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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, 15 September 19
SUPRAMAX / ULTRAMAX: MORE STEMS WERE NOTICED GOING TO VIETNAM FROM INDONESIA - BALTIC BRIEFING
Capesize
Overall it was a negative week for the Capesize market, with many routes losing ground. A limited amount of time charter appeare ...
Wednesday, 11 September 19
THE INDONESIAN COAL PRICE REFERENCE FELL HEAVILY IN SEPTEMBER
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Wednesday, 11 September 19
SHIPPING MARKET INSIGHT - INTERMODAL
We are going through one of the rare instances where we see optimism building in the dry bulk industry and, as the momentum is still going, the bel ...
Monday, 09 September 19
INDIAN COMPANIES READY TO INVEST IN DEVELOPMENT OF NEW COAL DEPOSITS IN RUSSIA'S YAKUTIA - TASS
Indian metallurgical companies, which received trial batches of coal from Kolmar mining company, are satisfied with the quality of the products and ...
Monday, 09 September 19
COLOMBIA COAL OUTPUT DOWN YEAR-ON-YEAR IN 2ND QUARTER - REUTERS
Colombia, the world’s fifth-largest exporter of coal, produced 18.9 million tonnes of the fuel in the second quarter, down 4.5% from the same ...
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- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Miang Besar Coal Terminal - Indonesia
- Carbofer General Trading SA - India
- Global Green Power PLC Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Mintek Dendrill Indonesia
- Manunggal Multi Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Heidelberg Cement - Germany
- Vizag Seaport Private Limited - India
- CNBM International Corporation - China
- Bharathi Cement Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Kepco SPC Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Chamber of Mines of South Africa
- Parliament of New Zealand
- Planning Commission, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parry Sugars Refinery, India
- Sinarmas Energy and Mining - Indonesia
- Aditya Birla Group - India
- Samtan Co., Ltd - South Korea
- Essar Steel Hazira Ltd - India
- GVK Power & Infra Limited - India
- Thiess Contractors Indonesia
- Edison Trading Spa - Italy
- Wilmar Investment Holdings
- Coalindo Energy - Indonesia
- Central Java Power - Indonesia
- Economic Council, Georgia
- Kartika Selabumi Mining - Indonesia
- Cement Manufacturers Association - India
- Madhucon Powers Ltd - India
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- PowerSource Philippines DevCo
- IHS Mccloskey Coal Group - USA
- Indian Energy Exchange, India
- Trasteel International SA, Italy
- Chettinad Cement Corporation Ltd - India
- Grasim Industreis Ltd - India
- Anglo American - United Kingdom
- Thai Mozambique Logistica
- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- Agrawal Coal Company - India
- Bhatia International Limited - India
- Indika Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Romanian Commodities Exchange
- Dalmia Cement Bharat India
- Electricity Authority, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Transport, Egypt
- New Zealand Coal & Carbon
- SMG Consultants - Indonesia
- VISA Power Limited - India
- Baramulti Group, Indonesia
- Lanco Infratech Ltd - India
- Toyota Tsusho Corporation, Japan
- Antam Resourcindo - Indonesia
- Kaltim Prima Coal - Indonesia
- Ministry of Finance - Indonesia
- Makarim & Taira - Indonesia
- Karaikal Port Pvt Ltd - India
- Larsen & Toubro Limited - India
- Australian Commodity Traders Exchange
- Iligan Light & Power Inc, Philippines
- Ministry of Mines - Canada
- Alfred C Toepfer International GmbH - Germany
- Mercator Lines Limited - India
- Straits Asia Resources Limited - Singapore
- Bayan Resources Tbk. - Indonesia
- Globalindo Alam Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Australian Coal Association
- Minerals Council of Australia
- Sarangani Energy Corporation, Philippines
- Altura Mining Limited, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Maharashtra Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Energy Link Ltd, New Zealand
- Standard Chartered Bank - UAE
- Karbindo Abesyapradhi - Indoneisa
- San Jose City I Power Corp, Philippines
- Videocon Industries ltd - India
- Georgia Ports Authority, United States
- Singapore Mercantile Exchange
- Banpu Public Company Limited - Thailand
- India Bulls Power Limited - India
- Malabar Cements Ltd - India
- Sojitz Corporation - Japan
- Latin American Coal - Colombia
- Indonesian Coal Mining Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- South Luzon Thermal Energy Corporation
- ASAPP Information Group - India
- Attock Cement Pakistan Limited
- Global Business Power Corporation, Philippines
- PTC India Limited - India
- MS Steel International - UAE
- Oldendorff Carriers - Singapore
- Energy Development Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Bhushan Steel Limited - India
- Pendopo Energi Batubara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Directorate General of MIneral and Coal - Indonesia
- Uttam Galva Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- The University of Queensland
- IEA Clean Coal Centre - UK
- Siam City Cement PLC, Thailand
- Coastal Gujarat Power Limited - India
- Gujarat Sidhee Cement - India
- Tamil Nadu electricity Board
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- Indian Oil Corporation Limited
- Marubeni Corporation - India
- Vedanta Resources Plc - India
- The Treasury - Australian Government
- Bukit Makmur.PT - Indonesia
- Riau Bara Harum - Indonesia
- Rio Tinto Coal - Australia
- GN Power Mariveles Coal Plant, Philippines
- London Commodity Brokers - England
- Rashtriya Ispat Nigam Limited - India
- European Bulk Services B.V. - Netherlands
- Jindal Steel & Power Ltd - India
- Medco Energi Mining Internasional
- Sree Jayajothi Cements Limited - India
- Meralco Power Generation, Philippines
- Port Waratah Coal Services - Australia
- Intertek Mineral Services - Indonesia
- McConnell Dowell - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Africa Commodities Group - South Africa
- Aboitiz Power Corporation - Philippines
- Star Paper Mills Limited - India
- Krishnapatnam Port Company Ltd. - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- TeaM Sual Corporation - Philippines
- Deloitte Consulting - India
- White Energy Company Limited
- Eastern Energy - Thailand
- AsiaOL BioFuels Corp., Philippines
- Electricity Generating Authority of Thailand
- Independent Power Producers Association of India
- Central Electricity Authority - India
- Gujarat Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Bulk Trading Sa - Switzerland
- GAC Shipping (India) Pvt Ltd
- Global Coal Blending Company Limited - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- PNOC Exploration Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Formosa Plastics Group - Taiwan
- Sakthi Sugars Limited - India
- Bangladesh Power Developement Board
- SMC Global Power, Philippines
- The State Trading Corporation of India Ltd
- Coal and Oil Company - UAE
- Kohat Cement Company Ltd. - Pakistan
- Meenaskhi Energy Private Limited - India
- Eastern Coal Council - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ambuja Cements Ltd - India
- Xindia Steels Limited - India
- Tata Chemicals Ltd - India
- Power Finance Corporation Ltd., India
- Goldman Sachs - Singapore
- Interocean Group of Companies - India
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- International Coal Ventures Pvt Ltd - India
- Wood Mackenzie - Singapore
- Barasentosa Lestari - Indonesia
- Indogreen Group - Indonesia
- Semirara Mining Corp, Philippines
- Posco Energy - South Korea
- Binh Thuan Hamico - Vietnam
- Siam City Cement - Thailand
- Simpson Spence & Young - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Merrill Lynch Commodities Europe
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Therma Luzon, Inc, Philippines
- Borneo Indobara - Indonesia
- Timah Investasi Mineral - Indoneisa
- GMR Energy Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- Directorate Of Revenue Intelligence - India
- Orica Mining Services - Indonesia
- Kumho Petrochemical, South Korea
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