corporation, Philippines
- Anglo American - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Rio Tinto Coal - Australia
- Heidelberg Cement - Germany
- Price Waterhouse Coopers - Russia
- Port Waratah Coal Services - Australia
- Trasteel International SA, Italy
- Kapuas Tunggal Persada - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- Goldman Sachs - Singapore
- Central Java Power - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Indika Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Latin American Coal - Colombia
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