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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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Friday, 19 April 13
FIRST QUARTER OF 2013 PROVEN A POSITIVE SURPRISE FOR DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite ominous predictions regarding the negative performance of the dry bulk market during the – traditionally weak anyway – first qua ...
Thursday, 18 April 13
HANDY: STABLE ; PANAMAX: BUSY WEEK - FEARNRESEARCH
Handy
The Atlantic markets remain stable in this week. The USG-Feast was at USD 19k and Black Sea-Feast was at USD 12k. The Pacific market is bit f ...
Thursday, 18 April 13
FEATURE: PREDICTING THE FUTURE - AND THE PAST - BIMCO
It’s not predicting the future that is problematical, it’s the realisation that you have to relive the past again and again when you fai ...
Wednesday, 17 April 13
INDONESIA SHIPPED 80 MILLION TONS OF COAL IN FIRST QUARTER - COAL DIRECTOR
COALspot.com - Indonesia has exported around 80 million tons of coal including power plant coal in first three months of this year.
Speaking on t ...
Tuesday, 16 April 13
AUSTRALIAN NEWCASTLE PORT'S COAL EXPORTS JUMPED 20.87 PER CENT ON WEEK TO 3.07 MMT
COALspot.com - Newcastle port in Australia has loaded 3,077,431 tons of thermal and coking coal for week ended 0700 hours 15 April 2013, Newca ...
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- Attock Cement Pakistan Limited
- Sree Jayajothi Cements Limited - India
- Ministry of Transport, Egypt
- Videocon Industries ltd - India
- Dalmia Cement Bharat India
- Iligan Light & Power Inc, Philippines
- Economic Council, Georgia
- Mjunction Services Limited - India
- LBH Netherlands Bv - Netherlands
- MS Steel International - UAE
- Medco Energi Mining Internasional
- Kalimantan Lumbung Energi - Indonesia
- Anglo American - United Kingdom
- Trasteel International SA, Italy
- Savvy Resources Ltd - HongKong
- Merrill Lynch Commodities Europe
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kohat Cement Company Ltd. - Pakistan
- Barasentosa Lestari - Indonesia
- Carbofer General Trading SA - India
- GN Power Mariveles Coal Plant, Philippines
- The University of Queensland
- Miang Besar Coal Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Commonwealth Bank - Australia
- PetroVietnam Power Coal Import and Supply Company
- New Zealand Coal & Carbon
- Maheswari Brothers Coal Limited - India
- Cigading International Bulk Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- The State Trading Corporation of India Ltd
- Antam Resourcindo - Indonesia
- Ministry of Finance - Indonesia
- European Bulk Services B.V. - Netherlands
- Gujarat Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Ind-Barath Power Infra Limited - India
- Intertek Mineral Services - Indonesia
- SMC Global Power, Philippines
- Krishnapatnam Port Company Ltd. - India
- Borneo Indobara - Indonesia
- Coal and Oil Company - UAE
- Metalloyd Limited - United Kingdom
- Binh Thuan Hamico - Vietnam
- Kepco SPC Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Samtan Co., Ltd - South Korea
- Ministry of Mines - Canada
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- ICICI Bank Limited - India
- VISA Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Siam City Cement - Thailand
- ASAPP Information Group - India
- Toyota Tsusho Corporation, Japan
- Maharashtra Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Parliament of New Zealand
- Kobexindo Tractors - Indoneisa
- Global Business Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Electricity Generating Authority of Thailand
- Pendopo Energi Batubara - Indonesia
- Siam City Cement PLC, Thailand
- IEA Clean Coal Centre - UK
- Chamber of Mines of South Africa
- Gujarat Mineral Development Corp Ltd - India
- Grasim Industreis Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Lanco Infratech Ltd - India
- Agrawal Coal Company - India
- Singapore Mercantile Exchange
- Minerals Council of Australia
- White Energy Company Limited
- Renaissance Capital - South Africa
- Marubeni Corporation - India
- Petron Corporation, Philippines
- Electricity Authority, New Zealand
- Bhatia International Limited - India
- TeaM Sual Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Eastern Coal Council - USA
- Bhoruka Overseas - Indonesia
- Wilmar Investment Holdings
