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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, 09 July 14
PANAMAX MARKET FINALLY CORRECTING UPWARDS; AVERAGE TC MORE THAN DOUBLING WEEK ON WEEK - INTERMODAL
The Dry Bulk market has closed off on Friday on a more positive note, with most segments noting weekly gains and the Panamax market finally correct ...
Wednesday, 09 July 14
SHIPPING MARKET INSIGHT - PANOS TSILINGIRIS
The mini-boom in dry bulker values catapulted ship prices too fast too far over the last one-and-a-half year. The concurrence of historically low p ...
Tuesday, 08 July 14
INDONESIAN COAL PRICE REFERENCE FALL AGAIN IN JULY; LOST 1.62%
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia again revised down the coal bench mark price in July. HBA for month of J ...
Tuesday, 08 July 14
ENERGY IN THE MIX - INTERMODAL SHIPBROKERS
With the Tanker freight market having showed much promise this year compared to the performance that had been noted during the previous five, it is ...
Monday, 07 July 14
INDONESIA STATE-CONTROLLED COAL MINER BUKIT ASAM TO TRADE COAL ON-LINE THROUGH JFX
COALspot.com: Indonesian state owned coal miner PT Tambang Batubara Bukit Asam Tbk (PTBA) has teamed up with Jakarta Futures Exchange (JFX) to sell ...
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- Sree Jayajothi Cements Limited - India
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- Binh Thuan Hamico - Vietnam
- Meenaskhi Energy Private Limited - India
- Electricity Authority, New Zealand
- Sical Logistics Limited - India
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- Medco Energi Mining Internasional
- Siam City Cement - Thailand
- The University of Queensland
- Aditya Birla Group - India
- Sindya Power Generating Company Private Ltd
- Bukit Makmur.PT - Indonesia
- Petron Corporation, Philippines
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- Australian Coal Association
- Planning Commission, India
- Coalindo Energy - Indonesia
- Uttam Galva Steels Limited - India
- Energy Link Ltd, New Zealand
- Chettinad Cement Corporation Ltd - India
- Mercator Lines Limited - India
- LBH Netherlands Bv - Netherlands
- Kobexindo Tractors - Indoneisa
- Parry Sugars Refinery, India
- Singapore Mercantile Exchange
- Trasteel International SA, Italy
- GAC Shipping (India) Pvt Ltd
- Indian Energy Exchange, India
- The Treasury - Australian Government
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mintek Dendrill Indonesia
- Cigading International Bulk Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement PLC, Thailand
- International Coal Ventures Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meralco Power Generation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Global Business Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Cement Manufacturers Association - India
- Holcim Trading Pte Ltd - Singapore
- AsiaOL BioFuels Corp., Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sojitz Corporation - Japan
- Metalloyd Limited - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Africa Commodities Group - South Africa
- European Bulk Services B.V. - Netherlands
- Straits Asia Resources Limited - Singapore
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Maheswari Brothers Coal Limited - India
- Wilmar Investment Holdings
- Bahari Cakrawala Sebuku - Indonesia
- Latin American Coal - Colombia
- Australian Commodity Traders Exchange
- Semirara Mining Corp, Philippines
- ASAPP Information Group - India
- Manunggal Multi Energi - Indonesia
- Economic Council, Georgia
- Minerals Council of Australia
- Essar Steel Hazira Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Parliament of New Zealand
- Globalindo Alam Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- White Energy Company Limited
- Kumho Petrochemical, South Korea
- Thai Mozambique Logistica
- Renaissance Capital - South Africa
- Gujarat Sidhee Cement - India
- Tamil Nadu electricity Board
- Leighton Contractors Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Formosa Plastics Group - Taiwan
- Larsen & Toubro Limited - India
- CNBM International Corporation - China
- Videocon Industries ltd - India
- Mercuria Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bulk Trading Sa - Switzerland
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
- Ceylon Electricity Board - Sri Lanka
- Ministry of Transport, Egypt
- Grasim Industreis Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pendopo Energi Batubara - Indonesia
- Vizag Seaport Private Limited - India
- Electricity Generating Authority of Thailand
- Kaltim Prima Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Coastal Gujarat Power Limited - India
- Indogreen Group - Indonesia
- Standard Chartered Bank - UAE
- Bukit Baiduri Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Indika Energy - Indonesia
- Bangladesh Power Developement Board
- Thiess Contractors Indonesia
- Rio Tinto Coal - Australia
- Banpu Public Company Limited - Thailand
- Kalimantan Lumbung Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Central Electricity Authority - India
- Orica Australia Pty. Ltd.
