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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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- Indonesian Coal Mining Association
- GMR Energy Limited - India
- Medco Energi Mining Internasional
- Standard Chartered Bank - UAE
- Commonwealth Bank - Australia
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Indika Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Essar Steel Hazira Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Directorate General of MIneral and Coal - Indonesia
- The State Trading Corporation of India Ltd
- TeaM Sual Corporation - Philippines
- Bhushan Steel Limited - India
- Sinarmas Energy and Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Planning Commission, India
- Chamber of Mines of South Africa
- Alfred C Toepfer International GmbH - Germany
- Coalindo Energy - Indonesia
- MS Steel International - UAE
- Thiess Contractors Indonesia
- Ceylon Electricity Board - Sri Lanka
- Karbindo Abesyapradhi - Indoneisa
- PowerSource Philippines DevCo
- ASAPP Information Group - India
- Iligan Light & Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Leighton Contractors Pty Ltd - Australia
- Malabar Cements Ltd - India
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- Siam City Cement - Thailand
- Central Electricity Authority - India
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- Antam Resourcindo - Indonesia
- Trasteel International SA, Italy
- Sakthi Sugars Limited - India
- Rio Tinto Coal - Australia
- Energy Link Ltd, New Zealand
- Kepco SPC Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Anglo American - United Kingdom
- Independent Power Producers Association of India
- Meralco Power Generation, Philippines
- Orica Australia Pty. Ltd.
- Tamil Nadu electricity Board
- Kobexindo Tractors - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Baramulti Group, Indonesia
- Global Coal Blending Company Limited - Australia
- Eastern Coal Council - USA
- Pendopo Energi Batubara - Indonesia
- PNOC Exploration Corporation - Philippines
- Indogreen Group - Indonesia
- SN Aboitiz Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Sarangani Energy Corporation, Philippines
- Xindia Steels Limited - India
- Bhoruka Overseas - Indonesia
- Vedanta Resources Plc - India
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Semirara Mining and Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Eastern Energy - Thailand
- Toyota Tsusho Corporation, Japan
- Posco Energy - South Korea
- Samtan Co., Ltd - South Korea
- Timah Investasi Mineral - Indoneisa
- Savvy Resources Ltd - HongKong
- Oldendorff Carriers - Singapore
- Australian Commodity Traders Exchange
- Australian Coal Association
- Bukit Baiduri Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Finance - Indonesia
- Salva Resources Pvt Ltd - India
- Bharathi Cement Corporation - India
- Lanco Infratech Ltd - India
- PTC India Limited - India
- Merrill Lynch Commodities Europe
- Ministry of Mines - Canada
- Indian Oil Corporation Limited
- Mercuria Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Electricity Authority, New Zealand
- Sree Jayajothi Cements Limited - India
- Singapore Mercantile Exchange
- Kohat Cement Company Ltd. - Pakistan
- Africa Commodities Group - South Africa
- ICICI Bank Limited - India
- Vizag Seaport Private Limited - India
- SMC Global Power, Philippines
- Semirara Mining Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Petron Corporation, Philippines
- Thai Mozambique Logistica
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jaiprakash Power Ventures ltd
- The University of Queensland
- OPG Power Generation Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Marubeni Corporation - India
- VISA Power Limited - India
- Bhatia International Limited - India
- Georgia Ports Authority, United States
- Central Java Power - Indonesia
- Larsen & Toubro Limited - India
- Madhucon Powers Ltd - India
- European Bulk Services B.V. - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Port Waratah Coal Services - Australia
- Grasim Industreis Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mjunction Services Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indo Tambangraya Megah - Indonesia
- Deloitte Consulting - India
- Riau Bara Harum - Indonesia
- San Jose City I Power Corp, Philippines
- Star Paper Mills Limited - India
- Directorate Of Revenue Intelligence - India
- Neyveli Lignite Corporation Ltd, - India
- Therma Luzon, Inc, Philippines
- SMG Consultants - Indonesia
- Tata Chemicals Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Altura Mining Limited, Indonesia
- Parry Sugars Refinery, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Dalmia Cement Bharat India
- Gujarat Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Power Finance Corporation Ltd., India
- CNBM International Corporation - China
- Rashtriya Ispat Nigam Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Kaltim Prima Coal - Indonesia
- The Treasury - Australian Government
- Romanian Commodities Exchange
- Carbofer General Trading SA - India
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- Economic Council, Georgia
- Sical Logistics Limited - India
- Videocon Industries ltd - India
- Bangladesh Power Developement Board
- Globalindo Alam Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- London Commodity Brokers - England
- Electricity Generating Authority of Thailand
- Wood Mackenzie - Singapore
- Parliament of New Zealand
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- McConnell Dowell - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Latin American Coal - Colombia
- Bulk Trading Sa - Switzerland
- Formosa Plastics Group - Taiwan
- Kapuas Tunggal Persada - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Aditya Birla Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ambuja Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- White Energy Company Limited
- Price Waterhouse Coopers - Russia
- Coal and Oil Company - UAE
- Bayan Resources Tbk. - Indonesia
- India Bulls Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Agrawal Coal Company - India
- Energy Development Corp, Philippines
- Makarim & Taira - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Holcim Trading Pte Ltd - Singapore
- New Zealand Coal & Carbon
- Jorong Barutama Greston.PT - Indonesia
- GVK Power & Infra Limited - India
- Straits Asia Resources Limited - Singapore
- Orica Mining Services - Indonesia
- Wilmar Investment Holdings
- CIMB Investment Bank - Malaysia
- Karaikal Port Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Renaissance Capital - South Africa
- Mercator Lines Limited - India
- Global Green Power PLC Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Edison Trading Spa - Italy
- Minerals Council of Australia
- Simpson Spence & Young - Indonesia
- Global Business Power Corporation, Philippines
- Indian Energy Exchange, India
- Barasentosa Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- IEA Clean Coal Centre - UK
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Makmur.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Mintek Dendrill Indonesia
- IHS Mccloskey Coal Group - USA
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