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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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Monday, 28 January 13
BAYAN RESOURCES TO SELL 18 MILLION TONS OF COAL TO GNPOWER MARIVELES COAL PLANT
Publicly-listed PT Bayan Resources announced on Friday that it had signed an agreement on coal sales with Philippine-based GNPower Mariveles Coal Pl ...
Sunday, 27 January 13
CFR SOUTH CHINA COAL SWAPS: WEAK
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q1’ 2013 delivery has gained 0.31 percent and CFR South China coal shipment&nbs ...
Sunday, 27 January 13
FREIGHT MARKET: FLAT TO SOFT - VISTAAR
COALspot.com - The freight market was soft and all the indices were down except for handy size.
The BDI was down 4.66 pct closing at 798 points.. ...
Friday, 25 January 13
BOTSWANA GOVERNMENT GRANTS COAL LICENSES TO A-CAP RESOURCES LIMITED
A-Cap Resources Limited has announced that it has been granted coal rights within its Bolau tenements which sit next to the Sese Coal and Power Proj ...
Friday, 25 January 13
SMALL ROOM FOR OPTIMISM FOR THE PROSPECTS OF THE DRY BULK MARKET AS NET FLEET GROWTH IS SLOWING DOWN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite the fact that the dry bulk market didn't manage to post a rebound during the past year, quite the opposite, as a fast fleet growth and slow ...
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- Borneo Indobara - Indonesia
- Global Business Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- SMC Global Power, Philippines
- Sree Jayajothi Cements Limited - India
- Bhatia International Limited - India
- Bayan Resources Tbk. - Indonesia
- VISA Power Limited - India
- Agrawal Coal Company - India
- International Coal Ventures Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Development Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Australian Coal Association
- Kideco Jaya Agung - Indonesia
- Alfred C Toepfer International GmbH - Germany
- PNOC Exploration Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Formosa Plastics Group - Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Orica Australia Pty. Ltd.
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Coastal Gujarat Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- Kalimantan Lumbung Energi - Indonesia
- Sojitz Corporation - Japan
- Savvy Resources Ltd - HongKong
- India Bulls Power Limited - India
- LBH Netherlands Bv - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Baiduri Energy - Indonesia
- Star Paper Mills Limited - India
- Independent Power Producers Association of India
- Simpson Spence & Young - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Coalindo Energy - Indonesia
- Dalmia Cement Bharat India
- Planning Commission, India
- Power Finance Corporation Ltd., India
- Price Waterhouse Coopers - Russia
- PetroVietnam Power Coal Import and Supply Company
- Maharashtra Electricity Regulatory Commission - India
- Aditya Birla Group - India
- San Jose City I Power Corp, Philippines
- Edison Trading Spa - Italy
- European Bulk Services B.V. - Netherlands
- Therma Luzon, Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Attock Cement Pakistan Limited
- Baramulti Group, Indonesia
- MS Steel International - UAE
- Siam City Cement PLC, Thailand
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- Chamber of Mines of South Africa
- Billiton Holdings Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Grasim Industreis Ltd - India
- Bhushan Steel Limited - India
- Toyota Tsusho Corporation, Japan
- Indian Energy Exchange, India
- Sindya Power Generating Company Private Ltd
- Gujarat Mineral Development Corp Ltd - India
- Straits Asia Resources Limited - Singapore
- Global Coal Blending Company Limited - Australia
- Ministry of Finance - Indonesia
- Deloitte Consulting - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercuria Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kobexindo Tractors - Indoneisa
- Uttam Galva Steels Limited - India
- Commonwealth Bank - Australia
- Latin American Coal - Colombia
- Electricity Authority, New Zealand
- Samtan Co., Ltd - South Korea
- Leighton Contractors Pty Ltd - Australia
- Indika Energy - Indonesia
- Metalloyd Limited - United Kingdom
- The State Trading Corporation of India Ltd
