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