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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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Thursday, 19 May 11
OVERSUPPLY, VERY LARGE ORE CARRIERS EAT UP ON DRY BULK FREIGHT RATES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
After a brief upward momentum which ended early last week, the Baltic Dry Index, the dry bulk market’s benchmark has returned to its usual pat ...
Wednesday, 18 May 11
THE US COAL INDUSTRY LOGGED EXPORTS OF AROUND 25M TONNES IN 1Q OF 2011 - BRS
Another slow decline in the bulk markets this week, with the BCI losing the most at nearly 5%, the BPI 2.8% and the smaller sizes sub-1% amounts. Th ...
Wednesday, 18 May 11
AKR AIMS TO SELL COAL WORTH RP216 BILLION - PAPER
Bisnis Indonesia, an Indonesia's one of the leading business paper reported that, PT AKR Corporindo Tbk has targeted coal sales valued at Rp216 bil ...
Wednesday, 18 May 11
OVERHAUL OF MINING LAW MAY DETER INVESTMENT, S&P SAYS - THE JAKARTA GLOBE
The Jakarta Globe, an Indonesian English language news paper reported that, A report by Standard & Poor’s Ratings Services that a regulatory ...
Tuesday, 17 May 11
DRY BULK MARKET ENTERS WEEK ON WEAK MODE - HELLENIC SHIPPING
In yet another sign of softening freight rates for dry bulk carriers and oversupply issues, the dry bulk market entered this week on a downward path ...
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- Formosa Plastics Group - Taiwan
- Mjunction Services Limited - India
- Maheswari Brothers Coal Limited - India
- AsiaOL BioFuels Corp., Philippines
- Binh Thuan Hamico - Vietnam
- Leighton Contractors Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Lanco Infratech Ltd - India
- Sarangani Energy Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Energy Link Ltd, New Zealand
- Jindal Steel & Power Ltd - India
- Meenaskhi Energy Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- Vedanta Resources Plc - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aditya Birla Group - India
- Heidelberg Cement - Germany
- European Bulk Services B.V. - Netherlands
- Thai Mozambique Logistica
- Kumho Petrochemical, South Korea
- Bhushan Steel Limited - India
- Jaiprakash Power Ventures ltd
- Kaltim Prima Coal - Indonesia
- Electricity Generating Authority of Thailand
- Australian Coal Association
- Africa Commodities Group - South Africa
- Oldendorff Carriers - Singapore
- Orica Australia Pty. Ltd.
- Manunggal Multi Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Finance - Indonesia
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- Singapore Mercantile Exchange
- Vizag Seaport Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- IHS Mccloskey Coal Group - USA
- Edison Trading Spa - Italy
- Straits Asia Resources Limited - Singapore
- Star Paper Mills Limited - India
- Bayan Resources Tbk. - Indonesia
- The State Trading Corporation of India Ltd
- Gujarat Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- The University of Queensland
- Vijayanagar Sugar Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Medco Energi Mining Internasional
- PNOC Exploration Corporation - Philippines
- Altura Mining Limited, Indonesia
- Indian Energy Exchange, India
- Deloitte Consulting - India
- Essar Steel Hazira Ltd - India
- Baramulti Group, Indonesia
- Pendopo Energi Batubara - Indonesia
- Orica Mining Services - Indonesia
- Anglo American - United Kingdom
- Malabar Cements Ltd - India
- Trasteel International SA, Italy
- Global Business Power Corporation, Philippines
- ASAPP Information Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Coalindo Energy - Indonesia
- Mercator Lines Limited - India
- PowerSource Philippines DevCo
- Indo Tambangraya Megah - Indonesia
- Indonesian Coal Mining Association
- Sindya Power Generating Company Private Ltd
- Economic Council, Georgia
- Directorate General of MIneral and Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Global Green Power PLC Corporation, Philippines
- Renaissance Capital - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Iligan Light & Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Agrawal Coal Company - India
- GMR Energy Limited - India
- Bulk Trading Sa - Switzerland