- Sical Logistics Limited - India
- Malabar Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Central Java Power - Indonesia
- Parry Sugars Refinery, India
- Electricity Generating Authority of Thailand
- New Zealand Coal & Carbon
- Mercator Lines Limited - India
- Miang Besar Coal Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- Parliament of New Zealand
- Ministry of Transport, Egypt
- London Commodity Brokers - England
- The University of Queensland
- Salva Resources Pvt Ltd - India
- McConnell Dowell - Australia
- Chettinad Cement Corporation Ltd - India
- Merrill Lynch Commodities Europe
- Antam Resourcindo - Indonesia
- Ambuja Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Standard Chartered Bank - UAE
- Aboitiz Power Corporation - Philippines
- Carbofer General Trading SA - India
- Holcim Trading Pte Ltd - Singapore
- PowerSource Philippines DevCo
- Africa Commodities Group - South Africa
- Anglo American - United Kingdom
- CNBM International Corporation - China
- GMR Energy Limited - India
- Videocon Industries ltd - India
- Thai Mozambique Logistica
- Neyveli Lignite Corporation Ltd, - India
- Orica Mining Services - Indonesia
- Oldendorff Carriers - Singapore
- Posco Energy - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Directorate Of Revenue Intelligence - India
- Georgia Ports Authority, United States
- Singapore Mercantile Exchange
- Bulk Trading Sa - Switzerland
- Makarim & Taira - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Banpu Public Company Limited - Thailand
- Energy Link Ltd, New Zealand
- Eastern Energy - Thailand
- Mjunction Services Limited - India
- Krishnapatnam Port Company Ltd. - India
- Jaiprakash Power Ventures ltd
- Semirara Mining Corp, Philippines
- Xindia Steels Limited - India
- Riau Bara Harum - Indonesia
- Binh Thuan Hamico - Vietnam
- GAC Shipping (India) Pvt Ltd
- Ceylon Electricity Board - Sri Lanka
- Rio Tinto Coal - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Central Electricity Authority - India
- Trasteel International SA, Italy
- Gujarat Sidhee Cement - India
- TeaM Sual Corporation - Philippines
- Romanian Commodities Exchange
- Manunggal Multi Energi - Indonesia
- SMG Consultants - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Altura Mining Limited, Indonesia
- Goldman Sachs - Singapore
- Meralco Power Generation, Philippines
- Marubeni Corporation - India
- Bukit Makmur.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- PTC India Limited - India
- Indonesian Coal Mining Association
- Barasentosa Lestari - Indonesia
- Wood Mackenzie - Singapore
- Wilmar Investment Holdings
- Larsen & Toubro Limited - India
- Petron Corporation, Philippines
- Interocean Group of Companies - India
- Sakthi Sugars Limited - India
- Heidelberg Cement - Germany
- Karbindo Abesyapradhi - Indoneisa
- Thiess Contractors Indonesia
- The Treasury - Australian Government
- Global Green Power PLC Corporation, Philippines
- Indogreen Group - Indonesia
- Minerals Council of Australia
- Cement Manufacturers Association - India
- CIMB Investment Bank - Malaysia
- White Energy Company Limited
- Indian Oil Corporation Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GVK Power & Infra Limited - India
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- Timah Investasi Mineral - Indoneisa
- Maheswari Brothers Coal Limited - India
- IHS Mccloskey Coal Group - USA
- Kepco SPC Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Ministry of Mines - Canada
- Meenaskhi Energy Private Limited - India
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Economic Council, Georgia
- Kumho Petrochemical, South Korea
- Bangladesh Power Developement Board
- Vedanta Resources Plc - India
- Lanco Infratech Ltd - India
- Siam City Cement - Thailand
- Medco Energi Mining Internasional
- TNB Fuel Sdn Bhd - Malaysia
- Sarangani Energy Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- ICICI Bank Limited - India
- Eastern Coal Council - USA
- OPG Power Generation Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Indo Tambangraya Megah - Indonesia
- Australian Commodity Traders Exchange
- Madhucon Powers Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Kohat Cement Company Ltd. - Pakistan
- ASAPP Information Group - India
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