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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, 08 January 12
THARPAK CONSORTIUM FORMED TO DEVELOP MEGA ENERGY COMPLEX IN SINDH PROVINCE, PAKISTAN
Press Release: On January 5th, TharPak, LLC met with officials of the Embassy of Pakistan in Washington DC to introduce and announce the formation o ...
Saturday, 07 January 12
COAL MARKETS SEE FALLING SPOT PRICES
COALspot.com – World’s thermal coal spot prices have slipped this week..
globalCOAL index in Newcastle Port, benchmark for Asian mark ...
Friday, 06 January 12
COAL INDIA LINKED COAL PRICES WITH INTERNATIONAL COAL PRICES
COALspot.com - Consumers of indigenous coal in India to pay International prices in the future. Coal India has recently moved from UHV pricing mecha ...
Friday, 06 January 12
CLARIDEN GLOBAL BRINGS YOU INDONESIA MINING 2012
Capitalizing Business & Investment Opportunities in an Uncertain Market.Press Release - Clariden Global brings you Indonesia Mining 2012, the dedi ...
Friday, 06 January 12
THE PANAMAX MARKET EXPERIENCED A SLOW START TO 2012 - FEARNLEYS AS
Handy
As usual after a holiday owners and charterers both try to get a feel of the market. An Armada of Supras were talking to ballast towards USG, ...
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- Jorong Barutama Greston.PT - Indonesia
- Grasim Industreis Ltd - India
- Central Java Power - Indonesia
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Vedanta Resources Plc - India
- Neyveli Lignite Corporation Ltd, - India
- Bangladesh Power Developement Board
- Lanco Infratech Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kumho Petrochemical, South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- VISA Power Limited - India
- Planning Commission, India
- Kartika Selabumi Mining - Indonesia
- India Bulls Power Limited - India
- Meralco Power Generation, Philippines
- Oldendorff Carriers - Singapore
- Wilmar Investment Holdings
- Bhoruka Overseas - Indonesia
- Borneo Indobara - Indonesia
- Barasentosa Lestari - Indonesia
- Larsen & Toubro Limited - India
- Australian Commodity Traders Exchange
- Indo Tambangraya Megah - Indonesia
- Thiess Contractors Indonesia
- Sakthi Sugars Limited - India
- Vizag Seaport Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Aboitiz Power Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Coalindo Energy - Indonesia
- New Zealand Coal & Carbon
- Medco Energi Mining Internasional
- Ministry of Finance - Indonesia
- Singapore Mercantile Exchange
- South Luzon Thermal Energy Corporation
- Posco Energy - South Korea
- Power Finance Corporation Ltd., India
- Marubeni Corporation - India
- Chettinad Cement Corporation Ltd - India
- Petron Corporation, Philippines
- IEA Clean Coal Centre - UK
- Kalimantan Lumbung Energi - Indonesia
- ICICI Bank Limited - India
- Ambuja Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Merrill Lynch Commodities Europe
- Jindal Steel & Power Ltd - India
- Ceylon Electricity Board - Sri Lanka
- GMR Energy Limited - India
- Xindia Steels Limited - India
- Makarim & Taira - Indonesia
- Indonesian Coal Mining Association
- Kapuas Tunggal Persada - Indonesia
- PNOC Exploration Corporation - Philippines
- Agrawal Coal Company - India
- Madhucon Powers Ltd - India
- Mjunction Services Limited - India
- Deloitte Consulting - India
- Edison Trading Spa - Italy
- SMG Consultants - Indonesia
- Coal and Oil Company - UAE
- Maheswari Brothers Coal Limited - India
- Tamil Nadu electricity Board
- Directorate Of Revenue Intelligence - India
- Mercuria Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- SN Aboitiz Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
- Miang Besar Coal Terminal - Indonesia
- Star Paper Mills Limited - India
- Simpson Spence & Young - Indonesia
- Cement Manufacturers Association - India
- Bhatia International Limited - India
- Parliament of New Zealand
- Banpu Public Company Limited - Thailand
- GAC Shipping (India) Pvt Ltd
- Semirara Mining Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Eastern Coal Council - USA
- CNBM International Corporation - China
- The University of Queensland
- Billiton Holdings Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- Essar Steel Hazira Ltd - India
- Kaltim Prima Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- Ind-Barath Power Infra Limited - India
- Latin American Coal - Colombia
- Energy Link Ltd, New Zealand
- Australian Coal Association
- Videocon Industries ltd - India
- Malabar Cements Ltd - India
- Metalloyd Limited - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- GVK Power & Infra Limited - India
- Iligan Light & Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- Semirara Mining and Power Corporation, Philippines
- Indian Oil Corporation Limited
- Ministry of Transport, Egypt
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Trasteel International SA, Italy
- Heidelberg Cement - Germany
- Globalindo Alam Lestari - Indonesia
- Interocean Group of Companies - India
- White Energy Company Limited
- Tata Chemicals Ltd - India
- Bharathi Cement Corporation - India
- Sindya Power Generating Company Private Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Mineral Development Corp Ltd - India
- Binh Thuan Hamico - Vietnam
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- Antam Resourcindo - Indonesia
- Bayan Resources Tbk. - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Aditya Birla Group - India
- McConnell Dowell - Australia
- Therma Luzon, Inc, Philippines
- Bhushan Steel Limited - India
- Energy Development Corp, Philippines
- MS Steel International - UAE
- Kepco SPC Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- San Jose City I Power Corp, Philippines
- Global Business Power Corporation, Philippines
- Anglo American - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bulk Trading Sa - Switzerland
- Altura Mining Limited, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Samtan Co., Ltd - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Electricity Authority, New Zealand
- The State Trading Corporation of India Ltd
- Orica Australia Pty. Ltd.
- Directorate General of MIneral and Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Intertek Mineral Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Attock Cement Pakistan Limited
- Minerals Council of Australia
- Coastal Gujarat Power Limited - India
- Price Waterhouse Coopers - Russia
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Sidhee Cement - India
- Renaissance Capital - South Africa
- Indian Energy Exchange, India
- Sree Jayajothi Cements Limited - India
- Savvy Resources Ltd - HongKong
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TeaM Sual Corporation - Philippines
- Mercator Lines Limited - India
- Georgia Ports Authority, United States
- PowerSource Philippines DevCo
- Bukit Baiduri Energy - Indonesia
- Chamber of Mines of South Africa
- Indika Energy - Indonesia
- Sical Logistics Limited - India
- Siam City Cement PLC, Thailand
- OPG Power Generation Pvt Ltd - India
- Dalmia Cement Bharat India
- Riau Bara Harum - Indonesia
- Goldman Sachs - Singapore
- SMC Global Power, Philippines
- International Coal Ventures Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Rio Tinto Coal - Australia
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Energy - Thailand
- Wood Mackenzie - Singapore
- Independent Power Producers Association of India
- Salva Resources Pvt Ltd - India
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Commonwealth Bank - Australia
- Uttam Galva Steels Limited - India
- Indogreen Group - Indonesia
- Global Coal Blending Company Limited - Australia
- London Commodity Brokers - England
- Meenaskhi Energy Private Limited - India
- Jaiprakash Power Ventures ltd
- Economic Council, Georgia
- The Treasury - Australian Government
- Carbofer General Trading SA - India
- Thai Mozambique Logistica
- Straits Asia Resources Limited - Singapore
- Parry Sugars Refinery, India
- ASAPP Information Group - India
- Manunggal Multi Energi - Indonesia
- Baramulti Group, Indonesia
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