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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, 24 February 16
HOW IS THE FUEL MIX FOR U.S. ELECTRICITY GENERATION CHANGING? - EIA
In recent years, there have been changes in the mix of fuels used to generate electricity in the United States. Natural gas and renewable energy so ...
Wednesday, 24 February 16
PRIVATE EQUITY FUNDS LOOKING TO EXIT SHIPPING, MOST NOTABLY DRY BULK, AS OVERORDERING HAS RESULTED IN EXCESS TONNAGE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The injection of more than $13 billion in shipping from various private equity funds over the past few years has resulted in what many feared would ...
Wednesday, 24 February 16
THIRTEEN - NOT ALWAYS AN UNLUCKY NUMBER? - CLARKSONS
Back in early 1999 the price of a 5 year old Panamax bulkcarrier dipped to $13.5m, and ever since analysts have hailed purchase decisions made at t ...
Monday, 22 February 16
4200 GAR COAL INDEX SETTLES AT $27.02, DOWN 0.07% FROM LAST WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 0.17 percent week over week to averaging $38.89 per ton on this past Friday, ...
Monday, 22 February 16
FREIGHT MARKETS PICKED UP SLIGHTLY THIS PAST WEEK
COALspot.com: The freight markets picked up slightly this past week.
The Baltic Dry Index (BDI) of dry-bulk shipping freights, a measure of gl ...
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- Altura Mining Limited, Indonesia
- Chettinad Cement Corporation Ltd - India
- Indonesian Coal Mining Association
- Meralco Power Generation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Attock Cement Pakistan Limited
- Indo Tambangraya Megah - Indonesia
- SMC Global Power, Philippines
- Salva Resources Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Mines - Canada
- Essar Steel Hazira Ltd - India
- PowerSource Philippines DevCo
- Coal and Oil Company - UAE
- Jaiprakash Power Ventures ltd
- Vijayanagar Sugar Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- New Zealand Coal & Carbon
- Kobexindo Tractors - Indoneisa
- Chamber of Mines of South Africa
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Agrawal Coal Company - India
- Simpson Spence & Young - Indonesia
- Kumho Petrochemical, South Korea
- Sree Jayajothi Cements Limited - India
- White Energy Company Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bulk Trading Sa - Switzerland
- Medco Energi Mining Internasional
- Formosa Plastics Group - Taiwan
- Central Electricity Authority - India
- Energy Development Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Bhushan Steel Limited - India
- IHS Mccloskey Coal Group - USA
- Krishnapatnam Port Company Ltd. - India
- GMR Energy Limited - India
- Indogreen Group - Indonesia
- Anglo American - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Uttam Galva Steels Limited - India
- Coalindo Energy - Indonesia
- Semirara Mining Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- Electricity Authority, New Zealand
- Kepco SPC Power Corporation, Philippines
- Parry Sugars Refinery, India
- OPG Power Generation Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Riau Bara Harum - Indonesia
- San Jose City I Power Corp, Philippines
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Rashtriya Ispat Nigam Limited - India
- Indika Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Central Java Power - Indonesia
- TeaM Sual Corporation - Philippines
- Global Business Power Corporation, Philippines
- Posco Energy - South Korea
- Larsen & Toubro Limited - India
- Bukit Baiduri Energy - Indonesia
- Minerals Council of Australia
- Banpu Public Company Limited - Thailand
- Samtan Co., Ltd - South Korea
- Maheswari Brothers Coal Limited - India
- International Coal Ventures Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- SMG Consultants - Indonesia
- Billiton Holdings Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- Singapore Mercantile Exchange
- Bayan Resources Tbk. - Indonesia
- MS Steel International - UAE
- Marubeni Corporation - India
- Ind-Barath Power Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Directorate Of Revenue Intelligence - India
- Planning Commission, India
- Sarangani Energy Corporation, Philippines
- Intertek Mineral Services - Indonesia
