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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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Sunday, 20 January 13
Q1 & Q4 SUB-BIT FOB INDONESIA COAL SWAPS: FIRM
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) and CFR South China coal shipment for average Q1’ 2013 delivery have gained 0.81percent and ...
Sunday, 20 January 13
S7 & S8 ROUTE FREIGHT TREND IS EXPECTED TO BE FLAT TO SOFT THIS WEEK - VISTAAR
COALspot.com - The freight market was fairly steady with all the indices BDI up by 9.21 pct closing at 837 points. The Cape index was also sharply u ...
Friday, 18 January 13
NEWLEAD HOLDINGS LTD. TO ACQUIRE TWO COAL PROPERTIES WITH ESTIMATED COAL RESERVES OF 18.6 MMT & 143.1 MMT
NewLead Holdings Ltd. Announces Signing Agreement to Acquire Properties with Estimated Coal Reserves of 18.6 Million Tons; Signing Agreement to Acqu ...
Friday, 18 January 13
DRY BULK MARKET ON THE RISE, ON STRONG DEMAND FOR CAPESIZE VESSELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has continued its climbing trend yesterday, as the industry's benchmark, the Baltic Dry Index (BDI) was up by 39 points to 820. ...
Friday, 18 January 13
CAPESIZE : SIGNALS ARE MIXED BUT THE OVERALL TENDENCY IS POSITIVE - FEARNLEYS
Handy
The Atlantic market remained stable with USG-Feast fixed around USD 17k, according to fearnleys’s weekly report.
Continent / Medite ...
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- Ind-Barath Power Infra Limited - India
- Riau Bara Harum - Indonesia
- Power Finance Corporation Ltd., India
- GMR Energy Limited - India
- Meralco Power Generation, Philippines
- Formosa Plastics Group - Taiwan
- Bayan Resources Tbk. - Indonesia
- Semirara Mining Corp, Philippines
- Sojitz Corporation - Japan
- Carbofer General Trading SA - India
- Maharashtra Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Manunggal Multi Energi - Indonesia
- PowerSource Philippines DevCo
- Minerals Council of Australia
- Siam City Cement PLC, Thailand
- IEA Clean Coal Centre - UK
- Tamil Nadu electricity Board
- Chettinad Cement Corporation Ltd - India
- Intertek Mineral Services - Indonesia
- Essar Steel Hazira Ltd - India
- Bukit Makmur.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Kobexindo Tractors - Indoneisa
- Commonwealth Bank - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sical Logistics Limited - India
- MS Steel International - UAE
- Krishnapatnam Port Company Ltd. - India
- Kaltim Prima Coal - Indonesia
- The University of Queensland
- Anglo American - United Kingdom
- Global Business Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- GVK Power & Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Rashtriya Ispat Nigam Limited - India
- GAC Shipping (India) Pvt Ltd
- Bhatia International Limited - India
- Orica Mining Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- White Energy Company Limited
- Bhushan Steel Limited - India
- Wood Mackenzie - Singapore
- Edison Trading Spa - Italy
- Maheswari Brothers Coal Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- Altura Mining Limited, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Romanian Commodities Exchange
- Trasteel International SA, Italy
- San Jose City I Power Corp, Philippines
- Ministry of Finance - Indonesia
- Globalindo Alam Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Therma Luzon, Inc, Philippines
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Coalindo Energy - Indonesia
- New Zealand Coal & Carbon
- Borneo Indobara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Planning Commission, India
- Toyota Tsusho Corporation, Japan
- Bhoruka Overseas - Indonesia
- Sinarmas Energy and Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Marubeni Corporation - India
- Jaiprakash Power Ventures ltd
- Standard Chartered Bank - UAE
- Port Waratah Coal Services - Australia
- Videocon Industries ltd - India
- Independent Power Producers Association of India
- Oldendorff Carriers - Singapore
- Orica Australia Pty. Ltd.
