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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, 14 March 13
DRY BULK MARKET KEEPS ON RISING MOMENTUM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has maintained its rising momentum, on the back of increased cargo availability. According to yesterday's figures, the industry ...
Thursday, 14 March 13
SHIPPERS AND CARRIERS NEED GREATER COMMUNICATION AND MUTUAL UNDERSTANDING
Press Release – Shippers and shipping lines both need to raise their game if global container supply chains are not to be habitually subject t ...
Wednesday, 13 March 13
NEWBUILDING PRICES EXHIBIT NO FALL IN PAST SIX MONTHS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Despite the fact that oversupply has been the key plague of the shipping markets in recent years and newbuilding ordering activity has receded subst ...
Tuesday, 12 March 13
COAL MINING PRIVATIZATION IN INDIA: MUST - SUNIL K KUMBHAT
COALspot.com - India has the one of the richest coal reserves in the world and the country should have shown significant progress and gained the pos ...
Tuesday, 12 March 13
NEWCASTLE PORT SHIPPED 2.47 MILLION TONS OF COAL W/E 11 MARCH 2013
COALspot.com - Newcastle port in Australia has loaded 2,471,080 MT of thermal and coking coal for week ended 0700 hours 11 March 2013, Newcast ...
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- Heidelberg Cement - Germany
- Energy Development Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Deloitte Consulting - India
- Petrochimia International Co. Ltd.- Taiwan
- London Commodity Brokers - England
- The Treasury - Australian Government
- Aditya Birla Group - India
- ASAPP Information Group - India
- Electricity Generating Authority of Thailand
- Wood Mackenzie - Singapore
- Parry Sugars Refinery, India
- Interocean Group of Companies - India
- Semirara Mining Corp, Philippines
- Energy Link Ltd, New Zealand
- Ind-Barath Power Infra Limited - India
- Manunggal Multi Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- Bulk Trading Sa - Switzerland
- SMC Global Power, Philippines
- Kaltim Prima Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Oldendorff Carriers - Singapore
- Thiess Contractors Indonesia
- Mjunction Services Limited - India
- Jaiprakash Power Ventures ltd
- PTC India Limited - India
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- CIMB Investment Bank - Malaysia
- Coalindo Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- The State Trading Corporation of India Ltd
- Binh Thuan Hamico - Vietnam
- Georgia Ports Authority, United States
- Ministry of Mines - Canada
- GAC Shipping (India) Pvt Ltd
- ICICI Bank Limited - India
- Pendopo Energi Batubara - Indonesia
- Vizag Seaport Private Limited - India
- Ministry of Finance - Indonesia
- Therma Luzon, Inc, Philippines
- Edison Trading Spa - Italy
- Central Java Power - Indonesia
- Baramulti Group, Indonesia
- CNBM International Corporation - China
- Global Green Power PLC Corporation, Philippines
- Indika Energy - Indonesia
- Romanian Commodities Exchange
- South Luzon Thermal Energy Corporation
- Banpu Public Company Limited - Thailand
- McConnell Dowell - Australia
- Iligan Light & Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Renaissance Capital - South Africa
- Barasentosa Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- New Zealand Coal & Carbon
- Bukit Makmur.PT - Indonesia
- Riau Bara Harum - Indonesia
- Bhoruka Overseas - Indonesia
- Vedanta Resources Plc - India
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- Attock Cement Pakistan Limited
- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sarangani Energy Corporation, Philippines
- Sical Logistics Limited - India
- Bhushan Steel Limited - India
- Chettinad Cement Corporation Ltd - India
- Economic Council, Georgia
- Posco Energy - South Korea
- Essar Steel Hazira Ltd - India
- Makarim & Taira - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PowerSource Philippines DevCo
- AsiaOL BioFuels Corp., Philippines
- Bhatia International Limited - India
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- The University of Queensland
- Indian Energy Exchange, India
- Mercator Lines Limited - India
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- Anglo American - United Kingdom
- Jindal Steel & Power Ltd - India
- Star Paper Mills Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Meralco Power Generation, Philippines
- Eastern Energy - Thailand
- Minerals Council of Australia
- Cement Manufacturers Association - India
- TNB Fuel Sdn Bhd - Malaysia
- Krishnapatnam Port Company Ltd. - India
- International Coal Ventures Pvt Ltd - India
- Orica Mining Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Coastal Gujarat Power Limited - India
- Indian Oil Corporation Limited
- Sojitz Corporation - Japan
- Toyota Tsusho Corporation, Japan
- Kumho Petrochemical, South Korea
- Bharathi Cement Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- Maharashtra Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- Agrawal Coal Company - India
- San Jose City I Power Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Africa Commodities Group - South Africa
- Global Business Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Commonwealth Bank - Australia
- Tata Chemicals Ltd - India
- Thai Mozambique Logistica
- Global Coal Blending Company Limited - Australia
- Mercuria Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Bayan Resources Tbk. - Indonesia
- Australian Commodity Traders Exchange
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- Madhucon Powers Ltd - India
- Petron Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Rio Tinto Coal - Australia
- Bukit Baiduri Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Merrill Lynch Commodities Europe
- Port Waratah Coal Services - Australia
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- GMR Energy Limited - India
- Eastern Coal Council - USA
- Malabar Cements Ltd - India
- Trasteel International SA, Italy
- India Bulls Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Wilmar Investment Holdings
- Larsen & Toubro Limited - India
- Kobexindo Tractors - Indoneisa
- Independent Power Producers Association of India
- Gujarat Sidhee Cement - India
- White Energy Company Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Latin American Coal - Colombia
- Straits Asia Resources Limited - Singapore
- Xindia Steels Limited - India
- Sakthi Sugars Limited - India
- MS Steel International - UAE
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Standard Chartered Bank - UAE
- Orica Australia Pty. Ltd.
- Carbofer General Trading SA - India
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- VISA Power Limited - India
- Planning Commission, India
- Price Waterhouse Coopers - Russia
- Intertek Mineral Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Indo Tambangraya Megah - Indonesia
- Karaikal Port Pvt Ltd - India
- Parliament of New Zealand
- Electricity Authority, New Zealand
- OPG Power Generation Pvt Ltd - India
- Tamil Nadu electricity Board
- Kapuas Tunggal Persada - Indonesia
- Lanco Infratech Ltd - India
- Central Electricity Authority - India
- Vijayanagar Sugar Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- SMG Consultants - Indonesia
- Siam City Cement - Thailand
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Australian Coal Association
- Directorate Of Revenue Intelligence - India
- TeaM Sual Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Goldman Sachs - Singapore
- Bangladesh Power Developement Board
- Videocon Industries ltd - India
- Formosa Plastics Group - Taiwan
- Indonesian Coal Mining Association
- Dalmia Cement Bharat India
- Mintek Dendrill Indonesia
- Gujarat Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Simpson Spence & Young - Indonesia
- Borneo Indobara - Indonesia
- Metalloyd Limited - United Kingdom
- Ambuja Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
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