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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, 01 January 14
COAL & OIL TO SET UP ANOTHER 1,600 MW POWER PLANT IN INDIA - VENKATARAMANI
COALspot.com: Dubai-based Coal & Oil (C&O) Group is planning to make additional investment of around US$ 1.61 billion to set up 1,600 mega w ...
Wednesday, 01 January 14
DRY BULK CARRIER OWNERS ANTICIPATING AN EVEN STRONGER 2014 YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
To begin with, The Hellenic Shipping News Worldwide team would like to wish you all a Happy and Prosperous 2014! We begin the New Year with our firs ...
Tuesday, 31 December 13
INDONESIA'S COAL PRODUCTION COULD HIT 450 MMT IN 2014 - ICMA
COALspot.com: Indonesia, the fourth largest coal producer and largest coal exporter in the world, to increase coal output in year 2014 instead of th ...
Tuesday, 31 December 13
U.S. COAL PRODUCTION INCREASED WEEK ON WEEK, EIA SAYS
COALspot.com – United States the world’s second largest coal producer, produced approximately 19.5 million short tons (mmst) of coal in ...
Tuesday, 31 December 13
MORE THAN $21 BILLION INVESTED IN SECOND HAND SHIP PURCHASES IN 2013
One thing that was apparent in the sale and purchasing markets during 2013 was the ship owners' larger appetite for vessel acquisitions, as most so ...
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- Kohat Cement Company Ltd. - Pakistan
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- Aboitiz Power Corporation - Philippines
- Coal and Oil Company - UAE
- Antam Resourcindo - Indonesia
- Petron Corporation, Philippines
- Bharathi Cement Corporation - India
- Australian Coal Association
- Tata Chemicals Ltd - India
- Bhatia International Limited - India
- Malabar Cements Ltd - India
- Jindal Steel & Power Ltd - India
- Carbofer General Trading SA - India
- Holcim Trading Pte Ltd - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GAC Shipping (India) Pvt Ltd
- Salva Resources Pvt Ltd - India
- CNBM International Corporation - China
- Videocon Industries ltd - India
- GVK Power & Infra Limited - India
- Meralco Power Generation, Philippines
- Maheswari Brothers Coal Limited - India
- Bulk Trading Sa - Switzerland
- Vedanta Resources Plc - India
- Tamil Nadu electricity Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kobexindo Tractors - Indoneisa
- Altura Mining Limited, Indonesia
- Ministry of Finance - Indonesia
- Toyota Tsusho Corporation, Japan
- Singapore Mercantile Exchange
- VISA Power Limited - India
- Orica Australia Pty. Ltd.
- Barasentosa Lestari - Indonesia
- Dalmia Cement Bharat India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Xindia Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- ICICI Bank Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- Port Waratah Coal Services - Australia
- Bhoruka Overseas - Indonesia
- Power Finance Corporation Ltd., India
- Metalloyd Limited - United Kingdom
- Global Coal Blending Company Limited - Australia
- Wood Mackenzie - Singapore
- Eastern Coal Council - USA
- Pipit Mutiara Jaya. PT, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Central Electricity Authority - India
- Sarangani Energy Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Australian Commodity Traders Exchange
- Price Waterhouse Coopers - Russia
- PetroVietnam Power Coal Import and Supply Company
- Banpu Public Company Limited - Thailand
- Manunggal Multi Energi - Indonesia
- Simpson Spence & Young - Indonesia
- Indo Tambangraya Megah - Indonesia
- The Treasury - Australian Government
- Economic Council, Georgia
- South Luzon Thermal Energy Corporation
- Trasteel International SA, Italy
- The State Trading Corporation of India Ltd
- Sree Jayajothi Cements Limited - India
- Electricity Authority, New Zealand
- Timah Investasi Mineral - Indoneisa
- PowerSource Philippines DevCo
- Gujarat Sidhee Cement - India
- Indian Energy Exchange, India
- Kepco SPC Power Corporation, Philippines
- Ambuja Cements Ltd - India
- London Commodity Brokers - England
- European Bulk Services B.V. - Netherlands
- Bukit Makmur.PT - Indonesia
- Heidelberg Cement - Germany
- Mintek Dendrill Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Pendopo Energi Batubara - Indonesia
