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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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Tuesday, 04 December 12
JATENERGY SIGNS MOU FOR INDONESIAN COAL ASSET
COALspot.com - Jatenergy Limited has announced that its fully-owned Indonesian subsidiary, PT Barata Energy (BE), has signed an exclusive, non-bindi ...
Tuesday, 04 December 12
NEWCASTLE PORT SHIPPED 55.88 PERCENT MORE COAL W/E 3 DECEMBER 2012
COALspot.com - Newcastle port in Australia has loaded 2,796,341 MT of thermal and coking coal for week ended 0700 hours 3 December 2012, Newca ...
Sunday, 02 December 12
YEAR 2013, YEAR OF SUPPLY OR DEMAND?
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q1 2013 delivery gained 2.87 & 0.83 percent MoM and WoW respectively ...
Saturday, 01 December 12
TIGHT SUPPLY, DEMAND PUSH INDO-INDIA SUPRAMAX FREIGHT RATES HIGHER - VISTAAR
COALspot.com - The freight market was mixed this week as cape and Panamax indices are closing softer.
The BDI was down 0.37 pct closing at 1,086 ...
Friday, 30 November 12
FUTURE TREND OF SECOND HAND SHIP VALUES PUZZLING SHIP OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
One of the major challenges that ship owners are facing today is whether or not to invest in a second hand vessel at any given time. For instance, i ...
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- Sarangani Energy Corporation, Philippines
- The State Trading Corporation of India Ltd
- Cement Manufacturers Association - India
- Merrill Lynch Commodities Europe
- Samtan Co., Ltd - South Korea
- Makarim & Taira - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- LBH Netherlands Bv - Netherlands
- Wood Mackenzie - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Thiess Contractors Indonesia
- Iligan Light & Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Meralco Power Generation, Philippines
- Indo Tambangraya Megah - Indonesia
- IHS Mccloskey Coal Group - USA
- Goldman Sachs - Singapore
- Bhatia International Limited - India
- Maheswari Brothers Coal Limited - India
- Cigading International Bulk Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Central Java Power - Indonesia
- Global Coal Blending Company Limited - Australia
- Kumho Petrochemical, South Korea
- GN Power Mariveles Coal Plant, Philippines
- Vizag Seaport Private Limited - India
- Petron Corporation, Philippines
- Ministry of Transport, Egypt
- Electricity Authority, New Zealand
- Manunggal Multi Energi - Indonesia
- Latin American Coal - Colombia
- Banpu Public Company Limited - Thailand
- Orica Mining Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kaltim Prima Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Intertek Mineral Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Xindia Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Standard Chartered Bank - UAE
- GVK Power & Infra Limited - India
- Port Waratah Coal Services - Australia
- Sical Logistics Limited - India
- Jaiprakash Power Ventures ltd
- Pendopo Energi Batubara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Mjunction Services Limited - India
- PowerSource Philippines DevCo
- Therma Luzon, Inc, Philippines
- Economic Council, Georgia
- Siam City Cement - Thailand
- White Energy Company Limited
- Indian Energy Exchange, India
- Krishnapatnam Port Company Ltd. - India
- AsiaOL BioFuels Corp., Philippines
- Thai Mozambique Logistica
- Holcim Trading Pte Ltd - Singapore
- Star Paper Mills Limited - India
- Barasentosa Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Leighton Contractors Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Independent Power Producers Association of India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Carbofer General Trading SA - India
- Formosa Plastics Group - Taiwan
- Parry Sugars Refinery, India
- Semirara Mining and Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- London Commodity Brokers - England
- ICICI Bank Limited - India
- International Coal Ventures Pvt Ltd - India
- Coalindo Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bhushan Steel Limited - India
- Wilmar Investment Holdings
- Savvy Resources Ltd - HongKong
- Baramulti Group, Indonesia
- Videocon Industries ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Interocean Group of Companies - India
- Karaikal Port Pvt Ltd - India
- Eastern Coal Council - USA
- Karbindo Abesyapradhi - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Grasim Industreis Ltd - India
- Georgia Ports Authority, United States
- Bangladesh Power Developement Board
- Orica Australia Pty. Ltd.
- Essar Steel Hazira Ltd - India
- Coal and Oil Company - UAE
- Binh Thuan Hamico - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sinarmas Energy and Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- ASAPP Information Group - India
- Aboitiz Power Corporation - Philippines
- Antam Resourcindo - Indonesia
- Indogreen Group - Indonesia
- Siam City Cement PLC, Thailand
- The Treasury - Australian Government
- OPG Power Generation Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
- Electricity Generating Authority of Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Toyota Tsusho Corporation, Japan
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Singapore Mercantile Exchange
- Billiton Holdings Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- Gujarat Sidhee Cement - India
- Sojitz Corporation - Japan
- Metalloyd Limited - United Kingdom
- SMC Global Power, Philippines
- The University of Queensland
- Anglo American - United Kingdom
- Eastern Energy - Thailand
- Ambuja Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- Rio Tinto Coal - Australia
- Trasteel International SA, Italy
- Tata Chemicals Ltd - India
- Oldendorff Carriers - Singapore
- Australian Coal Association
- Maharashtra Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- Africa Commodities Group - South Africa
- Uttam Galva Steels Limited - India
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- Riau Bara Harum - Indonesia
- Heidelberg Cement - Germany
- Romanian Commodities Exchange
- Power Finance Corporation Ltd., India
- Price Waterhouse Coopers - Russia
- MS Steel International - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Mercator Lines Limited - India
- Planning Commission, India
- Marubeni Corporation - India
- Central Electricity Authority - India
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Straits Asia Resources Limited - Singapore
- PNOC Exploration Corporation - Philippines
- GMR Energy Limited - India
- Minerals Council of Australia
- GAC Shipping (India) Pvt Ltd
- Parliament of New Zealand
- Jindal Steel & Power Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Malabar Cements Ltd - India
- Madhucon Powers Ltd - India
- Australian Commodity Traders Exchange
- Kepco SPC Power Corporation, Philippines
- CNBM International Corporation - China
- Lanco Infratech Ltd - India
- Energy Development Corp, Philippines
- New Zealand Coal & Carbon
- Attock Cement Pakistan Limited
- Kartika Selabumi Mining - Indonesia
- Sakthi Sugars Limited - India
- CIMB Investment Bank - Malaysia
- Bulk Trading Sa - Switzerland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercuria Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- SN Aboitiz Power Inc, Philippines
- Edison Trading Spa - Italy
- San Jose City I Power Corp, Philippines
- Bharathi Cement Corporation - India
- Mintek Dendrill Indonesia
- Indian Oil Corporation Limited
- VISA Power Limited - India
- Deloitte Consulting - India
- Tamil Nadu electricity Board
- Semirara Mining Corp, Philippines
- PTC India Limited - India
- Chettinad Cement Corporation Ltd - India
- Sree Jayajothi Cements Limited - India
- SMG Consultants - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kobexindo Tractors - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Medco Energi Mining Internasional
- Renaissance Capital - South Africa
- Bhoruka Overseas - Indonesia
- Alfred C Toepfer International GmbH - Germany
- European Bulk Services B.V. - Netherlands
- Coastal Gujarat Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Aditya Birla Group - India
- Ministry of Mines - Canada
- Ind-Barath Power Infra Limited - India
- Borneo Indobara - Indonesia
- Chamber of Mines of South Africa
- Dalmia Cement Bharat India
- Meenaskhi Energy Private Limited - India
- Indonesian Coal Mining Association
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