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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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Saturday, 23 March 13
WORLD COAL TRADE FIRST PASSES 1 BILLION TONS IN 2012 - VEREIN DER KOHLENIMPORTEURE E.V
Press Release: Hard coal imports to Germany on the previous year's level in spite of regenerative energies. Imports for power plants at an all-time ...
Thursday, 21 March 13
HANDY : RBCT ROUNDS FIXED AT $ 9000 + 300K BB - FEARNRESEARCH
Handy
The Atlantic market remains firm with cargoes seen to support healthy rates as per last week. The USG-Feast was at USD 25k and Black Sea-Feas ...
Wednesday, 20 March 13
NTPC TO IMPORT SEVEN MILLION TONS COAL FOR FOUR MONTHS
COALspot.com : NTPC Limited (formerly National Thermal Power Corporation) is the largest Indian state-owned electric utilities company has awarded&n ...
Tuesday, 19 March 13
CHINA GAS PRICE REFORMS AND APAC GAS PRICING - FITCH STREET VIEW
Fitch Ratings says pricing reform in the Chinese gas sector is unlikely to materially impact gas distributors' margins, and low gas prices in the U ...
Tuesday, 19 March 13
NEWCASTLE COAL EXPORTS FALL BY 4.27 PERCENT ON WEEK
COALspot.com - Newcastle port in Australia has loaded 2,365,561 MT of thermal and coking coal for week ended 0700 hours 18 March 2013, Newcast ...
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- Marubeni Corporation - India
- Meralco Power Generation, Philippines
- Indian Oil Corporation Limited
- Billiton Holdings Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Mercator Lines Limited - India
- Merrill Lynch Commodities Europe
- Dalmia Cement Bharat India
- Minerals Council of Australia
- Ambuja Cements Ltd - India
- GMR Energy Limited - India
- Petron Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asmin Koalindo Tuhup - Indonesia
- Karaikal Port Pvt Ltd - India
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- GVK Power & Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Bukit Baiduri Energy - Indonesia
- Chamber of Mines of South Africa
- PNOC Exploration Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Uttam Galva Steels Limited - India
- ICICI Bank Limited - India
- IHS Mccloskey Coal Group - USA
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
- The Treasury - Australian Government
- Wood Mackenzie - Singapore
- Bhatia International Limited - India
- Eastern Coal Council - USA
- Holcim Trading Pte Ltd - Singapore
- Globalindo Alam Lestari - Indonesia
- Orica Mining Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMC Global Power, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Bukit Asam (Persero) Tbk - Indonesia
- Tamil Nadu electricity Board
- International Coal Ventures Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Thai Mozambique Logistica
- Parry Sugars Refinery, India
- PetroVietnam Power Coal Import and Supply Company
- Energy Development Corp, Philippines
- Antam Resourcindo - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coal and Oil Company - UAE
- India Bulls Power Limited - India
- Indogreen Group - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Sical Logistics Limited - India
- Sarangani Energy Corporation, Philippines
- Port Waratah Coal Services - Australia
- Sinarmas Energy and Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- New Zealand Coal & Carbon
- Baramulti Group, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Energy Link Ltd, New Zealand
- The State Trading Corporation of India Ltd
- Trasteel International SA, Italy
- European Bulk Services B.V. - Netherlands
- Simpson Spence & Young - Indonesia
- Goldman Sachs - Singapore
- Ind-Barath Power Infra Limited - India
- Planning Commission, India
- Ministry of Transport, Egypt
- Romanian Commodities Exchange
- Kumho Petrochemical, South Korea
- Iligan Light & Power Inc, Philippines
- Borneo Indobara - Indonesia
- White Energy Company Limited
- Coastal Gujarat Power Limited - India
- Posco Energy - South Korea
- Pendopo Energi Batubara - Indonesia
- Siam City Cement - Thailand
- Wilmar Investment Holdings
- Toyota Tsusho Corporation, Japan
- Thiess Contractors Indonesia
- Tata Chemicals Ltd - India
- Agrawal Coal Company - India
- Attock Cement Pakistan Limited
- Kideco Jaya Agung - Indonesia
- Kobexindo Tractors - Indoneisa
- Singapore Mercantile Exchange
- ASAPP Information Group - India
- Alfred C Toepfer International GmbH - Germany
- Mercuria Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Georgia Ports Authority, United States
- Sindya Power Generating Company Private Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Parliament of New Zealand
- Kapuas Tunggal Persada - Indonesia
- Jaiprakash Power Ventures ltd
- Vedanta Resources Plc - India
- Rio Tinto Coal - Australia
- Makarim & Taira - Indonesia
- Savvy Resources Ltd - HongKong
- Maharashtra Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Binh Thuan Hamico - Vietnam
- VISA Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Meenaskhi Energy Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- South Luzon Thermal Energy Corporation
- Grasim Industreis Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Samtan Co., Ltd - South Korea
- Electricity Generating Authority of Thailand
- London Commodity Brokers - England
- Australian Coal Association
- Interocean Group of Companies - India
- Independent Power Producers Association of India
- Bukit Makmur.PT - Indonesia
- Standard Chartered Bank - UAE
- Mjunction Services Limited - India
- Economic Council, Georgia
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Anglo American - United Kingdom
- Therma Luzon, Inc, Philippines
- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- Medco Energi Mining Internasional
- OPG Power Generation Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- PTC India Limited - India
- Indian Energy Exchange, India
- McConnell Dowell - Australia
- Rashtriya Ispat Nigam Limited - India
- Bhoruka Overseas - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Banpu Public Company Limited - Thailand
- Lanco Infratech Ltd - India
- Deloitte Consulting - India
- Semirara Mining Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Australian Commodity Traders Exchange
- Aditya Birla Group - India
- Formosa Plastics Group - Taiwan
- SN Aboitiz Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Indo Tambangraya Megah - Indonesia
- Metalloyd Limited - United Kingdom
- Eastern Energy - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Cement Manufacturers Association - India
- Cigading International Bulk Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Bangladesh Power Developement Board
- PowerSource Philippines DevCo
- Central Java Power - Indonesia
- Global Business Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Barasentosa Lestari - Indonesia
- Bharathi Cement Corporation - India
- Star Paper Mills Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Salva Resources Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Oldendorff Carriers - Singapore
- Indonesian Coal Mining Association
- Ministry of Finance - Indonesia
- Latin American Coal - Colombia
- Xindia Steels Limited - India
- Edison Trading Spa - Italy
- Electricity Authority, New Zealand
- The University of Queensland
- SMG Consultants - Indonesia
- Timah Investasi Mineral - Indoneisa
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Riau Bara Harum - Indonesia
- Manunggal Multi Energi - Indonesia
- Indika Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement PLC, Thailand
- Carbofer General Trading SA - India
- Miang Besar Coal Terminal - Indonesia
- Ministry of Mines - Canada
- Kartika Selabumi Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TNB Fuel Sdn Bhd - Malaysia
- San Jose City I Power Corp, Philippines
- Malabar Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Straits Asia Resources Limited - Singapore
- Madhucon Powers Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- Gujarat Sidhee Cement - India
- Mintek Dendrill Indonesia
- MS Steel International - UAE
- AsiaOL BioFuels Corp., Philippines
- Sojitz Corporation - Japan
- Kepco SPC Power Corporation, Philippines
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