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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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Tuesday, 28 January 14
RESOURCE NATIONALISM OR PROTECTIONISM FOR THE MINING AND EXTRACTIVES INDUSTRY - JOHN WHITTAKER & MICHAEL SWANGARD
Resource nationalism or protectionism for the mining and extractives industry as well as soft commodities sector and the oil industry.
‘Res ...
Tuesday, 28 January 14
DRY BULK SHIP OWNERS RETREAT TO OLD 'HABITS', REFUSING TO DEMOLISH OLD VESSELS, THREATENING MARKET RECOVERY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
If one thing is clear as we reflect on the 2013 shipping markets, it's that ship owners took advantage of low prices, in order to acquire newer ton ...
Monday, 27 January 14
MERCATOR SINGAPORE REPORTS 52% INCREASE IN EBITDA FOR Q3 FY 2014 AS COMPARED TO PREVIOUS QUARTER
COALspot.com: Mercator Lines (Singapore) Limited, a leading Indian-owned international dry bulk shipping company that operates a fleet of fourteen d ...
Monday, 27 January 14
13TH CLEAN COAL FORUM 2014
COALspot.com: (Press Release) - Produced by CDMC Events, The 13th Clean Coal Forum 2014 will be held on June 12 &13 2014 in Beijing, China. We a ...
Monday, 27 January 14
Q3 & Q4 API 8 CFR SOUTH CHINA COAL SWAPS CONTINUE TO REMAIN WEAK
COALspot.com: API 8 CFR South China Coal swaps for average Q1 14 delivery lost 4.45 percent month on month and closed at US$ 79.05 per mt as on Frid ...
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- Indonesian Coal Mining Association
- PTC India Limited - India
- ASAPP Information Group - India
- London Commodity Brokers - England
- Australian Coal Association
- Essar Steel Hazira Ltd - India
- Standard Chartered Bank - UAE
- Lanco Infratech Ltd - India
- Billiton Holdings Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Globalindo Alam Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Maharashtra Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Cement Manufacturers Association - India
- Alfred C Toepfer International GmbH - Germany
- Bhoruka Overseas - Indonesia
- Orica Mining Services - Indonesia
- Carbofer General Trading SA - India
- Makarim & Taira - Indonesia
- MS Steel International - UAE
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- Ministry of Mines - Canada
- Central Electricity Authority - India
- PowerSource Philippines DevCo
- International Coal Ventures Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- The University of Queensland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Interocean Group of Companies - India
- Deloitte Consulting - India
- Global Business Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Petron Corporation, Philippines
- New Zealand Coal & Carbon
- Kideco Jaya Agung - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Mercator Lines Limited - India
- Indogreen Group - Indonesia
- Singapore Mercantile Exchange
- Rio Tinto Coal - Australia
- Wilmar Investment Holdings
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Savvy Resources Ltd - HongKong
- Goldman Sachs - Singapore
- Aboitiz Power Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Simpson Spence & Young - Indonesia
- Orica Australia Pty. Ltd.
- Port Waratah Coal Services - Australia
- Planning Commission, India
- Madhucon Powers Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Central Java Power - Indonesia
- The State Trading Corporation of India Ltd
- Riau Bara Harum - Indonesia
- Ambuja Cements Ltd - India
- Wood Mackenzie - Singapore
- Edison Trading Spa - Italy
- Bharathi Cement Corporation - India
- SMG Consultants - Indonesia
- Larsen & Toubro Limited - India
- Ministry of Transport, Egypt
- IHS Mccloskey Coal Group - USA
- Karbindo Abesyapradhi - Indoneisa
- Altura Mining Limited, Indonesia
- Sical Logistics Limited - India
- Gujarat Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Global Green Power PLC Corporation, Philippines
- Attock Cement Pakistan Limited
- Manunggal Multi Energi - Indonesia
- Parliament of New Zealand
- Videocon Industries ltd - India
- Therma Luzon, Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- Coastal Gujarat Power Limited - India
- European Bulk Services B.V. - Netherlands
- Xindia Steels Limited - India
- Minerals Council of Australia
- Gujarat Sidhee Cement - India
- Intertek Mineral Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bayan Resources Tbk. - Indonesia
- Commonwealth Bank - Australia
- Medco Energi Mining Internasional
- VISA Power Limited - India
- Georgia Ports Authority, United States
- Sarangani Energy Corporation, Philippines
- Vedanta Resources Plc - India
- Bukit Baiduri Energy - Indonesia
- Romanian Commodities Exchange
- The Treasury - Australian Government
- PNOC Exploration Corporation - Philippines
- Siam City Cement - Thailand
- Kepco SPC Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Bulk Trading Sa - Switzerland
- Indika Energy - Indonesia
- Grasim Industreis Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Africa Commodities Group - South Africa
- Kalimantan Lumbung Energi - Indonesia
- Chamber of Mines of South Africa
- Aditya Birla Group - India
- OPG Power Generation Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- GVK Power & Infra Limited - India
- Latin American Coal - Colombia
- LBH Netherlands Bv - Netherlands
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- Salva Resources Pvt Ltd - India
- Energy Link Ltd, New Zealand
- TeaM Sual Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Heidelberg Cement - Germany
- Maheswari Brothers Coal Limited - India
- Krishnapatnam Port Company Ltd. - India
- Bhatia International Limited - India
- India Bulls Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Marubeni Corporation - India
- Indian Energy Exchange, India
- Barasentosa Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Pendopo Energi Batubara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Eastern Energy - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Mercuria Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Antam Resourcindo - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Power Finance Corporation Ltd., India
- Asmin Koalindo Tuhup - Indonesia
- Meralco Power Generation, Philippines
- CIMB Investment Bank - Malaysia
- Posco Energy - South Korea
- Merrill Lynch Commodities Europe
- Chettinad Cement Corporation Ltd - India
- Borneo Indobara - Indonesia
- Thiess Contractors Indonesia
- Bangladesh Power Developement Board
- Leighton Contractors Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Kapuas Tunggal Persada - Indonesia
- Trasteel International SA, Italy
- CNBM International Corporation - China
- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- Baramulti Group, Indonesia
- Anglo American - United Kingdom
- ICICI Bank Limited - India
- Timah Investasi Mineral - Indoneisa
- Thai Mozambique Logistica
- Kumho Petrochemical, South Korea
- PetroVietnam Power Coal Import and Supply Company
- Jindal Steel & Power Ltd - India
- Ministry of Finance - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Dalmia Cement Bharat India
- Coalindo Energy - Indonesia
- Sojitz Corporation - Japan
- AsiaOL BioFuels Corp., Philippines
- Oldendorff Carriers - Singapore
- Mintek Dendrill Indonesia
- Mjunction Services Limited - India
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- Star Paper Mills Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kobexindo Tractors - Indoneisa
- White Energy Company Limited
- GAC Shipping (India) Pvt Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coal and Oil Company - UAE
- Electricity Authority, New Zealand
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- San Jose City I Power Corp, Philippines
- Malabar Cements Ltd - India
- McConnell Dowell - Australia
- SN Aboitiz Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Banpu Public Company Limited - Thailand
- Sinarmas Energy and Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- Independent Power Producers Association of India
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMC Global Power, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Semirara Mining Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Development Corp, Philippines
- Tamil Nadu electricity Board
- Economic Council, Georgia
- Agrawal Coal Company - India
- Price Waterhouse Coopers - Russia
- Global Coal Blending Company Limited - Australia
- Kartika Selabumi Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Uttam Galva Steels Limited - India
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
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