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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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Wednesday, 20 July 16
EDIBLE OIL MARKETS ACROSS THE GLOBE REMAIN UNDER PRESSURE - STELIOS KOLLINTZAS
The edible oil markets across the globe remain under pressure on the back of lackluster demand. Some of the main factors causing the low activity a ...
Tuesday, 19 July 16
INDONESIAN THERMAL COAL INDEXES CONTINUALLY FIRM UP ON ROBUST BUYING INTEREST - CS COAL INDEX
COALspot.com: Average 5000 GAR coal index of Indonesian origin rose One percent week over week to averaging $40.38 per ton this past week, shows CS ...
Monday, 18 July 16
FROM PIT TO PORT: DRY BULK NEEDS A NEW PATH TO PROFITABILITY - TOC EUROPE
During the golden years for commodities, from 2005 to 2014, high demand and big profit margins pushed companies to produce more and more, sacrifici ...
Monday, 18 July 16
BALTIC DRY INDEX REMAIN FIRM, UP BY 5.97 WEEK OVER WEEK
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities continued to remain firm with all segments ending in posi ...
Friday, 15 July 16
US COAL PRODUCTION DOWN 8.4% WEEK-OVER-WEEK
COALspot.com – U.S, world’s second largest coal producers has produced approximately totalled an estimated 12.9 million short tons (mms ...
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- Madhucon Powers Ltd - India
- Electricity Authority, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Bukit Baiduri Energy - Indonesia
- Malabar Cements Ltd - India
- Wilmar Investment Holdings
- Kobexindo Tractors - Indoneisa
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- Miang Besar Coal Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Romanian Commodities Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Xindia Steels Limited - India
- Trasteel International SA, Italy
- Siam City Cement - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Star Paper Mills Limited - India
- Australian Coal Association
- London Commodity Brokers - England
- Rashtriya Ispat Nigam Limited - India
- Bukit Makmur.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Indian Energy Exchange, India
- IEA Clean Coal Centre - UK
- Port Waratah Coal Services - Australia
- Mintek Dendrill Indonesia
- Leighton Contractors Pty Ltd - Australia
- Lanco Infratech Ltd - India
- IHS Mccloskey Coal Group - USA
- SN Aboitiz Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Pendopo Energi Batubara - Indonesia
- Ambuja Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Africa Commodities Group - South Africa
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- Sinarmas Energy and Mining - Indonesia
- VISA Power Limited - India
- Kaltim Prima Coal - Indonesia
- GVK Power & Infra Limited - India
- Oldendorff Carriers - Singapore
- Gujarat Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- Holcim Trading Pte Ltd - Singapore
- Vedanta Resources Plc - India
- Mercuria Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Essar Steel Hazira Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Transport, Egypt
- Carbofer General Trading SA - India
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- Krishnapatnam Port Company Ltd. - India
- Bayan Resources Tbk. - Indonesia
- Larsen & Toubro Limited - India
- Parry Sugars Refinery, India
- Goldman Sachs - Singapore
- McConnell Dowell - Australia
- Eastern Energy - Thailand
- Agrawal Coal Company - India
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Mercator Lines Limited - India
- Coalindo Energy - Indonesia
- Interocean Group of Companies - India
- Merrill Lynch Commodities Europe
- Globalindo Alam Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Orica Mining Services - Indonesia
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petron Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Maheswari Brothers Coal Limited - India
- India Bulls Power Limited - India
- Sarangani Energy Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Antam Resourcindo - Indonesia
- Electricity Generating Authority of Thailand
- Global Coal Blending Company Limited - Australia
- Bahari Cakrawala Sebuku - Indonesia
- GAC Shipping (India) Pvt Ltd
- South Luzon Thermal Energy Corporation
- Straits Asia Resources Limited - Singapore
- Iligan Light & Power Inc, Philippines
- Ministry of Finance - Indonesia
- TeaM Sual Corporation - Philippines
- MS Steel International - UAE
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- Sojitz Corporation - Japan
- Bhushan Steel Limited - India
- GMR Energy Limited - India
- Timah Investasi Mineral - Indoneisa
- Independent Power Producers Association of India
- Central Java Power - Indonesia
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- PowerSource Philippines DevCo
- Dalmia Cement Bharat India
- Kideco Jaya Agung - Indonesia
- Indika Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement PLC, Thailand
- Ministry of Mines - Canada
- OPG Power Generation Pvt Ltd - India
- Deloitte Consulting - India
- Australian Commodity Traders Exchange
- Minerals Council of Australia
- Indogreen Group - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Posco Energy - South Korea
- White Energy Company Limited
- Sakthi Sugars Limited - India
- Georgia Ports Authority, United States
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- Sree Jayajothi Cements Limited - India
- Chamber of Mines of South Africa
- Metalloyd Limited - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jaiprakash Power Ventures ltd
- Kumho Petrochemical, South Korea
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- Heidelberg Cement - Germany
- Banpu Public Company Limited - Thailand
- PNOC Exploration Corporation - Philippines
- Grasim Industreis Ltd - India
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- Indo Tambangraya Megah - Indonesia
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- The State Trading Corporation of India Ltd
- Bhoruka Overseas - Indonesia
- Renaissance Capital - South Africa
- CIMB Investment Bank - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Planning Commission, India
- Neyveli Lignite Corporation Ltd, - India
- Economic Council, Georgia
- International Coal Ventures Pvt Ltd - India
- Tamil Nadu electricity Board
- Ceylon Electricity Board - Sri Lanka
- Eastern Coal Council - USA
- Thai Mozambique Logistica
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- ASAPP Information Group - India
- New Zealand Coal & Carbon
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
- Attock Cement Pakistan Limited
- Directorate General of MIneral and Coal - Indonesia
- Marubeni Corporation - India
- Sindya Power Generating Company Private Ltd
- Jindal Steel & Power Ltd - India
- European Bulk Services B.V. - Netherlands
- Altura Mining Limited, Indonesia
- PTC India Limited - India
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- Videocon Industries ltd - India
- Salva Resources Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Meenaskhi Energy Private Limited - India
- Singapore Mercantile Exchange
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- Parliament of New Zealand
- Tata Chemicals Ltd - India
- Medco Energi Mining Internasional
- Rio Tinto Coal - Australia
- Bulk Trading Sa - Switzerland
- Kepco SPC Power Corporation, Philippines
- Coal and Oil Company - UAE
- AsiaOL BioFuels Corp., Philippines
- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- Uttam Galva Steels Limited - India
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- Mjunction Services Limited - India
- Chettinad Cement Corporation Ltd - India
- Orica Australia Pty. Ltd.
- Kalimantan Lumbung Energi - Indonesia
- Central Electricity Authority - India
- Intertek Mineral Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Anglo American - United Kingdom
- Karaikal Port Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- Indonesian Coal Mining Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Billiton Holdings Pty Ltd - Australia
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