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