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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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Thursday, 09 May 13
KILLARA AUSTRALIA ACQUIRES 80% INTEREST IN BORNEO EMAS HITAM
COALspot.com - Killara Resources has announced that, the company has signed a binding MoU to acquire an 80% equity interest in PT. Borneo Emas Hitam ...
Thursday, 09 May 13
THE WORLD LARGEST POWER PLANT COAL EXPORTER SHIPPED 36 MILLION TONS OF COAL IN MARCH
COALspot.com: Indonesia, the world largest multi grade coal exporter has shipped 36.165* million tons of coal in March 2013.
Ac ...
Thursday, 09 May 13
DRY BULK SHIP OWNERS KEEP BUILDING NEW VESSELS ON THE BACK OF LOWER PRICES AND IMPROVED MARKET PROSPECTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Despite the doom and gloom that the dry bulk market has experienced during the past couple of years and especially during 2012, ship owners have inc ...
Thursday, 09 May 13
HANDY : RBCT ROUNDS FIXED AT USD 8000 DOP ECI - FEARNRESEARCH
Handy
The atlantic market started to pick up with new orders. The USG-Feast was at USD 20k and Black sea-feast was at USD 12k. The pacific mkt rema ...
Wednesday, 08 May 13
PANAMAX VESSELS PROVE TO BE "STARS OF THE MONTH" FOR THE DRY BULK MARKET DURING APRIL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
They have taken a beating on various occasions during the past few years of the dry bulk market's crisis, but the fact remains, that despite the he ...
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- Africa Commodities Group - South Africa
- SN Aboitiz Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- The Treasury - Australian Government
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Finance - Indonesia
- ICICI Bank Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- CNBM International Corporation - China
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PowerSource Philippines DevCo
- Asmin Koalindo Tuhup - Indonesia
- Chettinad Cement Corporation Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Wood Mackenzie - Singapore
- McConnell Dowell - Australia
- Posco Energy - South Korea
- Barasentosa Lestari - Indonesia
- Energy Link Ltd, New Zealand
- PTC India Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Kepco SPC Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Iligan Light & Power Inc, Philippines
- Interocean Group of Companies - India
- European Bulk Services B.V. - Netherlands
- Bhoruka Overseas - Indonesia
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Heidelberg Cement - Germany
- GN Power Mariveles Coal Plant, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- Electricity Generating Authority of Thailand
- Orica Australia Pty. Ltd.
- Indika Energy - Indonesia
- Madhucon Powers Ltd - India
- Price Waterhouse Coopers - Russia
- Energy Development Corp, Philippines
- Attock Cement Pakistan Limited
- Kaltim Prima Coal - Indonesia
- Indonesian Coal Mining Association
- Star Paper Mills Limited - India
- Makarim & Taira - Indonesia
- Sindya Power Generating Company Private Ltd
- Antam Resourcindo - Indonesia
- Standard Chartered Bank - UAE
- Singapore Mercantile Exchange
- VISA Power Limited - India
- Australian Coal Association
- Marubeni Corporation - India
- SMC Global Power, Philippines
- Bukit Baiduri Energy - Indonesia
- Petron Corporation, Philippines
- Goldman Sachs - Singapore
- Kapuas Tunggal Persada - Indonesia
- Bukit Makmur.PT - Indonesia
- Simpson Spence & Young - Indonesia
- International Coal Ventures Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- Larsen & Toubro Limited - India
- Central Java Power - Indonesia
- Deloitte Consulting - India
- Bayan Resources Tbk. - Indonesia
- MS Steel International - UAE
- San Jose City I Power Corp, Philippines
- Rio Tinto Coal - Australia
- Uttam Galva Steels Limited - India
- Tamil Nadu electricity Board
- Thiess Contractors Indonesia
- Port Waratah Coal Services - Australia
- Thai Mozambique Logistica
- Chamber of Mines of South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Bhatia International Limited - India
- Lanco Infratech Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Coastal Gujarat Power Limited - India
- Parry Sugars Refinery, India
