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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, 23 July 11
PANAMAX MARKET FACED A LIMITED ACTIVITY IN ALL BASINS
Handy
Atlantic softening across all segments with little fresh enquiry ex Bsea/Cont/USG and ECSA. Trips to Far east remain healthy. More cargoes ex ...
Friday, 22 July 11
MARUBENI ACQUIRING 42.86% SHARE OF YTL JAWA POWER HOLDINGS
COALspot.com - Japan’s Marubeni Corporation acquisition 42.86% stake in YTL Jawa Power Holdings BV, which owns a 35% equity interest in Indone ...
Thursday, 21 July 11
INDIA IMPORTS 36.033 MILLION TONS OF INDONESIAN COAL TILL JUNE
COALspot.com - Indonesia shipped 28.27 Million tons of coal in June 2011, a 2.3 percent lesser than May export of about 28.962 million tons, I ...
Thursday, 21 July 11
COAL PRICES ARE AT US$ 120 A TONNE
COALspot.com - Indonesian coal production in 2011 is expected to reach 360 million tons or 5.8 percent higher than government's forecasts. The incr ...
Thursday, 21 July 11
DRY BULK RATES EDGE FURTHER DOWN ON WEAK MARKET SENTIMENT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market fell once again on Wednesday marking the ninth straight day of losses. The industry’s benchmark, the Baltic Dry Index (BDI ...
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- SN Aboitiz Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- Australian Commodity Traders Exchange
- Indonesian Coal Mining Association
- Sakthi Sugars Limited - India
- Trasteel International SA, Italy
- International Coal Ventures Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- PowerSource Philippines DevCo
- Anglo American - United Kingdom
- Bulk Trading Sa - Switzerland
- Sarangani Energy Corporation, Philippines
- GVK Power & Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Mercator Lines Limited - India
- Siam City Cement PLC, Thailand
- Therma Luzon, Inc, Philippines
- New Zealand Coal & Carbon
- Parliament of New Zealand
- Rio Tinto Coal - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Finance - Indonesia
- Electricity Authority, New Zealand
- Energy Link Ltd, New Zealand
- Global Coal Blending Company Limited - Australia
- Singapore Mercantile Exchange
- CNBM International Corporation - China
- VISA Power Limited - India
- Simpson Spence & Young - Indonesia
- Australian Coal Association
- Larsen & Toubro Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Sidhee Cement - India
- ASAPP Information Group - India
- Bangladesh Power Developement Board
- MS Steel International - UAE
- Power Finance Corporation Ltd., India
- Savvy Resources Ltd - HongKong
- Ind-Barath Power Infra Limited - India
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- India Bulls Power Limited - India
- McConnell Dowell - Australia
- Kaltim Prima Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- White Energy Company Limited
- European Bulk Services B.V. - Netherlands
- Indika Energy - Indonesia
- The State Trading Corporation of India Ltd
- Africa Commodities Group - South Africa
- Toyota Tsusho Corporation, Japan
- Intertek Mineral Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Parry Sugars Refinery, India
- Thai Mozambique Logistica
- Mjunction Services Limited - India
- Bayan Resources Tbk. - Indonesia
- Iligan Light & Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Interocean Group of Companies - India
- Goldman Sachs - Singapore
- Sical Logistics Limited - India
- Marubeni Corporation - India
- Kepco SPC Power Corporation, Philippines
- Central Electricity Authority - India
- Cigading International Bulk Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- PTC India Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhatia International Limited - India
- Energy Development Corp, Philippines
- Merrill Lynch Commodities Europe
- Star Paper Mills Limited - India
- Billiton Holdings Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- Romanian Commodities Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Bhushan Steel Limited - India
- Tata Chemicals Ltd - India
- Wood Mackenzie - Singapore
- Carbofer General Trading SA - India
- Bharathi Cement Corporation - India
- AsiaOL BioFuels Corp., Philippines
- Globalindo Alam Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Indogreen Group - Indonesia
- Tamil Nadu electricity Board
- TeaM Sual Corporation - Philippines
- Lanco Infratech Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- Renaissance Capital - South Africa
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- CIMB Investment Bank - Malaysia
- Semirara Mining Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Semirara Mining and Power Corporation, Philippines
- Ministry of Mines - Canada
- LBH Netherlands Bv - Netherlands
- Jindal Steel & Power Ltd - India
- Bhoruka Overseas - Indonesia
- Madhucon Powers Ltd - India
- Mintek Dendrill Indonesia
- Eastern Coal Council - USA
- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- Coalindo Energy - Indonesia
- Borneo Indobara - Indonesia
- Mercuria Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Baramulti Group, Indonesia
- Binh Thuan Hamico - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Minerals Council of Australia
- Holcim Trading Pte Ltd - Singapore
- Maharashtra Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
- Kideco Jaya Agung - Indonesia
- Banpu Public Company Limited - Thailand
- Bukit Makmur.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- The Treasury - Australian Government
- Petrochimia International Co. Ltd.- Taiwan
- ICICI Bank Limited - India
- Essar Steel Hazira Ltd - India
- Sinarmas Energy and Mining - Indonesia
- SMC Global Power, Philippines
- Medco Energi Mining Internasional
- Attock Cement Pakistan Limited
- Videocon Industries ltd - India
- GAC Shipping (India) Pvt Ltd
- Latin American Coal - Colombia
- Gujarat Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Global Business Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Chettinad Cement Corporation Ltd - India
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
- Chamber of Mines of South Africa
- Price Waterhouse Coopers - Russia
- Port Waratah Coal Services - Australia
- Ministry of Transport, Egypt
- Wilmar Investment Holdings
- Sojitz Corporation - Japan
- Metalloyd Limited - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Riau Bara Harum - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Independent Power Producers Association of India
- Heidelberg Cement - Germany
- South Luzon Thermal Energy Corporation
- Coal and Oil Company - UAE
- Electricity Generating Authority of Thailand
- Siam City Cement - Thailand
- Agrawal Coal Company - India
- Edison Trading Spa - Italy
- Vizag Seaport Private Limited - India
- Uttam Galva Steels Limited - India
- Central Java Power - Indonesia
- Malabar Cements Ltd - India
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- Xindia Steels Limited - India
- Barasentosa Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Sree Jayajothi Cements Limited - India
- Planning Commission, India
- SMG Consultants - Indonesia
- GMR Energy Limited - India
- Formosa Plastics Group - Taiwan
- Sindya Power Generating Company Private Ltd
- OPG Power Generation Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Meenaskhi Energy Private Limited - India
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Standard Chartered Bank - UAE
- GN Power Mariveles Coal Plant, Philippines
- Timah Investasi Mineral - Indoneisa
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- Petron Corporation, Philippines
- Thiess Contractors Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Georgia Ports Authority, United States
- London Commodity Brokers - England
- Bank of Tokyo Mitsubishi UFJ Ltd
- Alfred C Toepfer International GmbH - Germany
- Samtan Co., Ltd - South Korea
- Directorate Of Revenue Intelligence - India
- The University of Queensland
- Vedanta Resources Plc - India
- Economic Council, Georgia
- Straits Asia Resources Limited - Singapore
- Ambuja Cements Ltd - India
- Makarim & Taira - Indonesia
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