- McConnell Dowell - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Coal Association
- Mintek Dendrill Indonesia
- Asmin Koalindo Tuhup - Indonesia
- The University of Queensland
- Jindal Steel & Power Ltd - India
- Siam City Cement PLC, Thailand
- Eastern Coal Council - USA
- Bangladesh Power Developement Board
- Timah Investasi Mineral - Indoneisa
- The State Trading Corporation of India Ltd
- Siam City Cement - Thailand
- Sinarmas Energy and Mining - Indonesia
- Rio Tinto Coal - Australia
- Vizag Seaport Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Bharathi Cement Corporation - India
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Parliament of New Zealand
- Malabar Cements Ltd - India
- Africa Commodities Group - South Africa
- Renaissance Capital - South Africa
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- Kartika Selabumi Mining - Indonesia
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- Australian Commodity Traders Exchange
- Sojitz Corporation - Japan
- Semirara Mining and Power Corporation, Philippines
- Latin American Coal - Colombia
- Commonwealth Bank - Australia
- Kalimantan Lumbung Energi - Indonesia
- Deloitte Consulting - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Mjunction Services Limited - India
- Energy Link Ltd, New Zealand
- Goldman Sachs - Singapore
- Gujarat Sidhee Cement - India
- Cement Manufacturers Association - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Savvy Resources Ltd - HongKong
- Vedanta Resources Plc - India
- CNBM International Corporation - China
- Trasteel International SA, Italy
- European Bulk Services B.V. - Netherlands
- Petron Corporation, Philippines
- Carbofer General Trading SA - India
- Petrochimia International Co. Ltd.- Taiwan
- Therma Luzon, Inc, Philippines
- Barasentosa Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thai Mozambique Logistica
- Globalindo Alam Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Kohat Cement Company Ltd. - Pakistan
- Orica Australia Pty. Ltd.
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Makmur.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Makarim & Taira - Indonesia
- ASAPP Information Group - India
- Price Waterhouse Coopers - Russia
- Ministry of Finance - Indonesia
- Sical Logistics Limited - India
- Binh Thuan Hamico - Vietnam
- Wood Mackenzie - Singapore
- Grasim Industreis Ltd - India
- Global Coal Blending Company Limited - Australia
- Merrill Lynch Commodities Europe
- Videocon Industries ltd - India
- Kaltim Prima Coal - Indonesia
- Dalmia Cement Bharat India
- PTC India Limited - India
- VISA Power Limited - India
- Indian Oil Corporation Limited
- Sindya Power Generating Company Private Ltd
- Ministry of Transport, Egypt
- Aboitiz Power Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Straits Asia Resources Limited - Singapore
- Metalloyd Limited - United Kingdom
- Pendopo Energi Batubara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Oldendorff Carriers - Singapore
- GAC Shipping (India) Pvt Ltd
- Manunggal Multi Energi - Indonesia
- Ambuja Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Tamil Nadu electricity Board
- GVK Power & Infra Limited - India
- Mercator Lines Limited - India
- Mercuria Energy - Indonesia
- Interocean Group of Companies - India
- Edison Trading Spa - Italy
- Xindia Steels Limited - India
- ICICI Bank Limited - India
- Power Finance Corporation Ltd., India
- Wilmar Investment Holdings
- Alfred C Toepfer International GmbH - Germany
- South Luzon Thermal Energy Corporation
- Madhucon Powers Ltd - India
- Tata Chemicals Ltd - India
- Bhatia International Limited - India
- Star Paper Mills Limited - India
- Iligan Light & Power Inc, Philippines
- Aditya Birla Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Georgia Ports Authority, United States
- Economic Council, Georgia
- Standard Chartered Bank - UAE
- Karaikal Port Pvt Ltd - India
- Indian Energy Exchange, India
- Sakthi Sugars Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Borneo Indobara - Indonesia
- IEA Clean Coal Centre - UK
- Independent Power Producers Association of India
- Bhoruka Overseas - Indonesia
- Antam Resourcindo - Indonesia
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