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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, 08 May 10
THE FUTURES FOR THREE YEARS (2010-2012) WAS AT AROUND PANAMAX / $ 21500 & SUPRAMAX / $ 18500 PER DAY - VISTAAR SHIPPING
COALspot.com: The BDI continued to go up and was up by 7.57 pct even though the stock markets was severely affected with worries on Greek debt crisi ...
Saturday, 08 May 10
MAHAGENCO TO IMPORT 3.35 MILLION TON OF COAL
COALspot.com: Indian utility Maharashtra State Power Generation Co. Ltd. is in market for 3.35 million tones of imported coal. The purchase of coal ...
Saturday, 08 May 10
NAPOCOR BUYS 122,000 TONS COAL - ABC CBN NEWS
ABC - CBN News reported that, State-run National Power Corp. (Napocor) said on Thursday it awarded 2 contracts for the supply of a total 122,000 ton ...
Saturday, 08 May 10
RICHARDS BAY COAL SHIPMENTS FALL TO AN 11-MONTH LOW - BLOOMBERG
Bloomberg reported that, Coal shipments from Richards Bay Coal Terminal, Africa’s biggest export facility for the fuel, fell to an 11-month lo ...
Tuesday, 04 May 10
APRIL 2010 COAL PRICE REFERENCE WAS US$ 86.58/T FOB VESSEL
COALspot.com: The directorate general of mineral, coal and geothermal of Indonesia has publishing a monthly coal price reference (HBA) to be used by ...
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- Wood Mackenzie - Singapore
- Straits Asia Resources Limited - Singapore
- Indogreen Group - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Sree Jayajothi Cements Limited - India
- Bhatia International Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- GMR Energy Limited - India
- International Coal Ventures Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Banpu Public Company Limited - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- Vedanta Resources Plc - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Makmur.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Makarim & Taira - Indonesia
- Oldendorff Carriers - Singapore
- Kapuas Tunggal Persada - Indonesia
- The University of Queensland
- Cement Manufacturers Association - India
- Barasentosa Lestari - Indonesia
- Edison Trading Spa - Italy
- Kobexindo Tractors - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bharathi Cement Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Madhucon Powers Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- GVK Power & Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Rio Tinto Coal - Australia
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Tata Chemicals Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jorong Barutama Greston.PT - Indonesia
- Economic Council, Georgia
- Pendopo Energi Batubara - Indonesia
- Eastern Coal Council - USA
- Meenaskhi Energy Private Limited - India
- Karaikal Port Pvt Ltd - India
- Agrawal Coal Company - India
- Mintek Dendrill Indonesia
- Independent Power Producers Association of India
- SN Aboitiz Power Inc, Philippines
- Ministry of Transport, Egypt
- Directorate Of Revenue Intelligence - India
- Sical Logistics Limited - India
- Mercuria Energy - Indonesia
- Trasteel International SA, Italy
- Standard Chartered Bank - UAE
- Parry Sugars Refinery, India
- Maheswari Brothers Coal Limited - India
- Kartika Selabumi Mining - Indonesia
- Energy Link Ltd, New Zealand
- Gujarat Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- European Bulk Services B.V. - Netherlands
- Electricity Generating Authority of Thailand
- Energy Development Corp, Philippines
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- MS Steel International - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sakthi Sugars Limited - India
- Vizag Seaport Private Limited - India
- Orica Mining Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Dalmia Cement Bharat India
- SMG Consultants - Indonesia
- TeaM Sual Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- McConnell Dowell - Australia
- VISA Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- IEA Clean Coal Centre - UK
- Bayan Resources Tbk. - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Alfred C Toepfer International GmbH - Germany
- London Commodity Brokers - England
- Commonwealth Bank - Australia
- Merrill Lynch Commodities Europe
- Meralco Power Generation, Philippines
- Renaissance Capital - South Africa
- Xindia Steels Limited - India
- Coastal Gujarat Power Limited - India
- Essar Steel Hazira Ltd - India
- Australian Coal Association
- Iligan Light & Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Sojitz Corporation - Japan
- Africa Commodities Group - South Africa
- Metalloyd Limited - United Kingdom
- Central Java Power - Indonesia
- Siam City Cement - Thailand
- Jaiprakash Power Ventures ltd
- Petrochimia International Co. Ltd.- Taiwan
- Directorate General of MIneral and Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Ministry of Mines - Canada
- Gujarat Sidhee Cement - India
- Borneo Indobara - Indonesia
- Interocean Group of Companies - India
- Sarangani Energy Corporation, Philippines
- Grasim Industreis Ltd - India
- ASAPP Information Group - India
- Latin American Coal - Colombia
- Orica Australia Pty. Ltd.
- Ministry of Finance - Indonesia
- Deloitte Consulting - India
- OPG Power Generation Pvt Ltd - India
- White Energy Company Limited
- Tamil Nadu electricity Board
- Malabar Cements Ltd - India
- Chamber of Mines of South Africa
- Electricity Authority, New Zealand
- Heidelberg Cement - Germany
- Ambuja Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Antam Resourcindo - Indonesia
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- Mercator Lines Limited - India
- Bhushan Steel Limited - India
- Chettinad Cement Corporation Ltd - India
- India Bulls Power Limited - India
- Indian Oil Corporation Limited
- Medco Energi Mining Internasional
- Romanian Commodities Exchange
- Billiton Holdings Pty Ltd - Australia
- Singapore Mercantile Exchange
- Carbofer General Trading SA - India
- Intertek Mineral Services - Indonesia
- San Jose City I Power Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement PLC, Thailand
- The Treasury - Australian Government
- Mjunction Services Limited - India
- Manunggal Multi Energi - Indonesia
- Bukit Baiduri Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- AsiaOL BioFuels Corp., Philippines
- Global Coal Blending Company Limited - Australia
- Indian Energy Exchange, India
- ICICI Bank Limited - India
- Marubeni Corporation - India
- Altura Mining Limited, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Petron Corporation, Philippines
- Indonesian Coal Mining Association
- Thai Mozambique Logistica
- Eastern Energy - Thailand
- Bhoruka Overseas - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- PTC India Limited - India
- Aditya Birla Group - India
- Baramulti Group, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Attock Cement Pakistan Limited
- Planning Commission, India
- Karbindo Abesyapradhi - Indoneisa
- Global Business Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Larsen & Toubro Limited - India
- Uttam Galva Steels Limited - India
- Salva Resources Pvt Ltd - India
- Indika Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Posco Energy - South Korea
- Timah Investasi Mineral - Indoneisa
- Simpson Spence & Young - Indonesia
- Georgia Ports Authority, United States
- Indo Tambangraya Megah - Indonesia
- Parliament of New Zealand
- The State Trading Corporation of India Ltd
- Cigading International Bulk Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Price Waterhouse Coopers - Russia
- PetroVietnam Power Coal Import and Supply Company
- Port Waratah Coal Services - Australia
- Global Green Power PLC Corporation, Philippines
- Central Electricity Authority - India
- Samtan Co., Ltd - South Korea
- Riau Bara Harum - Indonesia
- Goldman Sachs - Singapore
- Jindal Steel & Power Ltd - India
- PowerSource Philippines DevCo
- Bangladesh Power Developement Board
- Videocon Industries ltd - India
- Formosa Plastics Group - Taiwan
- Ind-Barath Power Infra Limited - India
- Anglo American - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- GAC Shipping (India) Pvt Ltd
- Lanco Infratech Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Star Paper Mills Limited - India
- Coal and Oil Company - UAE
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- SMC Global Power, Philippines
- Toyota Tsusho Corporation, Japan
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