- London Commodity Brokers - England
- Central Electricity Authority - India
- Madhucon Powers Ltd - India
- IEA Clean Coal Centre - UK
- Grasim Industreis Ltd - India
- TeaM Sual Corporation - Philippines
- Wood Mackenzie - Singapore
- Salva Resources Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Bharathi Cement Corporation - India
- Ministry of Transport, Egypt
- Karbindo Abesyapradhi - Indoneisa
- Antam Resourcindo - Indonesia
- Interocean Group of Companies - India
- Kartika Selabumi Mining - Indonesia
- Georgia Ports Authority, United States
- Indian Oil Corporation Limited
- Mintek Dendrill Indonesia
- Sakthi Sugars Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Baiduri Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Xindia Steels Limited - India
- GVK Power & Infra Limited - India
- Coastal Gujarat Power Limited - India
- OPG Power Generation Pvt Ltd - India
- SMC Global Power, Philippines
- Port Waratah Coal Services - Australia
- Commonwealth Bank - Australia
- Chamber of Mines of South Africa
- Krishnapatnam Port Company Ltd. - India
- Indika Energy - Indonesia
- Independent Power Producers Association of India
- Semirara Mining Corp, Philippines
- Romanian Commodities Exchange
- Planning Commission, India
- Marubeni Corporation - India
- Carbofer General Trading SA - India
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Simpson Spence & Young - Indonesia
- Latin American Coal - Colombia
- White Energy Company Limited
- Central Java Power - Indonesia
- ICICI Bank Limited - India
- CNBM International Corporation - China
- Ambuja Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Meralco Power Generation, Philippines
- Metalloyd Limited - United Kingdom
- Siam City Cement - Thailand
- Sree Jayajothi Cements Limited - India
- Attock Cement Pakistan Limited
- Tamil Nadu electricity Board
- VISA Power Limited - India
- Dalmia Cement Bharat India
- Standard Chartered Bank - UAE
- PTC India Limited - India
- Chettinad Cement Corporation Ltd - India
- Sojitz Corporation - Japan
- Timah Investasi Mineral - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tata Chemicals Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Sical Logistics Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Bangladesh Power Developement Board
- Rio Tinto Coal - Australia
- Goldman Sachs - Singapore
- Minerals Council of Australia
- Ceylon Electricity Board - Sri Lanka
- Cigading International Bulk Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Toyota Tsusho Corporation, Japan
- Wilmar Investment Holdings
- Eastern Energy - Thailand
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- India Bulls Power Limited - India
- Gujarat Sidhee Cement - India
- Borneo Indobara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Cement Manufacturers Association - India
- San Jose City I Power Corp, Philippines
- Uttam Galva Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Therma Luzon, Inc, Philippines
- Price Waterhouse Coopers - Russia
- CIMB Investment Bank - Malaysia
- Makarim & Taira - Indonesia
- Energy Development Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indogreen Group - Indonesia
- Thiess Contractors Indonesia
- LBH Netherlands Bv - Netherlands
- Merrill Lynch Commodities Europe
- SMG Consultants - Indonesia
- Eastern Coal Council - USA
- Banpu Public Company Limited - Thailand
- Kideco Jaya Agung - Indonesia
- Savvy Resources Ltd - HongKong
- South Luzon Thermal Energy Corporation
- SN Aboitiz Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- Siam City Cement PLC, Thailand
- GN Power Mariveles Coal Plant, Philippines
- Bhatia International Limited - India
- Kobexindo Tractors - Indoneisa
- The Treasury - Australian Government
- Bahari Cakrawala Sebuku - Indonesia
- MS Steel International - UAE
- Directorate Of Revenue Intelligence - India
- Australian Commodity Traders Exchange
- Posco Energy - South Korea
- Semirara Mining and Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Mines - Canada
- Riau Bara Harum - Indonesia
- Electricity Authority, New Zealand
- Videocon Industries ltd - India
- Parliament of New Zealand
- GAC Shipping (India) Pvt Ltd
- Mercuria Energy - Indonesia
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