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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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Friday, 06 April 12
DRY BULK MARKET SWIFT TO HALT FALL ON RENEWED DEMAND FOR CAPESIZES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk managed to put a stop to the recent falls, which came as a result of a lacklustre demand for smaller vessel sizes. Although this trend ...
Thursday, 05 April 12
COAL EXPORT TAX: MATTER OF CONCERN FOR INDIA - SUNIL K KUMBHAT
COALspot.com - Since the issuance of Indonesian Mining law in 2009, miners have increased their activities in exploring , ex ...
Thursday, 05 April 12
AKR COAL FIRST EXPORT SHIPMENT OF COAL SEABORNE
PT Anugrah Karya Raya (AKR Coal) subsidiary of PT AKR Corporindo Tbk., Indonesia’s leading integrated supply chain solutions provider and larg ...
Thursday, 05 April 12
DRY BULK MARKET STALLS AS TREND IS REVERSED - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has halted its month-long rally, with the BDI (Baltic Dry Index) retreating yesterday for a second consecutive session. Industry ...
Wednesday, 04 April 12
OIL MAY JUMP TO $150PB IF IRAN ATTACKED: EXPERT - KUNA / HELLENIC SHIPPING
Prices of oil will not drop below level of $100 per barrel and may jump to $150 pb in the coming two months, according to the prominent Kuwaiti expe ...
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- Oldendorff Carriers - Singapore
- Directorate Of Revenue Intelligence - India
- Ceylon Electricity Board - Sri Lanka
- Kobexindo Tractors - Indoneisa
- San Jose City I Power Corp, Philippines
- Interocean Group of Companies - India
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
- Orica Mining Services - Indonesia
- Medco Energi Mining Internasional
- Bhushan Steel Limited - India
- Bharathi Cement Corporation - India
- Samtan Co., Ltd - South Korea
- Meenaskhi Energy Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Simpson Spence & Young - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Singapore Mercantile Exchange
- GVK Power & Infra Limited - India
- Essar Steel Hazira Ltd - India
- International Coal Ventures Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate General of MIneral and Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Latin American Coal - Colombia
- Sinarmas Energy and Mining - Indonesia
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- PTC India Limited - India
- Bayan Resources Tbk. - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bulk Trading Sa - Switzerland
- Bangladesh Power Developement Board
- Larsen & Toubro Limited - India
- Rio Tinto Coal - Australia
- MS Steel International - UAE
- Agrawal Coal Company - India
- Attock Cement Pakistan Limited
- Thai Mozambique Logistica
- Sree Jayajothi Cements Limited - India
- Barasentosa Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Marubeni Corporation - India
- Billiton Holdings Pty Ltd - Australia
- SMC Global Power, Philippines
- Aboitiz Power Corporation - Philippines
- Ministry of Transport, Egypt
- Kohat Cement Company Ltd. - Pakistan
- Global Business Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Standard Chartered Bank - UAE
- PowerSource Philippines DevCo
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- White Energy Company Limited
- Indonesian Coal Mining Association
- Parry Sugars Refinery, India
- ASAPP Information Group - India
- Asmin Koalindo Tuhup - Indonesia
- Global Coal Blending Company Limited - Australia
- Economic Council, Georgia
- SN Aboitiz Power Inc, Philippines
- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- India Bulls Power Limited - India
- Siam City Cement - Thailand
- Gujarat Sidhee Cement - India
- Neyveli Lignite Corporation Ltd, - India
- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
- Global Green Power PLC Corporation, Philippines
- Indogreen Group - Indonesia
- Tata Chemicals Ltd - India
- Sakthi Sugars Limited - India
- Leighton Contractors Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- Chamber of Mines of South Africa
- Heidelberg Cement - Germany
- Georgia Ports Authority, United States
- Price Waterhouse Coopers - Russia
