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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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Thursday, 01 August 13
CAPESIZE: THE FLOW OF CARGOES REMAINS RELATIVELY STABLE, AND THE PACIFIC IS LOOKING PROMISING - FEARNLEYS AS
Handy
The Pacific market is still facing low activity, so no wonder that the tonnage list is getting longer. It´s still Ramadan and only a fe ...
Wednesday, 31 July 13
COAL GASIFICATION
IBC’s Coal Gasification conference explores the opportunities for coal gasification investment and development in Asia.
With depleting dome ...
Wednesday, 31 July 13
SUPRAMAX : THE PACIFIC BASIN WAS MOVING ON A POSITIVE PATH - EVA TZIMA
COALspot.com: Cape - Despite holding their ground fairly well early on in the week, Capes in the Atlantic basin gave in to the mounting pressure fro ...
Tuesday, 30 July 13
HARD COAL ON THE WAY TO BECOMING THE WORLD'S MOST IMPORTANT ENERGY SOURCE - VDKI
Press Release : Hard coal continued to be the world’s fastest-growing fossil primary energy source in 2012. It covered about 28% of the world ...
Tuesday, 30 July 13
WIJAYA TRI UTAMA PURCHASES MICROCOAL TECHNOLOGIES' CLEAN COAL UPGRADING FACILITY
- First MCI commercial scale application of proprietary microwave technology to upgrade coal thermal output and reduce pollutants
- MicroCoal to re ...
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- Energy Development Corp, Philippines
- Sakthi Sugars Limited - India
- Krishnapatnam Port Company Ltd. - India
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- Ministry of Transport, Egypt
- Salva Resources Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- Kapuas Tunggal Persada - Indonesia
- Coal and Oil Company - UAE
- Bhushan Steel Limited - India
- PowerSource Philippines DevCo
- AsiaOL BioFuels Corp., Philippines
- ICICI Bank Limited - India
- Standard Chartered Bank - UAE
- PTC India Limited - India
- Planning Commission, India
- Posco Energy - South Korea
- Kepco SPC Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Port Waratah Coal Services - Australia
- Sical Logistics Limited - India
- Indonesian Coal Mining Association
- Thiess Contractors Indonesia
- Mjunction Services Limited - India
- Chamber of Mines of South Africa
- Mercator Lines Limited - India
- Carbofer General Trading SA - India
- Electricity Authority, New Zealand
- Directorate Of Revenue Intelligence - India
- Globalindo Alam Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Maheswari Brothers Coal Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Sojitz Corporation - Japan
- Ceylon Electricity Board - Sri Lanka
- Mintek Dendrill Indonesia
- Australian Commodity Traders Exchange
- IEA Clean Coal Centre - UK
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- Ministry of Finance - Indonesia
- Edison Trading Spa - Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asmin Koalindo Tuhup - Indonesia
- Mercuria Energy - Indonesia
- Ministry of Mines - Canada
- Georgia Ports Authority, United States
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Indogreen Group - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Xindia Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Central Java Power - Indonesia
- Meenaskhi Energy Private Limited - India
- Intertek Mineral Services - Indonesia
- Cement Manufacturers Association - India
- White Energy Company Limited
- Larsen & Toubro Limited - India
- Malabar Cements Ltd - India
- Parliament of New Zealand
- London Commodity Brokers - England
- GVK Power & Infra Limited - India
- Romanian Commodities Exchange
- Cigading International Bulk Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Indian Oil Corporation Limited
- VISA Power Limited - India
- Economic Council, Georgia
- Gujarat Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- OPG Power Generation Pvt Ltd - India
- Siam City Cement - Thailand
- Timah Investasi Mineral - Indoneisa
- Bulk Trading Sa - Switzerland
- Directorate General of MIneral and Coal - Indonesia
- Minerals Council of Australia
- Metalloyd Limited - United Kingdom
- Borneo Indobara - Indonesia
- Ambuja Cements Ltd - India
- Goldman Sachs - Singapore
- Heidelberg Cement - Germany
- Global Coal Blending Company Limited - Australia
- Agrawal Coal Company - India
- Miang Besar Coal Terminal - Indonesia
- Orica Mining Services - Indonesia
- GMR Energy Limited - India
- Pendopo Energi Batubara - Indonesia
- Simpson Spence & Young - Indonesia
- Kumho Petrochemical, South Korea
- Formosa Plastics Group - Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- Indika Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Medco Energi Mining Internasional
- ASAPP Information Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Price Waterhouse Coopers - Russia
- Semirara Mining and Power Corporation, Philippines
- Eastern Coal Council - USA
- Karbindo Abesyapradhi - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Petron Corporation, Philippines
- Coalindo Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- The Treasury - Australian Government
- Manunggal Multi Energi - Indonesia
- Eastern Energy - Thailand
- Karaikal Port Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Energy Link Ltd, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Attock Cement Pakistan Limited
- SMC Global Power, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dalmia Cement Bharat India
- Marubeni Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- San Jose City I Power Corp, Philippines
- South Luzon Thermal Energy Corporation
- Kohat Cement Company Ltd. - Pakistan
- Vedanta Resources Plc - India
- Wood Mackenzie - Singapore
- International Coal Ventures Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Merrill Lynch Commodities Europe
- Kobexindo Tractors - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Ind-Barath Power Infra Limited - India
- New Zealand Coal & Carbon
- Latin American Coal - Colombia
- Bangladesh Power Developement Board
- Iligan Light & Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Orica Australia Pty. Ltd.
- European Bulk Services B.V. - Netherlands
- Thai Mozambique Logistica
- Jindal Steel & Power Ltd - India
- PNOC Exploration Corporation - Philippines
- The University of Queensland
- Wilmar Investment Holdings
- GAC Shipping (India) Pvt Ltd
- Bhoruka Overseas - Indonesia
- Riau Bara Harum - Indonesia
- Tamil Nadu electricity Board
- TeaM Sual Corporation - Philippines
- Bharathi Cement Corporation - India
- Coastal Gujarat Power Limited - India
- Electricity Generating Authority of Thailand
- Jaiprakash Power Ventures ltd
- Independent Power Producers Association of India
- CIMB Investment Bank - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Singapore Mercantile Exchange
- Interocean Group of Companies - India
- Renaissance Capital - South Africa
- Australian Coal Association
- Grasim Industreis Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Bhatia International Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Global Business Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- MS Steel International - UAE
- Toyota Tsusho Corporation, Japan
- Lanco Infratech Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Videocon Industries ltd - India
- Indo Tambangraya Megah - Indonesia
- Kartika Selabumi Mining - Indonesia
- Siam City Cement PLC, Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Trasteel International SA, Italy
- Anglo American - United Kingdom
- Aboitiz Power Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Deloitte Consulting - India
- Africa Commodities Group - South Africa
- Savvy Resources Ltd - HongKong
- Parry Sugars Refinery, India
- Chettinad Cement Corporation Ltd - India
- Meralco Power Generation, Philippines
- SMG Consultants - Indonesia
- Essar Steel Hazira Ltd - India
- CNBM International Corporation - China
- Central Electricity Authority - India
- Therma Luzon, Inc, Philippines
- Makarim & Taira - Indonesia
- Star Paper Mills Limited - India
- Madhucon Powers Ltd - India
- India Bulls Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Barasentosa Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Kideco Jaya Agung - Indonesia
- Indian Energy Exchange, India
- Oldendorff Carriers - Singapore
- Aditya Birla Group - India
- Rashtriya Ispat Nigam Limited - India
- Samtan Co., Ltd - South Korea
- Uttam Galva Steels Limited - India
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