- London Commodity Brokers - England
- Makarim & Taira - Indonesia
- PTC India Limited - India
- Romanian Commodities Exchange
- Carbofer General Trading SA - India
- Independent Power Producers Association of India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Mjunction Services Limited - India
- Ministry of Finance - Indonesia
- ICICI Bank Limited - India
- Edison Trading Spa - Italy
- Merrill Lynch Commodities Europe
- TNB Fuel Sdn Bhd - Malaysia
- Timah Investasi Mineral - Indoneisa
- Jaiprakash Power Ventures ltd
- Asmin Koalindo Tuhup - Indonesia
- Energy Development Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Dalmia Cement Bharat India
- Kapuas Tunggal Persada - Indonesia
- Port Waratah Coal Services - Australia
- Coal and Oil Company - UAE
- Georgia Ports Authority, United States
- Barasentosa Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- OPG Power Generation Pvt Ltd - India
- Borneo Indobara - Indonesia
- Price Waterhouse Coopers - Russia
- Gujarat Mineral Development Corp Ltd - India
- VISA Power Limited - India
- PowerSource Philippines DevCo
- SMC Global Power, Philippines
- Star Paper Mills Limited - India
- Deloitte Consulting - India
- TeaM Sual Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Vedanta Resources Plc - India
- India Bulls Power Limited - India
- Baramulti Group, Indonesia
- Sarangani Energy Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- IHS Mccloskey Coal Group - USA
- Toyota Tsusho Corporation, Japan
- Vijayanagar Sugar Pvt Ltd - India
- New Zealand Coal & Carbon
- Kideco Jaya Agung - Indonesia
- GMR Energy Limited - India
- Goldman Sachs - Singapore
- Indian Oil Corporation Limited
- Aboitiz Power Corporation - Philippines
- IEA Clean Coal Centre - UK
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Mines - Canada
- Altura Mining Limited, Indonesia
- Central Java Power - Indonesia
- SMG Consultants - Indonesia
- Commonwealth Bank - Australia
- Neyveli Lignite Corporation Ltd, - India
- Directorate Of Revenue Intelligence - India
- Pipit Mutiara Jaya. PT, Indonesia
- Samtan Co., Ltd - South Korea
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Eastern Energy - Thailand
- Kartika Selabumi Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Chamber of Mines of South Africa
- MS Steel International - UAE
- Agrawal Coal Company - India
- Bhoruka Overseas - Indonesia
- Riau Bara Harum - Indonesia
- Eastern Coal Council - USA
- GN Power Mariveles Coal Plant, Philippines
- Tata Chemicals Ltd - India
- Global Green Power PLC Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Madhucon Powers Ltd - India
- Intertek Mineral Services - Indonesia
- Malabar Cements Ltd - India
- Lanco Infratech Ltd - India
- The State Trading Corporation of India Ltd
- Karaikal Port Pvt Ltd - India
- Sakthi Sugars Limited - India
- Wood Mackenzie - Singapore
- Interocean Group of Companies - India
- Kohat Cement Company Ltd. - Pakistan
- Simpson Spence & Young - Indonesia
- Xindia Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Heidelberg Cement - Germany
- Orica Mining Services - Indonesia
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