- Semirara Mining Corp, Philippines
- Coastal Gujarat Power Limited - India
- Indo Tambangraya Megah - Indonesia
- The University of Queensland
- Mintek Dendrill Indonesia
- Ministry of Finance - Indonesia
- Xindia Steels Limited - India
- Coal and Oil Company - UAE
- Makarim & Taira - Indonesia
- Altura Mining Limited, Indonesia
- Mercuria Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Mjunction Services Limited - India
- Indian Oil Corporation Limited
- Deloitte Consulting - India
- South Luzon Thermal Energy Corporation
- Kalimantan Lumbung Energi - Indonesia
- Merrill Lynch Commodities Europe
- Bukit Asam (Persero) Tbk - Indonesia
- Vedanta Resources Plc - India
- Independent Power Producers Association of India
- GMR Energy Limited - India
- Power Finance Corporation Ltd., India
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Intertek Mineral Services - Indonesia
- ICICI Bank Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- The State Trading Corporation of India Ltd
- Chettinad Cement Corporation Ltd - India
- Madhucon Powers Ltd - India
- Port Waratah Coal Services - Australia
- Binh Thuan Hamico - Vietnam
- Wood Mackenzie - Singapore
- Trasteel International SA, Italy
- Sical Logistics Limited - India
- European Bulk Services B.V. - Netherlands
- Kartika Selabumi Mining - Indonesia
- Parliament of New Zealand
- SMG Consultants - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- TNB Fuel Sdn Bhd - Malaysia
- Energy Link Ltd, New Zealand
- Holcim Trading Pte Ltd - Singapore
- CNBM International Corporation - China
- Timah Investasi Mineral - Indoneisa
- Commonwealth Bank - Australia
- Kapuas Tunggal Persada - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- VISA Power Limited - India
- Metalloyd Limited - United Kingdom
- New Zealand Coal & Carbon
- Kideco Jaya Agung - Indonesia
- Africa Commodities Group - South Africa
- McConnell Dowell - Australia
- Straits Asia Resources Limited - Singapore
- Bukit Makmur.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Central Electricity Authority - India
- Meralco Power Generation, Philippines
- Orica Australia Pty. Ltd.
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IHS Mccloskey Coal Group - USA
- Posco Energy - South Korea
- OPG Power Generation Pvt Ltd - India
- Renaissance Capital - South Africa
- Energy Development Corp, Philippines
- CIMB Investment Bank - Malaysia
- Aditya Birla Group - India
- Planning Commission, India
- Borneo Indobara - Indonesia
- Malabar Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Baramulti Group, Indonesia
- Petron Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Jaiprakash Power Ventures ltd
- Sojitz Corporation - Japan
- Anglo American - United Kingdom
- Videocon Industries ltd - India
- IEA Clean Coal Centre - UK
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- GN Power Mariveles Coal Plant, Philippines
- Eastern Coal Council - USA
- Therma Luzon, Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dalmia Cement Bharat India
- Thiess Contractors Indonesia
- Uttam Galva Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- GAC Shipping (India) Pvt Ltd
- Carbofer General Trading SA - India
- Indika Energy - Indonesia
- Eastern Energy - Thailand
- Bhatia International Limited - India
- Riau Bara Harum - Indonesia
- Savvy Resources Ltd - HongKong
- Star Paper Mills Limited - India
- Tamil Nadu electricity Board
- Coalindo Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- Formosa Plastics Group - Taiwan
- Wilmar Investment Holdings
- London Commodity Brokers - England
- Romanian Commodities Exchange
- Ambuja Cements Ltd - India
- Edison Trading Spa - Italy
- Petrochimia International Co. Ltd.- Taiwan
- Toyota Tsusho Corporation, Japan
- Minerals Council of Australia
- Australian Coal Association
- Manunggal Multi Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Antam Resourcindo - Indonesia
- Vizag Seaport Private Limited - India
- The Treasury - Australian Government
- Lanco Infratech Ltd - India
- Sarangani Energy Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- TeaM Sual Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
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