- Siam City Cement - Thailand
- LBH Netherlands Bv - Netherlands
- GMR Energy Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Parliament of New Zealand
- Oldendorff Carriers - Singapore
- Vizag Seaport Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- San Jose City I Power Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Development Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Central Java Power - Indonesia
- Larsen & Toubro Limited - India
- Coalindo Energy - Indonesia
- Orica Mining Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Uttam Galva Steels Limited - India
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- MS Steel International - UAE
- Cigading International Bulk Terminal - Indonesia
- Indogreen Group - Indonesia
- Agrawal Coal Company - India
- McConnell Dowell - Australia
- CIMB Investment Bank - Malaysia
- Kartika Selabumi Mining - Indonesia
- SMC Global Power, Philippines
- Sakthi Sugars Limited - India
- Minerals Council of Australia
- Latin American Coal - Colombia
- Global Green Power PLC Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Cement Manufacturers Association - India
- Sindya Power Generating Company Private Ltd
- Global Business Power Corporation, Philippines
- Attock Cement Pakistan Limited
- IHS Mccloskey Coal Group - USA
- Gujarat Mineral Development Corp Ltd - India
- Romanian Commodities Exchange
- Anglo American - United Kingdom
- Ministry of Transport, Egypt
- Indian Oil Corporation Limited
- Mercuria Energy - Indonesia
- Parry Sugars Refinery, India
- Straits Asia Resources Limited - Singapore
- Binh Thuan Hamico - Vietnam
- Coastal Gujarat Power Limited - India
- Goldman Sachs - Singapore
- Standard Chartered Bank - UAE
- Essar Steel Hazira Ltd - India
- Thiess Contractors Indonesia
- Medco Energi Mining Internasional
- Lanco Infratech Ltd - India
- PTC India Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Kideco Jaya Agung - Indonesia
- Commonwealth Bank - Australia
- OPG Power Generation Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- ASAPP Information Group - India
- Kaltim Prima Coal - Indonesia
- The University of Queensland
- Jorong Barutama Greston.PT - Indonesia
- Chamber of Mines of South Africa
- Baramulti Group, Indonesia
- Madhucon Powers Ltd - India
- Kapuas Tunggal Persada - Indonesia
- White Energy Company Limited
- Indika Energy - Indonesia
- SMG Consultants - Indonesia
- Mercator Lines Limited - India
- Globalindo Alam Lestari - Indonesia
- Georgia Ports Authority, United States
- Renaissance Capital - South Africa
- Planning Commission, India
- Iligan Light & Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Posco Energy - South Korea
- Bhushan Steel Limited - India
- Aditya Birla Group - India
- Africa Commodities Group - South Africa
- Borneo Indobara - Indonesia
- India Bulls Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Krishnapatnam Port Company Ltd. - India
- Meenaskhi Energy Private Limited - India
- Thai Mozambique Logistica
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Generating Authority of Thailand
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- New Zealand Coal & Carbon
- Edison Trading Spa - Italy
- Jaiprakash Power Ventures ltd
- Samtan Co., Ltd - South Korea
- Bukit Baiduri Energy - Indonesia
- IEA Clean Coal Centre - UK
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining and Power Corporation, Philippines
- Indonesian Coal Mining Association
- Sinarmas Energy and Mining - Indonesia
- Makarim & Taira - Indonesia
- Sical Logistics Limited - India
- Gujarat Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- Mjunction Services Limited - India
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- Star Paper Mills Limited - India
- Bangladesh Power Developement Board
- Semirara Mining Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- Deloitte Consulting - India
- Ministry of Mines - Canada
- Wilmar Investment Holdings
- Siam City Cement PLC, Thailand
- Rio Tinto Coal - Australia
- Merrill Lynch Commodities Europe
- Formosa Plastics Group - Taiwan
- TeaM Sual Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Interocean Group of Companies - India
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