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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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- Australian Commodity Traders Exchange
- Chettinad Cement Corporation Ltd - India
- Siam City Cement PLC, Thailand
- Karaikal Port Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Coastal Gujarat Power Limited - India
- GMR Energy Limited - India
- Meralco Power Generation, Philippines
- Orica Mining Services - Indonesia
- New Zealand Coal & Carbon
- Chamber of Mines of South Africa
- SMG Consultants - Indonesia
- Global Business Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- GVK Power & Infra Limited - India
- Sical Logistics Limited - India
- Indian Energy Exchange, India
- Samtan Co., Ltd - South Korea
- Planning Commission, India
- Eastern Coal Council - USA
- Bukit Makmur.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Bhatia International Limited - India
- Madhucon Powers Ltd - India
- TeaM Sual Corporation - Philippines
- Indogreen Group - Indonesia
- McConnell Dowell - Australia
- MS Steel International - UAE
- Coal and Oil Company - UAE
- Kalimantan Lumbung Energi - Indonesia
- Larsen & Toubro Limited - India
- Wilmar Investment Holdings
- Borneo Indobara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Singapore Mercantile Exchange
- Aboitiz Power Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Merrill Lynch Commodities Europe
- Eastern Energy - Thailand
- Makarim & Taira - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kumho Petrochemical, South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- Asmin Koalindo Tuhup - Indonesia
- Posco Energy - South Korea
- Aditya Birla Group - India
- Marubeni Corporation - India
- Banpu Public Company Limited - Thailand
- Manunggal Multi Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Standard Chartered Bank - UAE
- Indian Oil Corporation Limited
- Mercator Lines Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parliament of New Zealand
- Baramulti Group, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Deloitte Consulting - India
- Electricity Generating Authority of Thailand
- Wood Mackenzie - Singapore
- Minerals Council of Australia
- PNOC Exploration Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- Bhushan Steel Limited - India
- Ambuja Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- Sarangani Energy Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Agrawal Coal Company - India
- GN Power Mariveles Coal Plant, Philippines
- Romanian Commodities Exchange
- Sree Jayajothi Cements Limited - India
- Jindal Steel & Power Ltd - India
- Coalindo Energy - Indonesia
- Antam Resourcindo - Indonesia
- The State Trading Corporation of India Ltd
- Gujarat Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- OPG Power Generation Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ind-Barath Power Infra Limited - India
- Rio Tinto Coal - Australia
- Ministry of Mines - Canada
- AsiaOL BioFuels Corp., Philippines
- Medco Energi Mining Internasional
- GAC Shipping (India) Pvt Ltd
- Indika Energy - Indonesia
- Sakthi Sugars Limited - India
- Simpson Spence & Young - Indonesia
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- Ministry of Finance - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IHS Mccloskey Coal Group - USA
- VISA Power Limited - India
- Sindya Power Generating Company Private Ltd
- Semirara Mining Corp, Philippines
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- PetroVietnam Power Coal Import and Supply Company
- Electricity Authority, New Zealand
- International Coal Ventures Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Dalmia Cement Bharat India
- Ministry of Transport, Egypt
- Kartika Selabumi Mining - Indonesia
- Altura Mining Limited, Indonesia
- Independent Power Producers Association of India
- Bhoruka Overseas - Indonesia
- Orica Australia Pty. Ltd.
- Vizag Seaport Private Limited - India
- Kepco SPC Power Corporation, Philippines
- White Energy Company Limited
- Tamil Nadu electricity Board
- Essar Steel Hazira Ltd - India
- Binh Thuan Hamico - Vietnam
- Mjunction Services Limited - India
- The University of Queensland
- Economic Council, Georgia
- Petron Corporation, Philippines
- Star Paper Mills Limited - India
- Thiess Contractors Indonesia
- Trasteel International SA, Italy
- Global Green Power PLC Corporation, Philippines
- Videocon Industries ltd - India
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Anglo American - United Kingdom
- Lanco Infratech Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Thai Mozambique Logistica
- Directorate Of Revenue Intelligence - India
- Formosa Plastics Group - Taiwan
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
- India Bulls Power Limited - India
- Riau Bara Harum - Indonesia
- Bukit Baiduri Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Central Java Power - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Heidelberg Cement - Germany
- Karbindo Abesyapradhi - Indoneisa
- Maheswari Brothers Coal Limited - India
- Gujarat Sidhee Cement - India
- Attock Cement Pakistan Limited
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Meenaskhi Energy Private Limited - India
- IEA Clean Coal Centre - UK
- Edison Trading Spa - Italy
- Xindia Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Georgia Ports Authority, United States
- San Jose City I Power Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Uttam Galva Steels Limited - India
- Africa Commodities Group - South Africa
- Malabar Cements Ltd - India
- Oldendorff Carriers - Singapore
- Indonesian Coal Mining Association
- Pendopo Energi Batubara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Mintek Dendrill Indonesia
- Sojitz Corporation - Japan
- LBH Netherlands Bv - Netherlands
- Tata Chemicals Ltd - India
- PTC India Limited - India
- Cement Manufacturers Association - India
- CIMB Investment Bank - Malaysia
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- Intertek Mineral Services - Indonesia
- Power Finance Corporation Ltd., India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Leighton Contractors Pty Ltd - Australia
- Commonwealth Bank - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Interocean Group of Companies - India
- Maharashtra Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Siam City Cement - Thailand
- Holcim Trading Pte Ltd - Singapore
- SMC Global Power, Philippines
- Bangladesh Power Developement Board
- London Commodity Brokers - England
- Miang Besar Coal Terminal - Indonesia
- CNBM International Corporation - China
- Mercuria Energy - Indonesia
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