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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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Friday, 07 March 14
INDONESIA TO PRODUCE 421 MMT OF COAL IN 2014
Coalspot.com: Indonesia finally agreed to increased 2014 coal output by as much as 6 percent to 421 million metric tons from its previous plan, a se ...
Friday, 07 March 14
US PRODUCED 19.4 MMST OF COAL IN PAST 7 DAYS, SAYS EIA
COALspot.com – United States the world’s second largest coal producer, produced approximately 19.4 million short tons (mmst) of coal in ...
Thursday, 06 March 14
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Handy
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Wednesday, 05 March 14
THE BIG BULKERS HAVE IN FACT WITNESSED SIGNIFICANT IMPROVEMENTS IN BOTH BASINS
The BDI continues to gain back some of the lost ground, although in reality there isn't a lot to celebrate abou ...
Wednesday, 05 March 14
LEAVE IT TO CAPES TO CHANGE THE DIRECTION OF THE DRY BULK MARKET - INTERMODAL
Chartering (Wet: Stable- / Dry: Stable+)
Leave it to Capes to change the direction of the Dry Bulk market. The big bulkers managed to drag the BDI ...
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- Romanian Commodities Exchange
- Videocon Industries ltd - India
- Eastern Coal Council - USA
- Kapuas Tunggal Persada - Indonesia
- SMG Consultants - Indonesia
- International Coal Ventures Pvt Ltd - India
- Mjunction Services Limited - India
- MS Steel International - UAE
- Bangladesh Power Developement Board
- Dalmia Cement Bharat India
- Interocean Group of Companies - India
- Price Waterhouse Coopers - Russia
- Energy Link Ltd, New Zealand
- Mercuria Energy - Indonesia
- Xindia Steels Limited - India
- Thiess Contractors Indonesia
- Iligan Light & Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Uttam Galva Steels Limited - India
- CNBM International Corporation - China
- Straits Asia Resources Limited - Singapore
- Wilmar Investment Holdings
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Kepco SPC Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- Mintek Dendrill Indonesia
- Global Business Power Corporation, Philippines
- The Treasury - Australian Government
- Edison Trading Spa - Italy
- GAC Shipping (India) Pvt Ltd
- AsiaOL BioFuels Corp., Philippines
- Trasteel International SA, Italy
- Indian Oil Corporation Limited
- Directorate General of MIneral and Coal - Indonesia
- Power Finance Corporation Ltd., India
- Bayan Resources Tbk. - Indonesia
- Minerals Council of Australia
- Therma Luzon, Inc, Philippines
- Posco Energy - South Korea
- Commonwealth Bank - Australia
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Binh Thuan Hamico - Vietnam
- Jindal Steel & Power Ltd - India
- Eastern Energy - Thailand
- Borneo Indobara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- LBH Netherlands Bv - Netherlands
- Krishnapatnam Port Company Ltd. - India
- SMC Global Power, Philippines
- Oldendorff Carriers - Singapore
- Altura Mining Limited, Indonesia
- European Bulk Services B.V. - Netherlands
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- Madhucon Powers Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Mines - Canada
- Vizag Seaport Private Limited - India
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- Standard Chartered Bank - UAE
- Sical Logistics Limited - India
- Australian Commodity Traders Exchange
- Deloitte Consulting - India
- Mercator Lines Limited - India
- Australian Coal Association
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Finance - Indonesia
- TeaM Sual Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Alfred C Toepfer International GmbH - Germany
- San Jose City I Power Corp, Philippines
- Merrill Lynch Commodities Europe
- Kumho Petrochemical, South Korea
- Rio Tinto Coal - Australia
- The University of Queensland
- India Bulls Power Limited - India
- Ind-Barath Power Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Sindya Power Generating Company Private Ltd
- Central Electricity Authority - India
- Energy Development Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- VISA Power Limited - India
- Central Java Power - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- McConnell Dowell - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Formosa Plastics Group - Taiwan
- Kobexindo Tractors - Indoneisa
- Larsen & Toubro Limited - India
- Baramulti Group, Indonesia
- Carbofer General Trading SA - India
- Parliament of New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Electricity Authority, New Zealand
- Globalindo Alam Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Medco Energi Mining Internasional
- Gujarat Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Sidhee Cement - India
- Bahari Cakrawala Sebuku - Indonesia
- Jaiprakash Power Ventures ltd
- Economic Council, Georgia
- Offshore Bulk Terminal Pte Ltd, Singapore
- PTC India Limited - India
- GMR Energy Limited - India
- Bhushan Steel Limited - India
- Bukit Makmur.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- Ambuja Cements Ltd - India
- Siam City Cement - Thailand
- Planning Commission, India
- Star Paper Mills Limited - India
- Miang Besar Coal Terminal - Indonesia
- Goldman Sachs - Singapore
- The State Trading Corporation of India Ltd
- Salva Resources Pvt Ltd - India
- Coalindo Energy - Indonesia
- Aditya Birla Group - India
- White Energy Company Limited
- Kartika Selabumi Mining - Indonesia
- Africa Commodities Group - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PowerSource Philippines DevCo
- Sojitz Corporation - Japan
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- Indonesian Coal Mining Association
- Attock Cement Pakistan Limited
- CIMB Investment Bank - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Leighton Contractors Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Anglo American - United Kingdom
- Coastal Gujarat Power Limited - India
- Kaltim Prima Coal - Indonesia
- Riau Bara Harum - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Indogreen Group - Indonesia
- Heidelberg Cement - Germany
- Manunggal Multi Energi - Indonesia
- Lanco Infratech Ltd - India
- Aboitiz Power Corporation - Philippines
- Independent Power Producers Association of India
- Renaissance Capital - South Africa
- Bhatia International Limited - India
- Barasentosa Lestari - Indonesia
- Petron Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- ICICI Bank Limited - India
- Singapore Mercantile Exchange
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- Tata Chemicals Ltd - India
- Marubeni Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- Indo Tambangraya Megah - Indonesia
- Electricity Generating Authority of Thailand
- Coal and Oil Company - UAE
- Georgia Ports Authority, United States
- Tamil Nadu electricity Board
- Siam City Cement PLC, Thailand
- Meralco Power Generation, Philippines
- Karaikal Port Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- PNOC Exploration Corporation - Philippines
- Vedanta Resources Plc - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining Corp, Philippines
- Orica Australia Pty. Ltd.
- Bulk Trading Sa - Switzerland
- London Commodity Brokers - England
- Malabar Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Sakthi Sugars Limited - India
- Banpu Public Company Limited - Thailand
- Latin American Coal - Colombia
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- Global Green Power PLC Corporation, Philippines
- Port Waratah Coal Services - Australia
- IEA Clean Coal Centre - UK
- Orica Mining Services - Indonesia
- Thai Mozambique Logistica
- Bukit Baiduri Energy - Indonesia
- Bhoruka Overseas - Indonesia
- GVK Power & Infra Limited - India
- Intertek Mineral Services - Indonesia
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