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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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Sunday, 08 January 12
THARPAK CONSORTIUM FORMED TO DEVELOP MEGA ENERGY COMPLEX IN SINDH PROVINCE, PAKISTAN
Press Release: On January 5th, TharPak, LLC met with officials of the Embassy of Pakistan in Washington DC to introduce and announce the formation o ...
Saturday, 07 January 12
COAL MARKETS SEE FALLING SPOT PRICES
COALspot.com – World’s thermal coal spot prices have slipped this week..
globalCOAL index in Newcastle Port, benchmark for Asian mark ...
Friday, 06 January 12
COAL INDIA LINKED COAL PRICES WITH INTERNATIONAL COAL PRICES
COALspot.com - Consumers of indigenous coal in India to pay International prices in the future. Coal India has recently moved from UHV pricing mecha ...
Friday, 06 January 12
CLARIDEN GLOBAL BRINGS YOU INDONESIA MINING 2012
Capitalizing Business & Investment Opportunities in an Uncertain Market.Press Release - Clariden Global brings you Indonesia Mining 2012, the dedi ...
Friday, 06 January 12
THE PANAMAX MARKET EXPERIENCED A SLOW START TO 2012 - FEARNLEYS AS
Handy
As usual after a holiday owners and charterers both try to get a feel of the market. An Armada of Supras were talking to ballast towards USG, ...
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- TeaM Sual Corporation - Philippines
- Mjunction Services Limited - India
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Eastern Coal Council - USA
- Sinarmas Energy and Mining - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- Global Business Power Corporation, Philippines
- Baramulti Group, Indonesia
- Borneo Indobara - Indonesia
- Indian Energy Exchange, India
- Binh Thuan Hamico - Vietnam
- Therma Luzon, Inc, Philippines
- Thai Mozambique Logistica
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
- OPG Power Generation Pvt Ltd - India
- Romanian Commodities Exchange
- Trasteel International SA, Italy
- Altura Mining Limited, Indonesia
- Carbofer General Trading SA - India
- Bangladesh Power Developement Board
- Eastern Energy - Thailand
- Mintek Dendrill Indonesia
- New Zealand Coal & Carbon
- San Jose City I Power Corp, Philippines
- Bharathi Cement Corporation - India
- GVK Power & Infra Limited - India
- Samtan Co., Ltd - South Korea
- Toyota Tsusho Corporation, Japan
- Port Waratah Coal Services - Australia
- Medco Energi Mining Internasional
- Heidelberg Cement - Germany
- Vizag Seaport Private Limited - India
- Singapore Mercantile Exchange
- Orica Australia Pty. Ltd.
- Bhatia International Limited - India
- Bhushan Steel Limited - India
- Mercator Lines Limited - India
- Energy Link Ltd, New Zealand
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- MS Steel International - UAE
- IHS Mccloskey Coal Group - USA
- Straits Asia Resources Limited - Singapore
- Chettinad Cement Corporation Ltd - India
- International Coal Ventures Pvt Ltd - India
- Electricity Authority, New Zealand
- Simpson Spence & Young - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Posco Energy - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Formosa Plastics Group - Taiwan
- Antam Resourcindo - Indonesia
- European Bulk Services B.V. - Netherlands
- Gujarat Sidhee Cement - India
- Bukit Makmur.PT - Indonesia
- The University of Queensland
- Dalmia Cement Bharat India
- Asmin Koalindo Tuhup - Indonesia
- Parry Sugars Refinery, India
- Banpu Public Company Limited - Thailand
- Indogreen Group - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Merrill Lynch Commodities Europe
- Petron Corporation, Philippines
- Australian Commodity Traders Exchange
- IEA Clean Coal Centre - UK
- Krishnapatnam Port Company Ltd. - India
- Indonesian Coal Mining Association
- Gujarat Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Kaltim Prima Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Indika Energy - Indonesia
- Anglo American - United Kingdom
- Marubeni Corporation - India
- Electricity Generating Authority of Thailand
- Barasentosa Lestari - Indonesia
- Sakthi Sugars Limited - India
- Metalloyd Limited - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- Star Paper Mills Limited - India
- White Energy Company Limited
- Ambuja Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Siam City Cement PLC, Thailand
- Kobexindo Tractors - Indoneisa
- Interocean Group of Companies - India
- Intertek Mineral Services - Indonesia
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Cement Manufacturers Association - India
- Sree Jayajothi Cements Limited - India
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- India Bulls Power Limited - India
- CIMB Investment Bank - Malaysia
- Siam City Cement - Thailand
- Xindia Steels Limited - India
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Minerals Council of Australia
- Malabar Cements Ltd - India
- Chamber of Mines of South Africa
- Lanco Infratech Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sojitz Corporation - Japan
- Holcim Trading Pte Ltd - Singapore
- Karaikal Port Pvt Ltd - India
- Orica Mining Services - Indonesia
- London Commodity Brokers - England
- Edison Trading Spa - Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Sical Logistics Limited - India
- Power Finance Corporation Ltd., India
- Ceylon Electricity Board - Sri Lanka
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Mines - Canada
- Directorate General of MIneral and Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Australian Coal Association
- Kartika Selabumi Mining - Indonesia
- Central Java Power - Indonesia
- LBH Netherlands Bv - Netherlands
- Standard Chartered Bank - UAE
- Directorate Of Revenue Intelligence - India
- Mercuria Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Central Electricity Authority - India
- Semirara Mining Corp, Philippines
- Essar Steel Hazira Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Coastal Gujarat Power Limited - India
- Bulk Trading Sa - Switzerland
- Global Green Power PLC Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- AsiaOL BioFuels Corp., Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Independent Power Producers Association of India
- CNBM International Corporation - China
- Africa Commodities Group - South Africa
- Ind-Barath Power Infra Limited - India
- Indian Oil Corporation Limited
- Vedanta Resources Plc - India
- Bukit Baiduri Energy - Indonesia
- SMG Consultants - Indonesia
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- VISA Power Limited - India
- Latin American Coal - Colombia
- Iligan Light & Power Inc, Philippines
- Deloitte Consulting - India
- Kideco Jaya Agung - Indonesia
- GMR Energy Limited - India
- Global Coal Blending Company Limited - Australia
- Meralco Power Generation, Philippines
- PTC India Limited - India
- PowerSource Philippines DevCo
- Aditya Birla Group - India
- Tamil Nadu electricity Board
- Indo Tambangraya Megah - Indonesia
- Videocon Industries ltd - India
- Coal and Oil Company - UAE
- Maharashtra Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Thiess Contractors Indonesia
- Energy Development Corp, Philippines
- Commonwealth Bank - Australia
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
- Oldendorff Carriers - Singapore
- Miang Besar Coal Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Jaiprakash Power Ventures ltd
- Uttam Galva Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- SMC Global Power, Philippines
- Cigading International Bulk Terminal - Indonesia
- Attock Cement Pakistan Limited
- Makarim & Taira - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- South Luzon Thermal Energy Corporation
- GN Power Mariveles Coal Plant, Philippines
- Planning Commission, India
- Vijayanagar Sugar Pvt Ltd - India
- Economic Council, Georgia
- Renaissance Capital - South Africa
- Salva Resources Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Timah Investasi Mineral - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Riau Bara Harum - Indonesia
- ASAPP Information Group - India
- Madhucon Powers Ltd - India
- Wilmar Investment Holdings
- The State Trading Corporation of India Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Tata Chemicals Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rio Tinto Coal - Australia
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
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