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