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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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Monday, 28 January 13
BAYAN RESOURCES TO SELL 18 MILLION TONS OF COAL TO GNPOWER MARIVELES COAL PLANT
Publicly-listed PT Bayan Resources announced on Friday that it had signed an agreement on coal sales with Philippine-based GNPower Mariveles Coal Pl ...
Sunday, 27 January 13
CFR SOUTH CHINA COAL SWAPS: WEAK
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q1’ 2013 delivery has gained 0.31 percent and CFR South China coal shipment&nbs ...
Sunday, 27 January 13
FREIGHT MARKET: FLAT TO SOFT - VISTAAR
COALspot.com - The freight market was soft and all the indices were down except for handy size.
The BDI was down 4.66 pct closing at 798 points.. ...
Friday, 25 January 13
BOTSWANA GOVERNMENT GRANTS COAL LICENSES TO A-CAP RESOURCES LIMITED
A-Cap Resources Limited has announced that it has been granted coal rights within its Bolau tenements which sit next to the Sese Coal and Power Proj ...
Friday, 25 January 13
SMALL ROOM FOR OPTIMISM FOR THE PROSPECTS OF THE DRY BULK MARKET AS NET FLEET GROWTH IS SLOWING DOWN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite the fact that the dry bulk market didn't manage to post a rebound during the past year, quite the opposite, as a fast fleet growth and slow ...
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- Alfred C Toepfer International GmbH - Germany
- Bhoruka Overseas - Indonesia
- Indogreen Group - Indonesia
- Meenaskhi Energy Private Limited - India
- Vizag Seaport Private Limited - India
- Mercator Lines Limited - India
- Standard Chartered Bank - UAE
- White Energy Company Limited
- Sarangani Energy Corporation, Philippines
- Bhatia International Limited - India
- Samtan Co., Ltd - South Korea
- Directorate Of Revenue Intelligence - India
- Globalindo Alam Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Mines - Canada
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PTC India Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CNBM International Corporation - China
- IEA Clean Coal Centre - UK
- Marubeni Corporation - India
- Simpson Spence & Young - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Africa Commodities Group - South Africa
- Tata Chemicals Ltd - India
- CIMB Investment Bank - Malaysia
- Kumho Petrochemical, South Korea
- Sindya Power Generating Company Private Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining Corp, Philippines
- Chamber of Mines of South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- Tamil Nadu electricity Board
- Ministry of Finance - Indonesia
- India Bulls Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- The Treasury - Australian Government
- Independent Power Producers Association of India
- Maharashtra Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- MS Steel International - UAE
- Eastern Coal Council - USA
- Australian Commodity Traders Exchange
- Siam City Cement PLC, Thailand
- Oldendorff Carriers - Singapore
- Intertek Mineral Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bulk Trading Sa - Switzerland
- Coastal Gujarat Power Limited - India
- Romanian Commodities Exchange
- Binh Thuan Hamico - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Medco Energi Mining Internasional
- Global Green Power PLC Corporation, Philippines
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Pendopo Energi Batubara - Indonesia
- Larsen & Toubro Limited - India
- Therma Luzon, Inc, Philippines
- PowerSource Philippines DevCo
- Sojitz Corporation - Japan
- Attock Cement Pakistan Limited
- SN Aboitiz Power Inc, Philippines
- Vedanta Resources Plc - India
- OPG Power Generation Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Anglo American - United Kingdom
- London Commodity Brokers - England
- Bangladesh Power Developement Board
- Antam Resourcindo - Indonesia
- Riau Bara Harum - Indonesia
- Coal and Oil Company - UAE
- Petron Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- Central Java Power - Indonesia
- Grasim Industreis Ltd - India
- Mjunction Services Limited - India
- Makarim & Taira - Indonesia
- Manunggal Multi Energi - Indonesia
- Formosa Plastics Group - Taiwan
- GMR Energy Limited - India
- PNOC Exploration Corporation - Philippines
- Trasteel International SA, Italy
- Jaiprakash Power Ventures ltd
- Wilmar Investment Holdings
- ICICI Bank Limited - India
- Energy Development Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- Australian Coal Association
- Jindal Steel & Power Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Power Finance Corporation Ltd., India
- Indian Oil Corporation Limited
- South Luzon Thermal Energy Corporation
- Indian Energy Exchange, India
- Salva Resources Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Malabar Cements Ltd - India
- ASAPP Information Group - India
- SMG Consultants - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Gujarat Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Central Electricity Authority - India
- Cement Manufacturers Association - India
- Georgia Ports Authority, United States
- Timah Investasi Mineral - Indoneisa
- Uttam Galva Steels Limited - India
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Renaissance Capital - South Africa
- San Jose City I Power Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Agrawal Coal Company - India
- Toyota Tsusho Corporation, Japan
- Petrochimia International Co. Ltd.- Taiwan
- PetroVietnam Power Coal Import and Supply Company
- European Bulk Services B.V. - Netherlands
- Aditya Birla Group - India
- Minerals Council of Australia
- Iligan Light & Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Gujarat Sidhee Cement - India
- Borneo Indobara - Indonesia
- Baramulti Group, Indonesia
- Goldman Sachs - Singapore
- Sinarmas Energy and Mining - Indonesia
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- Parry Sugars Refinery, India
- Bukit Baiduri Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Straits Asia Resources Limited - Singapore
- Interocean Group of Companies - India
- Indika Energy - Indonesia
- Bharathi Cement Corporation - India
- Economic Council, Georgia
- Directorate General of MIneral and Coal - Indonesia
- SMC Global Power, Philippines
- Sakthi Sugars Limited - India
- Electricity Generating Authority of Thailand
- Indonesian Coal Mining Association
- The State Trading Corporation of India Ltd
- Global Business Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Mintek Dendrill Indonesia
- Global Coal Blending Company Limited - Australia
- Dalmia Cement Bharat India
- Aboitiz Power Corporation - Philippines
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- Altura Mining Limited, Indonesia
- VISA Power Limited - India
- Essar Steel Hazira Ltd - India
- Meralco Power Generation, Philippines
- Parliament of New Zealand
- Ambuja Cements Ltd - India
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Posco Energy - South Korea
- Port Waratah Coal Services - Australia
- Ceylon Electricity Board - Sri Lanka
- IHS Mccloskey Coal Group - USA
- Kaltim Prima Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Planning Commission, India
- Miang Besar Coal Terminal - Indonesia
- Singapore Mercantile Exchange
- LBH Netherlands Bv - Netherlands
- Eastern Energy - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- New Zealand Coal & Carbon
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Transport, Egypt
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- GAC Shipping (India) Pvt Ltd
- Kepco SPC Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- The University of Queensland
- Madhucon Powers Ltd - India
- Ind-Barath Power Infra Limited - India
- Bhushan Steel Limited - India
- Energy Link Ltd, New Zealand
- Deloitte Consulting - India
- Electricity Authority, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- Siam City Cement - Thailand
- Videocon Industries ltd - India
- TeaM Sual Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Orica Australia Pty. Ltd.
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- Sical Logistics Limited - India
- McConnell Dowell - Australia
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