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Holcim Trading Pte Ltd - Singapore
- TeaM Sual Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Dalmia Cement Bharat India
- Electricity Authority, New Zealand
- Georgia Ports Authority, United States
- Iligan Light & Power Inc, Philippines
- Vedanta Resources Plc - India
- Global Coal Blending Company Limited - Australia
- Simpson Spence & Young - Indonesia
- Medco Energi Mining Internasional
- Thiess Contractors Indonesia
- Eastern Coal Council - USA
- Samtan Co., Ltd - South Korea
- Mjunction Services Limited - India
- Straits Asia Resources Limited - Singapore
- Singapore Mercantile Exchange
- Ministry of Transport, Egypt
- SN Aboitiz Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Kideco Jaya Agung - Indonesia
- IHS Mccloskey Coal Group - USA
- Sarangani Energy Corporation, Philippines
- Bharathi Cement Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cigading International Bulk Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Bukit Baiduri Energy - Indonesia
- Parry Sugars Refinery, India
- OPG Power Generation Pvt Ltd - India
- Tata Chemicals Ltd - India
- Eastern Energy - Thailand
- Star Paper Mills Limited - India
- Barasentosa Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Renaissance Capital - South Africa
- Neyveli Lignite Corporation Ltd, - India
- CNBM International Corporation - China
- Indonesian Coal Mining Association
- Bahari Cakrawala Sebuku - Indonesia
- Savvy Resources Ltd - HongKong
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Economic Council, Georgia
- Energy Link Ltd, New Zealand
- PNOC Exploration Corporation - Philippines
- VISA Power Limited - India
- Chamber of Mines of South Africa
- Directorate General of MIneral and Coal - Indonesia
- Mercator Lines Limited - India
- Antam Resourcindo - Indonesia
- ASAPP Information Group - India
- Rio Tinto Coal - Australia
- Larsen & Toubro Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Thai Mozambique Logistica
- Baramulti Group, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wilmar Investment Holdings
- Miang Besar Coal Terminal - Indonesia
- Madhucon Powers Ltd - India
- Lanco Infratech Ltd - India
- Ambuja Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- SMG Consultants - Indonesia
- Indo Tambangraya Megah - Indonesia
- Heidelberg Cement - Germany
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- PTC India Limited - India
- Metalloyd Limited - United Kingdom
- Bangladesh Power Developement Board
- Aditya Birla Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Indian Energy Exchange, India
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- Siam City Cement - Thailand
- Ceylon Electricity Board - Sri Lanka
- Pipit Mutiara Jaya. PT, Indonesia
- Attock Cement Pakistan Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coastal Gujarat Power Limited - India
- Meenaskhi Energy Private Limited - India
- India Bulls Power Limited - India
- Coal and Oil Company - UAE
- Malabar Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- McConnell Dowell - Australia
- Posco Energy - South Korea
- Mercuria Energy - Indonesia
- Indogreen Group - Indonesia
- Sindya Power Generating Company Private Ltd
- Binh Thuan Hamico - Vietnam
- Xindia Steels Limited - India
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- Australian Coal Association
- Parliament of New Zealand
- Latin American Coal - Colombia
- Banpu Public Company Limited - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Cement Manufacturers Association - India
- Goldman Sachs - Singapore
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- Uttam Galva Steels Limited - India
- South Luzon Thermal Energy Corporation
- Sree Jayajothi Cements Limited - India
- Central Electricity Authority - India
- Alfred C Toepfer International GmbH - Germany
- Energy Development Corp, Philippines
- Vizag Seaport Private Limited - India
- Makarim & Taira - Indonesia
- ICICI Bank Limited - India
- The State Trading Corporation of India Ltd
- Bulk Trading Sa - Switzerland
- Directorate Of Revenue Intelligence - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kohat Cement Company Ltd. - Pakistan
- Kapuas Tunggal Persada - Indonesia
- SMC Global Power, Philippines
- Global Green Power PLC Corporation, Philippines
- Deloitte Consulting - India
- Price Waterhouse Coopers - Russia
- Gujarat Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Africa Commodities Group - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- The Treasury - Australian Government
- Petron Corporation, Philippines
- Sakthi Sugars Limited - India
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
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