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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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Saturday, 03 September 11
TNPL TO BUY 240K MT OF NON-COKING COAL
COALspot.com - Tamil Nadu Newsprint and Papers Limited (TNPL), is seeking to procure 240,000 MT +/- 5 percent of non-coking imported coal with ...
Friday, 02 September 11
CAPESIZE DEMAND LIFTS DRY BULK MARKET ONCE AGAIN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In what proves to be the best week of the year for Capesize owners, strong demand has helped propel the dry bulk market to new highs yesterday. The ...
Thursday, 01 September 11
EWP TO BUY 195KT OF VIETNAM COAL
COALspot.com - Korea Midland Power (KOMIPO) has issued an International open bidding for 490kt of sub bituminous coal, according to a bid invitation ...
Thursday, 01 September 11
DRY BULK MARKET TAKES GREAT LEAP FORWARD - NIKOS ROUSSANOGLOU
In what turned out to be a rather hopeful ending of the month, the last day of August saw the dry bulk market’s benchmark, the BDI (Baltic Dry ...
Tuesday, 30 August 11
FAUJI CEMENT CONSUMED MORE THAN 1 MILLION TONS OF LOCAL COAL
Cooper Minerals Inc.based in Vancouver, BC, Canada, is a junior exploration company engaged in the acquisition, exploration and development of miner ...
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- Bhatia International Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Medco Energi Mining Internasional
- Asmin Koalindo Tuhup - Indonesia
- New Zealand Coal & Carbon
- Kobexindo Tractors - Indoneisa
- SMC Global Power, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- Semirara Mining and Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Malabar Cements Ltd - India
- CNBM International Corporation - China
- Kumho Petrochemical, South Korea
- IEA Clean Coal Centre - UK
- Makarim & Taira - Indonesia
- TeaM Sual Corporation - Philippines
- White Energy Company Limited
- Jaiprakash Power Ventures ltd
- Neyveli Lignite Corporation Ltd, - India
- Uttam Galva Steels Limited - India
- Siam City Cement PLC, Thailand
- Ind-Barath Power Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Chamber of Mines of South Africa
- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
- Cigading International Bulk Terminal - Indonesia
- Indonesian Coal Mining Association
- Kideco Jaya Agung - Indonesia
- Meenaskhi Energy Private Limited - India
- Singapore Mercantile Exchange
- Sical Logistics Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement - Thailand
- Miang Besar Coal Terminal - Indonesia
- GMR Energy Limited - India
- Africa Commodities Group - South Africa
- Xindia Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- Salva Resources Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Metalloyd Limited - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Timah Investasi Mineral - Indoneisa
- Bangladesh Power Developement Board
- Tamil Nadu electricity Board
- Parry Sugars Refinery, India
- Kartika Selabumi Mining - Indonesia
- Mjunction Services Limited - India
- Sojitz Corporation - Japan
- Savvy Resources Ltd - HongKong
- Therma Luzon, Inc, Philippines
- Romanian Commodities Exchange
- Australian Commodity Traders Exchange
- Coalindo Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Price Waterhouse Coopers - Russia
- Anglo American - United Kingdom
- Orica Mining Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Borneo Indobara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- Aditya Birla Group - India
- Bhoruka Overseas - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Manunggal Multi Energi - Indonesia
- Port Waratah Coal Services - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Indian Energy Exchange, India
- Bulk Trading Sa - Switzerland
- Renaissance Capital - South Africa
- Posco Energy - South Korea
- India Bulls Power Limited - India
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- PTC India Limited - India
- MS Steel International - UAE
- Kaltim Prima Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Wilmar Investment Holdings
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- South Luzon Thermal Energy Corporation
- Bhushan Steel Limited - India
- Semirara Mining Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Mercator Lines Limited - India
- Petron Corporation, Philippines
- The University of Queensland
- PNOC Exploration Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Larsen & Toubro Limited - India
- Dalmia Cement Bharat India
- Gujarat Mineral Development Corp Ltd - India
- Sakthi Sugars Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Electricity Generating Authority of Thailand
- Cement Manufacturers Association - India
- Attock Cement Pakistan Limited
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- Ministry of Finance - Indonesia
- Madhucon Powers Ltd - India
- Sree Jayajothi Cements Limited - India
- Coastal Gujarat Power Limited - India
- Goldman Sachs - Singapore
- Videocon Industries ltd - India
- Eastern Coal Council - USA
- PowerSource Philippines DevCo
- Indika Energy - Indonesia
- Electricity Authority, New Zealand
- Vedanta Resources Plc - India
- Sinarmas Energy and Mining - Indonesia
- The State Trading Corporation of India Ltd
- San Jose City I Power Corp, Philippines
- Thiess Contractors Indonesia
- Toyota Tsusho Corporation, Japan
- Aboitiz Power Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Commonwealth Bank - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Sindya Power Generating Company Private Ltd
- Thai Mozambique Logistica
- CIMB Investment Bank - Malaysia
- SN Aboitiz Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Chettinad Cement Corporation Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Central Electricity Authority - India
- London Commodity Brokers - England
- GVK Power & Infra Limited - India
- Deloitte Consulting - India
- Standard Chartered Bank - UAE
- Formosa Plastics Group - Taiwan
- Star Paper Mills Limited - India
- Wood Mackenzie - Singapore
- GAC Shipping (India) Pvt Ltd
- LBH Netherlands Bv - Netherlands
- Globalindo Alam Lestari - Indonesia
- ASAPP Information Group - India
- Oldendorff Carriers - Singapore
- Energy Development Corp, Philippines
- Mintek Dendrill Indonesia
- McConnell Dowell - Australia
- Ceylon Electricity Board - Sri Lanka
- Bahari Cakrawala Sebuku - Indonesia
- Pendopo Energi Batubara - Indonesia
- Global Coal Blending Company Limited - Australia
- Bukit Baiduri Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- IHS Mccloskey Coal Group - USA
- Gujarat Sidhee Cement - India
- Trasteel International SA, Italy
- Marubeni Corporation - India
- Kepco SPC Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMG Consultants - Indonesia
- Economic Council, Georgia
- Ambuja Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- Grasim Industreis Ltd - India
- Lanco Infratech Ltd - India
- Altura Mining Limited, Indonesia
- Antam Resourcindo - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jorong Barutama Greston.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Georgia Ports Authority, United States
- Central Java Power - Indonesia
- Minerals Council of Australia
- Rio Tinto Coal - Australia
- Agrawal Coal Company - India
- OPG Power Generation Pvt Ltd - India
- Interocean Group of Companies - India
- Global Business Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Indogreen Group - Indonesia
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Ministry of Transport, Egypt
- Planning Commission, India
- Latin American Coal - Colombia
- Maharashtra Electricity Regulatory Commission - India
- Australian Coal Association
- Ministry of Mines - Canada
- Alfred C Toepfer International GmbH - Germany
- International Coal Ventures Pvt Ltd - India
- Eastern Energy - Thailand
- VISA Power Limited - India
- Intertek Mineral Services - Indonesia
- Parliament of New Zealand
- Meralco Power Generation, Philippines
- The Treasury - Australian Government
- Banpu Public Company Limited - Thailand
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- Bharathi Cement Corporation - India
- Power Finance Corporation Ltd., India
- Riau Bara Harum - Indonesia
- Edison Trading Spa - Italy
- Baramulti Group, Indonesia
- Coal and Oil Company - UAE
- GN Power Mariveles Coal Plant, Philippines
- Vizag Seaport Private Limited - India
- Indian Oil Corporation Limited
- Bukit Makmur.PT - Indonesia
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