- Aditya Birla Group - India
- Kartika Selabumi Mining - Indonesia
- Ambuja Cements Ltd - India
- Economic Council, Georgia
- IHS Mccloskey Coal Group - USA
- CIMB Investment Bank - Malaysia
- Straits Asia Resources Limited - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indogreen Group - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Anglo American - United Kingdom
- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- Banpu Public Company Limited - Thailand
- Central Electricity Authority - India
- PNOC Exploration Corporation - Philippines
- Altura Mining Limited, Indonesia
- Oldendorff Carriers - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Coal and Oil Company - UAE
- GAC Shipping (India) Pvt Ltd
- Mercuria Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Planning Commission, India
- Riau Bara Harum - Indonesia
- Vedanta Resources Plc - India
- Jindal Steel & Power Ltd - India
- Bharathi Cement Corporation - India
- Dalmia Cement Bharat India
- Trasteel International SA, Italy
- Videocon Industries ltd - India
- India Bulls Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Mines - Canada
- Global Business Power Corporation, Philippines
- Sical Logistics Limited - India
- ASAPP Information Group - India
- Global Green Power PLC Corporation, Philippines
- Meralco Power Generation, Philippines
- Latin American Coal - Colombia
- Tata Chemicals Ltd - India
- Mjunction Services Limited - India
- The University of Queensland
- Mintek Dendrill Indonesia
- Kumho Petrochemical, South Korea
- Medco Energi Mining Internasional
- Coalindo Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Indian Energy Exchange, India
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- Commonwealth Bank - Australia
- Miang Besar Coal Terminal - Indonesia
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Vizag Seaport Private Limited - India
- Formosa Plastics Group - Taiwan
- TeaM Sual Corporation - Philippines
- London Commodity Brokers - England
- Toyota Tsusho Corporation, Japan
- The State Trading Corporation of India Ltd
- Sakthi Sugars Limited - India
- Timah Investasi Mineral - Indoneisa
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- Maharashtra Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- IEA Clean Coal Centre - UK
- Romanian Commodities Exchange
- Indo Tambangraya Megah - Indonesia
- Globalindo Alam Lestari - Indonesia
- SMG Consultants - Indonesia
- South Luzon Thermal Energy Corporation
- Karbindo Abesyapradhi - Indoneisa
- Georgia Ports Authority, United States
- Karaikal Port Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Renaissance Capital - South Africa
- OPG Power Generation Pvt Ltd - India
- New Zealand Coal & Carbon
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bulk Trading Sa - Switzerland
- Xindia Steels Limited - India
- Indian Oil Corporation Limited
- Siam City Cement PLC, Thailand
- White Energy Company Limited
- Intertek Mineral Services - Indonesia
- Borneo Indobara - Indonesia
- Semirara Mining Corp, Philippines
- Ministry of Transport, Egypt
- Rashtriya Ispat Nigam Limited - India
- Australian Commodity Traders Exchange
- Essar Steel Hazira Ltd - India
- Minerals Council of Australia
- Orica Mining Services - Indonesia
- Merrill Lynch Commodities Europe
- Grasim Industreis Ltd - India
- Global Coal Blending Company Limited - Australia
- Bangladesh Power Developement Board
- Jaiprakash Power Ventures ltd
- Bhushan Steel Limited - India
- GVK Power & Infra Limited - India
- Electricity Authority, New Zealand
- Eastern Coal Council - USA
- Parliament of New Zealand
- Maheswari Brothers Coal Limited - India
- Gujarat Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Kobexindo Tractors - Indoneisa
- Meenaskhi Energy Private Limited - India
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Agrawal Coal Company - India
- Samtan Co., Ltd - South Korea
- Kideco Jaya Agung - Indonesia
- Independent Power Producers Association of India
- Metalloyd Limited - United Kingdom
- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Sidhee Cement - India
- Directorate Of Revenue Intelligence - India
- Ind-Barath Power Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- GMR Energy Limited - India
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