- South Luzon Thermal Energy Corporation
- Larsen & Toubro Limited - India
- Interocean Group of Companies - India
- Vizag Seaport Private Limited - India
- Africa Commodities Group - South Africa
- McConnell Dowell - Australia
- Semirara Mining and Power Corporation, Philippines
- India Bulls Power Limited - India
- Mercuria Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Malabar Cements Ltd - India
- Cement Manufacturers Association - India
- Directorate Of Revenue Intelligence - India
- International Coal Ventures Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Planning Commission, India
- Port Waratah Coal Services - Australia
- Bukit Baiduri Energy - Indonesia
- Romanian Commodities Exchange
- Sinarmas Energy and Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Baramulti Group, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Madhucon Powers Ltd - India
- Banpu Public Company Limited - Thailand
- Star Paper Mills Limited - India
- Ambuja Cements Ltd - India
- Makarim & Taira - Indonesia
- Kideco Jaya Agung - Indonesia
- Australian Coal Association
- Eastern Energy - Thailand
- Central Java Power - Indonesia
- Indian Energy Exchange, India
- Energy Link Ltd, New Zealand
- Indonesian Coal Mining Association
- Jorong Barutama Greston.PT - Indonesia
- Altura Mining Limited, Indonesia
- Central Electricity Authority - India
- Chettinad Cement Corporation Ltd - India
- London Commodity Brokers - England
- Kapuas Tunggal Persada - Indonesia
- Indogreen Group - Indonesia
- PTC India Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Global Coal Blending Company Limited - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Straits Asia Resources Limited - Singapore
- GVK Power & Infra Limited - India
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- OPG Power Generation Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- GMR Energy Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CNBM International Corporation - China
- Bukit Asam (Persero) Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Parry Sugars Refinery, India
- Alfred C Toepfer International GmbH - Germany
- Tamil Nadu electricity Board
- Latin American Coal - Colombia
- Pipit Mutiara Jaya. PT, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Standard Chartered Bank - UAE
- Gujarat Sidhee Cement - India
- Mercator Lines Limited - India
- Indian Oil Corporation Limited
- Salva Resources Pvt Ltd - India
- Thiess Contractors Indonesia
- Jaiprakash Power Ventures ltd
- Kumho Petrochemical, South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Kaltim Prima Coal - Indonesia
- Sakthi Sugars Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Essar Steel Hazira Ltd - India
- Tata Chemicals Ltd - India
- Rio Tinto Coal - Australia
- Coastal Gujarat Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Power Finance Corporation Ltd., India
- Riau Bara Harum - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meralco Power Generation, Philippines
- Deloitte Consulting - India
- PowerSource Philippines DevCo
- Edison Trading Spa - Italy
- Posco Energy - South Korea
- Goldman Sachs - Singapore
- Orica Australia Pty. Ltd.
- Kartika Selabumi Mining - Indonesia
- Sical Logistics Limited - India
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- Thai Mozambique Logistica
- Uttam Galva Steels Limited - India
- Bangladesh Power Developement Board
- The Treasury - Australian Government
- Jindal Steel & Power Ltd - India
- Bharathi Cement Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Bhushan Steel Limited - India
- Coalindo Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Bahari Cakrawala Sebuku - Indonesia
- SMG Consultants - Indonesia
- Sindya Power Generating Company Private Ltd
- Semirara Mining Corp, Philippines
- Vedanta Resources Plc - India
- CIMB Investment Bank - Malaysia
- Wood Mackenzie - Singapore
- Independent Power Producers Association of India
- AsiaOL BioFuels Corp., Philippines
- Bayan Resources Tbk. - Indonesia
- Aditya Birla Group - India
- Formosa Plastics Group - Taiwan
- Aboitiz Power Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Australian Commodity Traders Exchange
- Globalindo Alam Lestari - Indonesia
- Georgia Ports Authority, United States
- Sarangani Energy Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
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