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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, 10 September 12
TNPL, AN INDIAN PAPER MAKER IS SEEKING FOR 300K MT OF IMPORTED NON-COKING COAL
COALspot.com - Tamil Nadu Newsprint & Papers Ltd. , an Indian paper maker, is seeking 300,000 metric tons ± 5% (In 6 Shipments about 50,0 ...
Monday, 10 September 12
DRY BULK MARKET SLOWLY BUT SURELY REACHING CRITICAL STATUS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The radical consequences of the shifts in dry bulk demand and prices, especially for the most sought after commodity, concerning the industry, i.e. ...
Monday, 10 September 12
ORPHEUS ENERGY SECURES INDONESIAN COAL TRADING LICENSE
COALspot.com - Indonesian coal producer, Orpheus Energy (ASX:OEG) has announced today that the Indonesian Ministry of Energy and Mineral Resources h ...
Monday, 10 September 12
A SNAPSHOT ON THE ECONOMIC AND SHIPPING ENVIRONMENT - GOLDEN DESTINY / HELLENIC SHIPPING
The European Central Bank left its interest rate unchanged at 0.75% focusing on pushing down borrowing costs in troubled economies, Spain and Italy. ...
Sunday, 09 September 12
H213 SUB-BIT FOB INDONESIA COAL SWAPS ARE TRADING HIGHER
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for October 2012 delivery lost 0.14 percent W-O-W on 7 September 2012, Friday closing but gained ...
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- PowerSource Philippines DevCo
- Petrochimia International Co. Ltd.- Taiwan
- European Bulk Services B.V. - Netherlands
- Jaiprakash Power Ventures ltd
- Romanian Commodities Exchange
- Commonwealth Bank - Australia
- Binh Thuan Hamico - Vietnam
- Planning Commission, India
- Malabar Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- IEA Clean Coal Centre - UK
- Mintek Dendrill Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- ICICI Bank Limited - India
- Bhoruka Overseas - Indonesia
- Aboitiz Power Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Lanco Infratech Ltd - India
- Goldman Sachs - Singapore
- Rio Tinto Coal - Australia
- Straits Asia Resources Limited - Singapore
- Indo Tambangraya Megah - Indonesia
- Electricity Generating Authority of Thailand
- The State Trading Corporation of India Ltd
- Kepco SPC Power Corporation, Philippines
- Singapore Mercantile Exchange
- Ambuja Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Aditya Birla Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Baramulti Group, Indonesia
- Dalmia Cement Bharat India
- Pendopo Energi Batubara - Indonesia
- San Jose City I Power Corp, Philippines
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
- Central Electricity Authority - India
- Larsen & Toubro Limited - India
- Bharathi Cement Corporation - India
- Timah Investasi Mineral - Indoneisa
- Metalloyd Limited - United Kingdom
- MS Steel International - UAE
- Vedanta Resources Plc - India
- Parliament of New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Mercator Lines Limited - India
- Independent Power Producers Association of India
- Australian Coal Association
- Cigading International Bulk Terminal - Indonesia
- Mercuria Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Intertek Mineral Services - Indonesia
- Wood Mackenzie - Singapore
- Grasim Industreis Ltd - India
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- Barasentosa Lestari - Indonesia
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- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Tata Chemicals Ltd - India
- Eastern Coal Council - USA
- Antam Resourcindo - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- McConnell Dowell - Australia
- Anglo American - United Kingdom
- Latin American Coal - Colombia
- SN Aboitiz Power Inc, Philippines
- Bhushan Steel Limited - India
- Alfred C Toepfer International GmbH - Germany
- Wilmar Investment Holdings
- Siam City Cement - Thailand
- Formosa Plastics Group - Taiwan
- Xindia Steels Limited - India
- Edison Trading Spa - Italy
- Savvy Resources Ltd - HongKong
- ASAPP Information Group - India
- The Treasury - Australian Government
- Ministry of Mines - Canada
- Indika Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Directorate Of Revenue Intelligence - India
- Coal and Oil Company - UAE
- Orica Mining Services - Indonesia
- Africa Commodities Group - South Africa
- Indian Oil Corporation Limited
- Trasteel International SA, Italy
- LBH Netherlands Bv - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Samtan Co., Ltd - South Korea
- Gujarat Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Kideco Jaya Agung - Indonesia
- Petron Corporation, Philippines
- Energy Link Ltd, New Zealand
- Simpson Spence & Young - Indonesia
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Bulk Trading Sa - Switzerland
- Directorate General of MIneral and Coal - Indonesia
- Merrill Lynch Commodities Europe
- AsiaOL BioFuels Corp., Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sical Logistics Limited - India
- Globalindo Alam Lestari - Indonesia
- Indonesian Coal Mining Association
- Kartika Selabumi Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Parry Sugars Refinery, India
- Siam City Cement PLC, Thailand
- The University of Queensland
- Kohat Cement Company Ltd. - Pakistan
- Manunggal Multi Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- SMC Global Power, Philippines
- Maheswari Brothers Coal Limited - India
- Ceylon Electricity Board - Sri Lanka
- Ministry of Finance - Indonesia
- Port Waratah Coal Services - Australia
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- India Bulls Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Minerals Council of Australia
- Toyota Tsusho Corporation, Japan
- South Luzon Thermal Energy Corporation
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Development Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- New Zealand Coal & Carbon
- Sakthi Sugars Limited - India
- Sojitz Corporation - Japan
- Eastern Energy - Thailand
- Oldendorff Carriers - Singapore
- Uttam Galva Steels Limited - India
- Thai Mozambique Logistica
- Renaissance Capital - South Africa
- Australian Commodity Traders Exchange
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- Agrawal Coal Company - India
- Asmin Koalindo Tuhup - Indonesia
- Power Finance Corporation Ltd., India
- Miang Besar Coal Terminal - Indonesia
- Indogreen Group - Indonesia
- Meralco Power Generation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Posco Energy - South Korea
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Coastal Gujarat Power Limited - India
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- Interocean Group of Companies - India
- Gujarat Sidhee Cement - India
- Mjunction Services Limited - India
- London Commodity Brokers - England
- Carbofer General Trading SA - India
- Standard Chartered Bank - UAE
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- GVK Power & Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- SMG Consultants - Indonesia
- Iligan Light & Power Inc, Philippines
- Electricity Authority, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cement Manufacturers Association - India
- Salva Resources Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- Heidelberg Cement - Germany
- Ministry of Transport, Egypt
- Essar Steel Hazira Ltd - India
- Kumho Petrochemical, South Korea
- Star Paper Mills Limited - India
- Marubeni Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- PTC India Limited - India
- Holcim Trading Pte Ltd - Singapore
- Coalindo Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Krishnapatnam Port Company Ltd. - India
- Attock Cement Pakistan Limited
- Orica Australia Pty. Ltd.
- TeaM Sual Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Georgia Ports Authority, United States
- Bayan Resources Tbk. - Indonesia
- Makarim & Taira - Indonesia
- White Energy Company Limited
- Kapuas Tunggal Persada - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Deloitte Consulting - India
- Economic Council, Georgia
- GMR Energy Limited - India
- Bangladesh Power Developement Board
- Chamber of Mines of South Africa
- Billiton Holdings Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Videocon Industries ltd - India
- Sindya Power Generating Company Private Ltd
- Riau Bara Harum - Indonesia
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