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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, 10 February 16
OWNERS APPEAR WILLING TO DISPOSE OF TONNAGE THE SOONEST IT HITS THE 10 YEAR MARK - TIMOS PAPADIMITRIOU
COALspot.com: The last two months of 2015 made a case for traditional shipowners to invest in the dry bulk sector, doing so though based purely on ...
Monday, 08 February 16
DRY-BULK SHIPPING DIVING DEEP
COALspot.com: The freight markets continued to fall this past week.
The Baltic Dry Index (BDI) of dry-bulk shipping freights, a measure of glo ...
Monday, 08 February 16
DRY BULK: SHIPBROKER SEES BDI MARKET REACHING LOW POINT OF 236 POINTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The endless pit that is the dry bulk market over the past two months, has been the issue of debate among ship owners, shipbroker and analysts alike ...
Friday, 05 February 16
COAL INDIA EYES COAL MINES IN SOUTH AFRICA - PTI
“Coal India Ltd has plans of acquiring coal mines in South Africa,” an official said. It is looking at acquiring mines in partnership w ...
Friday, 05 February 16
U.S. WEEKLY COAL OUTPUT ROSE 4.2% TO 13.6 MMST
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 13.6 million shor ...
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- Gujarat Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Larsen & Toubro Limited - India
- Gujarat Sidhee Cement - India
- Interocean Group of Companies - India
- Global Business Power Corporation, Philippines
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- Salva Resources Pvt Ltd - India
- Georgia Ports Authority, United States
- Lanco Infratech Ltd - India
- PTC India Limited - India
- Heidelberg Cement - Germany
- Posco Energy - South Korea
- Siam City Cement - Thailand
- Formosa Plastics Group - Taiwan
- Parry Sugars Refinery, India
- Cigading International Bulk Terminal - Indonesia
- Vedanta Resources Plc - India
- PNOC Exploration Corporation - Philippines
- Riau Bara Harum - Indonesia
- Baramulti Group, Indonesia
- Karaikal Port Pvt Ltd - India
- White Energy Company Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- AsiaOL BioFuels Corp., Philippines
- GN Power Mariveles Coal Plant, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Attock Cement Pakistan Limited
- Asmin Koalindo Tuhup - Indonesia
- Barasentosa Lestari - Indonesia
- London Commodity Brokers - England
- Sindya Power Generating Company Private Ltd
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Carbofer General Trading SA - India
- Coal and Oil Company - UAE
- Altura Mining Limited, Indonesia
- Parliament of New Zealand
- Kobexindo Tractors - Indoneisa
- Meralco Power Generation, Philippines
- Antam Resourcindo - Indonesia
- Toyota Tsusho Corporation, Japan
- Petrochimia International Co. Ltd.- Taiwan
- Kepco SPC Power Corporation, Philippines
- VISA Power Limited - India
- Anglo American - United Kingdom
- Aditya Birla Group - India
- Electricity Authority, New Zealand
- MS Steel International - UAE
- Pendopo Energi Batubara - Indonesia
- Goldman Sachs - Singapore
- Videocon Industries ltd - India
- Bharathi Cement Corporation - India
- Energy Link Ltd, New Zealand
- Orica Mining Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Australian Commodity Traders Exchange
- ICICI Bank Limited - India
- Ceylon Electricity Board - Sri Lanka
- Indika Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Singapore Mercantile Exchange
- The State Trading Corporation of India Ltd
- Economic Council, Georgia
- IEA Clean Coal Centre - UK
- Leighton Contractors Pty Ltd - Australia
- Edison Trading Spa - Italy
- Central Electricity Authority - India
- Indian Energy Exchange, India
- Planning Commission, India
- Price Waterhouse Coopers - Russia
- Indogreen Group - Indonesia
- Uttam Galva Steels Limited - India
- SMG Consultants - Indonesia
- Kideco Jaya Agung - Indonesia
- The Treasury - Australian Government
- GMR Energy Limited - India
- Minerals Council of Australia
- Bangladesh Power Developement Board
- Medco Energi Mining Internasional
- Straits Asia Resources Limited - Singapore
- TeaM Sual Corporation - Philippines
- Jindal Steel & Power Ltd - India
- PowerSource Philippines DevCo
- Marubeni Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Cement Manufacturers Association - India
- Vizag Seaport Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Standard Chartered Bank - UAE
- Samtan Co., Ltd - South Korea
- Miang Besar Coal Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Madhucon Powers Ltd - India
- Africa Commodities Group - South Africa
- International Coal Ventures Pvt Ltd - India
- Thiess Contractors Indonesia
- Global Coal Blending Company Limited - Australia
- Kartika Selabumi Mining - Indonesia
- Bhatia International Limited - India
- Dalmia Cement Bharat India
- San Jose City I Power Corp, Philippines
- Siam City Cement PLC, Thailand
- Makarim & Taira - Indonesia
- Latin American Coal - Colombia
- Indonesian Coal Mining Association
- CIMB Investment Bank - Malaysia
- Indian Oil Corporation Limited
- Rashtriya Ispat Nigam Limited - India
- Merrill Lynch Commodities Europe
- Xindia Steels Limited - India
- Wood Mackenzie - Singapore
- Coastal Gujarat Power Limited - India
- European Bulk Services B.V. - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- Oldendorff Carriers - Singapore
- Maheswari Brothers Coal Limited - India
- Aboitiz Power Corporation - Philippines
- Coalindo Energy - Indonesia
- The University of Queensland
- Agrawal Coal Company - India
- India Bulls Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Independent Power Producers Association of India
- Ambuja Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Binh Thuan Hamico - Vietnam
- Directorate Of Revenue Intelligence - India
- IHS Mccloskey Coal Group - USA
- Sinarmas Energy and Mining - Indonesia
- Romanian Commodities Exchange
- Sree Jayajothi Cements Limited - India
- Kaltim Prima Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- Rio Tinto Coal - Australia
- McConnell Dowell - Australia
- Petron Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- Ministry of Finance - Indonesia
- Meenaskhi Energy Private Limited - India
- Commonwealth Bank - Australia
- Kumho Petrochemical, South Korea
- PetroVietnam Power Coal Import and Supply Company
- Sojitz Corporation - Japan
- Central Java Power - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Simpson Spence & Young - Indonesia
- New Zealand Coal & Carbon
- Alfred C Toepfer International GmbH - Germany
- Bulk Trading Sa - Switzerland
- Ministry of Mines - Canada
- ASAPP Information Group - India
- Karbindo Abesyapradhi - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sical Logistics Limited - India
- Mercuria Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Mercator Lines Limited - India
- SMC Global Power, Philippines
- Deloitte Consulting - India
- TNB Fuel Sdn Bhd - Malaysia
- Globalindo Alam Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Transport, Egypt
- Metalloyd Limited - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Sarangani Energy Corporation, Philippines
- Sakthi Sugars Limited - India
- Eastern Energy - Thailand
- Holcim Trading Pte Ltd - Singapore
- Mjunction Services Limited - India
- Energy Development Corp, Philippines
- Malabar Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Bhushan Steel Limited - India
- Port Waratah Coal Services - Australia
- Wilmar Investment Holdings
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Banpu Public Company Limited - Thailand
- OPG Power Generation Pvt Ltd - India
- Borneo Indobara - Indonesia
- Mintek Dendrill Indonesia
- Orica Australia Pty. Ltd.
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CNBM International Corporation - China
- Renaissance Capital - South Africa
- Chamber of Mines of South Africa
- Semirara Mining Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Tamil Nadu electricity Board
- Australian Coal Association
- Semirara Mining and Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
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