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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, 25 June 13
NEWCASTLE PORT SHIPPED OUT MORE COAL W-O-W
COALspot.com - Newcastle port in Australia has loaded 3,101,378 tons of coal for the week ended 0700 hours 24 June 2013, Newcastle Port Corp. ...
Monday, 24 June 13
INDONESIA COAL SWAP FOR AUGUST 2013 DELIVERY GAINS WEEK ON WEEK
COALspot.com – Coal prices for immediate supply contracts have started moving up, but prices for next year supply shows a negative trend ...
Sunday, 23 June 13
BDI CROSSED ITS PSYCHOLOGICAL BARRIER THIS WEEK - VISTAAR
COALspot.com : The BDI crossed the psychological barrier of 1000 points after many months and closed at 1,027 points, which were up by 14.11 pct wee ...
Sunday, 23 June 13
SHIP PRICES NOT FOLLOWING FREIGHT MARKET FUNDAMENTALS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Although it's been the case in many occasions in the past, it appears that ship prices haven't been quite following freight market fundamentals, i ...
Friday, 21 June 13
U.S. COAL PRODUCTION INCREASED WEEK ON WEEK, EIA SAYS
COALspot.com – United states the world’s second largest coal producer produced totalled approximately 19.70 million short tons (mmst) of ...
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- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- Commonwealth Bank - Australia
- Africa Commodities Group - South Africa
- Makarim & Taira - Indonesia
- The Treasury - Australian Government
- OPG Power Generation Pvt Ltd - India
- Coalindo Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Sarangani Energy Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Cement Manufacturers Association - India
- Mjunction Services Limited - India
- IEA Clean Coal Centre - UK
- Chettinad Cement Corporation Ltd - India
- Kideco Jaya Agung - Indonesia
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
- Electricity Authority, New Zealand
- Baramulti Group, Indonesia
- Star Paper Mills Limited - India
- ICICI Bank Limited - India
- Australian Coal Association
- Sree Jayajothi Cements Limited - India
- Simpson Spence & Young - Indonesia
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- Bhatia International Limited - India
- Essar Steel Hazira Ltd - India
- TeaM Sual Corporation - Philippines
- GMR Energy Limited - India
- New Zealand Coal & Carbon
- TNB Fuel Sdn Bhd - Malaysia
- Formosa Plastics Group - Taiwan
- Sinarmas Energy and Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- VISA Power Limited - India
- Energy Link Ltd, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Vizag Seaport Private Limited - India
- Straits Asia Resources Limited - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Eastern Coal Council - USA
- SMC Global Power, Philippines
- Timah Investasi Mineral - Indoneisa
- Bangladesh Power Developement Board
- Malabar Cements Ltd - India
- Lanco Infratech Ltd - India
- Toyota Tsusho Corporation, Japan
- Aboitiz Power Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Economic Council, Georgia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- MS Steel International - UAE
- Ministry of Finance - Indonesia
- Thiess Contractors Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Singapore Mercantile Exchange
- Bukit Makmur.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Anglo American - United Kingdom
- Chamber of Mines of South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Sindya Power Generating Company Private Ltd
- Sakthi Sugars Limited - India
- Pendopo Energi Batubara - Indonesia
- Agrawal Coal Company - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Electricity Authority - India
- Posco Energy - South Korea
- Ministry of Mines - Canada
- Bayan Resources Tbk. - Indonesia
- Bhoruka Overseas - Indonesia
- Coal and Oil Company - UAE
- Coastal Gujarat Power Limited - India
- International Coal Ventures Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Therma Luzon, Inc, Philippines
- Antam Resourcindo - Indonesia
- Merrill Lynch Commodities Europe
- PetroVietnam Power Coal Import and Supply Company
- Parry Sugars Refinery, India
- Rio Tinto Coal - Australia
- Larsen & Toubro Limited - India
- Australian Commodity Traders Exchange
- Sojitz Corporation - Japan
- San Jose City I Power Corp, Philippines
- South Luzon Thermal Energy Corporation
- Ministry of Transport, Egypt
- Heidelberg Cement - Germany
- Oldendorff Carriers - Singapore
- AsiaOL BioFuels Corp., Philippines
- Trasteel International SA, Italy
- Indian Energy Exchange, India
- Petron Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Attock Cement Pakistan Limited
- ASAPP Information Group - India
- Jorong Barutama Greston.PT - Indonesia
- Meralco Power Generation, Philippines
- SN Aboitiz Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Indian Oil Corporation Limited
- Deloitte Consulting - India
- Savvy Resources Ltd - HongKong
- Meenaskhi Energy Private Limited - India
- Videocon Industries ltd - India
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- Thai Mozambique Logistica
- Barasentosa Lestari - Indonesia
- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
- Xindia Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Wood Mackenzie - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Riau Bara Harum - Indonesia
- Tata Chemicals Ltd - India
- Indogreen Group - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Indonesian Coal Mining Association
- Independent Power Producers Association of India
- PowerSource Philippines DevCo
- Altura Mining Limited, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Parliament of New Zealand
- Ind-Barath Power Infra Limited - India
- Maheswari Brothers Coal Limited - India
- The University of Queensland
- Kumho Petrochemical, South Korea
- Directorate Of Revenue Intelligence - India
- LBH Netherlands Bv - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ambuja Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Carbofer General Trading SA - India
- Latin American Coal - Colombia
- Asmin Koalindo Tuhup - Indonesia
- Bukit Baiduri Energy - Indonesia
- Georgia Ports Authority, United States
- Indo Tambangraya Megah - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Grasim Industreis Ltd - India
- Bharathi Cement Corporation - India
- The State Trading Corporation of India Ltd
- Edison Trading Spa - Italy
- Krishnapatnam Port Company Ltd. - India
- Marubeni Corporation - India
- Rashtriya Ispat Nigam Limited - India
- Orica Australia Pty. Ltd.
- Romanian Commodities Exchange
- Planning Commission, India
- Gujarat Sidhee Cement - India
- SMG Consultants - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- IHS Mccloskey Coal Group - USA
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Java Power - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- PTC India Limited - India
- Tamil Nadu electricity Board
- Wilmar Investment Holdings
- Billiton Holdings Pty Ltd - Australia
- Interocean Group of Companies - India
- Goldman Sachs - Singapore
- Siam City Cement PLC, Thailand
- Jindal Steel & Power Ltd - India
- Banpu Public Company Limited - Thailand
- Mercuria Energy - Indonesia
- Siam City Cement - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Energy - Thailand
- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
- Renaissance Capital - South Africa
- Global Business Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- India Bulls Power Limited - India
- Dalmia Cement Bharat India
- White Energy Company Limited
- Holcim Trading Pte Ltd - Singapore
- Ceylon Electricity Board - Sri Lanka
- Price Waterhouse Coopers - Russia
- Port Waratah Coal Services - Australia
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Indika Energy - Indonesia
- McConnell Dowell - Australia
- Mercator Lines Limited - India
- Mintek Dendrill Indonesia
- Energy Development Corp, Philippines
- Aditya Birla Group - India
- GVK Power & Infra Limited - India
- Sical Logistics Limited - India
- Uttam Galva Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Directorate General of MIneral and Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Minerals Council of Australia
- GAC Shipping (India) Pvt Ltd
- Kobexindo Tractors - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
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