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