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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, 23 November 14
ITALY'S STEAM COAL IMPORTS TO DROP BY 11% IN 2014 - ASSOCARBONI
COALspot.com: Italy’s steam coal imports expected to drop to 16 million tons in 2014 (-11% compared to 2013); coking coal imports to plunge t ...
Saturday, 22 November 14
THE FALL IN BUNKER PRICES REDUCE FUEL COSTS SIGNIFICANTLY - BIMCO, PETER SAND
For a ship that burns 24 tonnes of fuel per day while steaming, fuel costs are reduced by as much as USD 1 million a year if current price level st ...
Saturday, 22 November 14
DRY BULKERS NEWBUILDING DELIVERIES REACHED 11.8 MILLION DWT DURING THIRD QUARTER, NET FLEET GROWTH FOR 2014 TO REACH 5% - HELLENIC SHIPPING NEWS
The dry bulk market has rebounded since its less than impressive performance since the start of the year, but overall, third quarter figures could ...
Friday, 21 November 14
BUMI ENTERS INTO CONDITIONAL SALE & PURCHASE AGREEMENT TO SELL FBS STAKE
COALspot.com: PT Bumi Resources Tbk, one of the Indonesia's largest coal producers confirms that it has executed a Conditional Sale and Purchas ...
Friday, 21 November 14
U.S LAST WEEK'S COAL PRODUCTION STAYS FLAT W-O-W
COALspot.com – United States the world's one of the largest coal producers, produced approximately 18.9 million short tons (mmst) of coal ...
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- Ambuja Cements Ltd - India
- CIMB Investment Bank - Malaysia
- The Treasury - Australian Government
- Essar Steel Hazira Ltd - India
- International Coal Ventures Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Independent Power Producers Association of India
- Tata Chemicals Ltd - India
- Baramulti Group, Indonesia
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- Deloitte Consulting - India
- Xindia Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Bayan Resources Tbk. - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kaltim Prima Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Central Electricity Authority - India
- Agrawal Coal Company - India
- Intertek Mineral Services - Indonesia
- Star Paper Mills Limited - India
- San Jose City I Power Corp, Philippines
- Kumho Petrochemical, South Korea
- Vijayanagar Sugar Pvt Ltd - India
- CNBM International Corporation - China
- White Energy Company Limited
- IEA Clean Coal Centre - UK
- Cigading International Bulk Terminal - Indonesia
- Makarim & Taira - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- London Commodity Brokers - England
- Bhushan Steel Limited - India
- The State Trading Corporation of India Ltd
- Chamber of Mines of South Africa
- Carbofer General Trading SA - India
- Africa Commodities Group - South Africa
- Wilmar Investment Holdings
- Mercator Lines Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Manunggal Multi Energi - Indonesia
- Interocean Group of Companies - India
- Indonesian Coal Mining Association
- Petron Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Vedanta Resources Plc - India
- Mercuria Energy - Indonesia
- Indian Energy Exchange, India
- Georgia Ports Authority, United States
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- Cement Manufacturers Association - India
- Singapore Mercantile Exchange
- PNOC Exploration Corporation - Philippines
- Economic Council, Georgia
- Sojitz Corporation - Japan
- ICICI Bank Limited - India
- Barasentosa Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- MS Steel International - UAE
- Timah Investasi Mineral - Indoneisa
- Therma Luzon, Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- GMR Energy Limited - India
- Electricity Generating Authority of Thailand
- Antam Resourcindo - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Finance - Indonesia
- PowerSource Philippines DevCo
- Gujarat Mineral Development Corp Ltd - India
- Thai Mozambique Logistica
- Jindal Steel & Power Ltd - India
- Australian Coal Association
- Trasteel International SA, Italy
- Siam City Cement - Thailand
- Simpson Spence & Young - Indonesia
- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- Bangladesh Power Developement Board
- Electricity Authority, New Zealand
- Price Waterhouse Coopers - Russia
- Gujarat Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- LBH Netherlands Bv - Netherlands
- Bhoruka Overseas - Indonesia
- Pendopo Energi Batubara - Indonesia
- Attock Cement Pakistan Limited
- Altura Mining Limited, Indonesia
- Sree Jayajothi Cements Limited - India
- Videocon Industries ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Bahari Cakrawala Sebuku - Indonesia
- Meralco Power Generation, Philippines
- Parry Sugars Refinery, India
- Malabar Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Globalindo Alam Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Merrill Lynch Commodities Europe
- Kepco SPC Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Aditya Birla Group - India
- ASAPP Information Group - India
- Standard Chartered Bank - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Energy Link Ltd, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Lanco Infratech Ltd - India
- Eastern Energy - Thailand
- Grasim Industreis Ltd - India
- Mintek Dendrill Indonesia
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Aboitiz Power Corporation - Philippines
- Wood Mackenzie - Singapore
- Latin American Coal - Colombia
- Edison Trading Spa - Italy
- Toyota Tsusho Corporation, Japan
- Larsen & Toubro Limited - India
- Salva Resources Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMC Global Power, Philippines
- Indo Tambangraya Megah - Indonesia
- Metalloyd Limited - United Kingdom
- Bulk Trading Sa - Switzerland
- Bharathi Cement Corporation - India
- Holcim Trading Pte Ltd - Singapore
- New Zealand Coal & Carbon
- Orica Mining Services - Indonesia
- Power Finance Corporation Ltd., India
- PTC India Limited - India
- Bhatia International Limited - India
- AsiaOL BioFuels Corp., Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kobexindo Tractors - Indoneisa
- Maheswari Brothers Coal Limited - India
- Sical Logistics Limited - India
- Coal and Oil Company - UAE
- Banpu Public Company Limited - Thailand
- Anglo American - United Kingdom
- Romanian Commodities Exchange
- Savvy Resources Ltd - HongKong
- Central Java Power - Indonesia
- Tamil Nadu electricity Board
- Parliament of New Zealand
- Indika Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Sindya Power Generating Company Private Ltd
- Eastern Coal Council - USA
- Madhucon Powers Ltd - India
- South Luzon Thermal Energy Corporation
- Dalmia Cement Bharat India
- VISA Power Limited - India
- Straits Asia Resources Limited - Singapore
- Port Waratah Coal Services - Australia
- Minerals Council of Australia
- Ministry of Transport, Egypt
- Indian Oil Corporation Limited
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- Uttam Galva Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Posco Energy - South Korea
- Heidelberg Cement - Germany
- Directorate Of Revenue Intelligence - India
- Iligan Light & Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- McConnell Dowell - Australia
- The University of Queensland
- Siam City Cement PLC, Thailand
- Goldman Sachs - Singapore
- SMG Consultants - Indonesia
- Mjunction Services Limited - India
- Kapuas Tunggal Persada - Indonesia
- Renaissance Capital - South Africa
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Sidhee Cement - India
- Global Green Power PLC Corporation, Philippines
- Planning Commission, India
- European Bulk Services B.V. - Netherlands
- Formosa Plastics Group - Taiwan
- SN Aboitiz Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Marubeni Corporation - India
- Riau Bara Harum - Indonesia
- Semirara Mining Corp, Philippines
- TeaM Sual Corporation - Philippines
- Energy Development Corp, Philippines
- Thiess Contractors Indonesia
- Rio Tinto Coal - Australia
- Orica Australia Pty. Ltd.
- India Bulls Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
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