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