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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, 07 August 13
HANDIES : FINDING IT DIFFICULT TO SUSTAIN THEIR PREVIOUS LEVELS - KONSTANTINOS KONTOMICHIS
Broker's insight
by Konstantinos Kontomichis,
SnP Broker
Entering the most predictable month of the year, as expected the seasonal effects ha ...
Tuesday, 06 August 13
UNLEASHING SHALE GAS POTENTIAL AS A GLOBAL ENERGY GAME CHANGER
In its 4th year running, the Annual Shale Gas Conference will bring leaders from North American shale gas operators, key Asian regulators, multi ...
Tuesday, 06 August 13
GBCE APPOINTS BENJAMIN WILEY AS NEW MANAGING DIRECTOR
COALspot.com : GB Clean Energy Ltd. (GBCE) announced today that Mr. Benjamin Wiley has been appointed as Managing Director.
Mr. Wiley has ...
Tuesday, 06 August 13
AUSTRALIAN NEWCASTLE PORT'S COAL EXPORTS FALL 23.16 PERCENT ON WEEK TO 2.26 MMT
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port fell 15.8 percent week on week to 2.26 million mt for ...
Monday, 05 August 13
PAPERLESS TRADING (ELECTRONIC BILLS OF LADING) - FREQUENTLY ASKED QUESTIONS ("FAQS") - UK P&I CLUB
A number of Members have contacted the Club with queries regarding the use of electronic bills of lading and any potential consequences for P&I ...
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- Thiess Contractors Indonesia
- Gujarat Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Aboitiz Power Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Coalindo Energy - Indonesia
- Videocon Industries ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Deloitte Consulting - India
- TeaM Sual Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Ambuja Cements Ltd - India
- Central Electricity Authority - India
- Trasteel International SA, Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Mining Services - Indonesia
- Bhoruka Overseas - Indonesia
- Semirara Mining Corp, Philippines
- Vizag Seaport Private Limited - India
- Vedanta Resources Plc - India
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- IHS Mccloskey Coal Group - USA
- Vijayanagar Sugar Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Cement Manufacturers Association - India
- Metalloyd Limited - United Kingdom
- Singapore Mercantile Exchange
- Savvy Resources Ltd - HongKong
- Altura Mining Limited, Indonesia
- Sree Jayajothi Cements Limited - India
- The University of Queensland
- Energy Link Ltd, New Zealand
- Attock Cement Pakistan Limited
- Directorate General of MIneral and Coal - Indonesia
- Agrawal Coal Company - India
- Bangladesh Power Developement Board
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement PLC, Thailand
- Edison Trading Spa - Italy
- Dalmia Cement Bharat India
- ICICI Bank Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Carbofer General Trading SA - India
- Planning Commission, India
- Toyota Tsusho Corporation, Japan
- Karaikal Port Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Australian Commodity Traders Exchange
- Economic Council, Georgia
- AsiaOL BioFuels Corp., Philippines
- Indogreen Group - Indonesia
- Ministry of Finance - Indonesia
- Eastern Coal Council - USA
- Karbindo Abesyapradhi - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Kumho Petrochemical, South Korea
- LBH Netherlands Bv - Netherlands
- New Zealand Coal & Carbon
- Sojitz Corporation - Japan
- Therma Luzon, Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- SMC Global Power, Philippines
- Merrill Lynch Commodities Europe
- Essar Steel Hazira Ltd - India
- Energy Development Corp, Philippines
- Kideco Jaya Agung - Indonesia
- PTC India Limited - India
- Price Waterhouse Coopers - Russia
- Pendopo Energi Batubara - Indonesia
- Jindal Steel & Power Ltd - India
- Parliament of New Zealand
- PNOC Exploration Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Borneo Indobara - Indonesia
- Mercuria Energy - Indonesia
- Latin American Coal - Colombia
- Eastern Energy - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ind-Barath Power Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- OPG Power Generation Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Madhucon Powers Ltd - India
- International Coal Ventures Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Meralco Power Generation, Philippines
- Ministry of Transport, Egypt
- Straits Asia Resources Limited - Singapore
- Bharathi Cement Corporation - India
- Interocean Group of Companies - India
- White Energy Company Limited
- Bhatia International Limited - India
- Heidelberg Cement - Germany
- Australian Coal Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- Sarangani Energy Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Kepco SPC Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Marubeni Corporation - India
- PowerSource Philippines DevCo
- Ministry of Mines - Canada
- Renaissance Capital - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mjunction Services Limited - India
- Timah Investasi Mineral - Indoneisa
- Barasentosa Lestari - Indonesia
- Xindia Steels Limited - India
- SMG Consultants - Indonesia
- Kobexindo Tractors - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Sical Logistics Limited - India
- Globalindo Alam Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Africa Commodities Group - South Africa
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- South Luzon Thermal Energy Corporation
- Aditya Birla Group - India
- Kapuas Tunggal Persada - Indonesia
- Georgia Ports Authority, United States
- Indian Oil Corporation Limited
- Petrochimia International Co. Ltd.- Taiwan
- SN Aboitiz Power Inc, Philippines
- GVK Power & Infra Limited - India
- Posco Energy - South Korea
- Indian Energy Exchange, India
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- Grasim Industreis Ltd - India
- Medco Energi Mining Internasional
- Maharashtra Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Intertek Mineral Services - Indonesia
- Minerals Council of Australia
- London Commodity Brokers - England
- Kartika Selabumi Mining - Indonesia
- Commonwealth Bank - Australia
- Bulk Trading Sa - Switzerland
- Semirara Mining and Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement - Thailand
- Global Business Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Iligan Light & Power Inc, Philippines
- Standard Chartered Bank - UAE
- Star Paper Mills Limited - India
- Bhushan Steel Limited - India
- Wilmar Investment Holdings
- Pipit Mutiara Jaya. PT, Indonesia
- Mintek Dendrill Indonesia
- Goldman Sachs - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Lanco Infratech Ltd - India
- Bukit Baiduri Energy - Indonesia
- Tata Chemicals Ltd - India
- Parry Sugars Refinery, India
- Anglo American - United Kingdom
- Electricity Authority, New Zealand
- GMR Energy Limited - India
- Indonesian Coal Mining Association
- India Bulls Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- Sakthi Sugars Limited - India
- Thai Mozambique Logistica
- Chamber of Mines of South Africa
- The State Trading Corporation of India Ltd
- Indo Tambangraya Megah - Indonesia
- Coal and Oil Company - UAE
- VISA Power Limited - India
- Jaiprakash Power Ventures ltd
- IEA Clean Coal Centre - UK
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Simpson Spence & Young - Indonesia
- Sindya Power Generating Company Private Ltd
- Mercator Lines Limited - India
- The Treasury - Australian Government
- Indika Energy - Indonesia
- ASAPP Information Group - India
- Malabar Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Larsen & Toubro Limited - India
- Romanian Commodities Exchange
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Orica Australia Pty. Ltd.
- McConnell Dowell - Australia
- Independent Power Producers Association of India
- GN Power Mariveles Coal Plant, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Rio Tinto Coal - Australia
- Meenaskhi Energy Private Limited - India
- Baramulti Group, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Samtan Co., Ltd - South Korea
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