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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, 10 April 11
SOFT FREIGHT MARKET TREND LIKELY TO BE CONTINUED - VISTAAR SHIPPING
COALspot.com - The freight market continued to soften further with the BDI breaking the 1,500 points and closing at 1376 points down by almost 10 pc ...
Thursday, 07 April 11
HANDY RATES SLIDING NOW - FEARNBULK
Handy
Slowly softening rates as more tonnage is accumulating in the Atlantic basin.The trans-Atlantic round is around $15k pd with trips to ...
Thursday, 07 April 11
DRY BULK MARKET PLUNGING EVEN FURTHER ON LOW CARGO DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has continued its falling pattern this week, with every day proving to be painful for ship owners, especially those of the large ...
Thursday, 07 April 11
INDIKA BUYS MITRABAHTERA AT US$ 0.183
PT Indika Energy Tbk (INDY), integrated energy company, today has exercised an option agreement to acquire 51% shareholding in newly listed coal tug ...
Wednesday, 06 April 11
FORBES & MANHATTAN COAL ANNOUNCES SIGNIFICANT OFF TAKE AGREEMENT
Steady Cash Flow Will Fund Production Ramp Up
Forbes & Manhattan Coal Corp., ("Forbes Coal" or the "Company") is a produc ...
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- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- Samtan Co., Ltd - South Korea
- Pendopo Energi Batubara - Indonesia
- Bulk Trading Sa - Switzerland
- The State Trading Corporation of India Ltd
- Kobexindo Tractors - Indoneisa
- London Commodity Brokers - England
- Indo Tambangraya Megah - Indonesia
- Essar Steel Hazira Ltd - India
- Wilmar Investment Holdings
- Indonesian Coal Mining Association
- Dalmia Cement Bharat India
- McConnell Dowell - Australia
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Therma Luzon, Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- CIMB Investment Bank - Malaysia
- Meralco Power Generation, Philippines
- The Treasury - Australian Government
- Ministry of Mines - Canada
- Orica Mining Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- IEA Clean Coal Centre - UK
- Kepco SPC Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Renaissance Capital - South Africa
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- New Zealand Coal & Carbon
- Mjunction Services Limited - India
- Xindia Steels Limited - India
- Siam City Cement PLC, Thailand
- Maharashtra Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- PNOC Exploration Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- GMR Energy Limited - India
- AsiaOL BioFuels Corp., Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Agrawal Coal Company - India
- Coalindo Energy - Indonesia
- White Energy Company Limited
- Straits Asia Resources Limited - Singapore
- LBH Netherlands Bv - Netherlands
- Merrill Lynch Commodities Europe
- Bhoruka Overseas - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- SMG Consultants - Indonesia
- Videocon Industries ltd - India
- Riau Bara Harum - Indonesia
- Intertek Mineral Services - Indonesia
- Edison Trading Spa - Italy
- Thiess Contractors Indonesia
- The University of Queensland
- Bharathi Cement Corporation - India
- Sojitz Corporation - Japan
- Mercuria Energy - Indonesia
- Ambuja Cements Ltd - India
- Semirara Mining Corp, Philippines
- Oldendorff Carriers - Singapore
- Attock Cement Pakistan Limited
- Medco Energi Mining Internasional
- Holcim Trading Pte Ltd - Singapore
- OPG Power Generation Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Vedanta Resources Plc - India
- Eastern Energy - Thailand
- Gujarat Sidhee Cement - India
- Commonwealth Bank - Australia
- Neyveli Lignite Corporation Ltd, - India
- Sarangani Energy Corporation, Philippines
- Sical Logistics Limited - India
- Chettinad Cement Corporation Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- MS Steel International - UAE
- VISA Power Limited - India
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- Bangladesh Power Developement Board
- Larsen & Toubro Limited - India
- Uttam Galva Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Coal Council - USA
- Borneo Indobara - Indonesia
- Energy Link Ltd, New Zealand
- Global Green Power PLC Corporation, Philippines
- Bhatia International Limited - India
- PowerSource Philippines DevCo
- Central Electricity Authority - India
- Aditya Birla Group - India
- Cigading International Bulk Terminal - Indonesia
- Tata Chemicals Ltd - India
- Aboitiz Power Corporation - Philippines
- Kumho Petrochemical, South Korea
- Economic Council, Georgia
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Development Corp, Philippines
- Parliament of New Zealand
- San Jose City I Power Corp, Philippines
- South Luzon Thermal Energy Corporation
- Trasteel International SA, Italy
- Karbindo Abesyapradhi - Indoneisa
- Kaltim Prima Coal - Indonesia
- Chamber of Mines of South Africa
- Altura Mining Limited, Indonesia
- Karaikal Port Pvt Ltd - India
- Cement Manufacturers Association - India
- Kohat Cement Company Ltd. - Pakistan
- Malabar Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- PTC India Limited - India
- Antam Resourcindo - Indonesia
- Lanco Infratech Ltd - India
- Deloitte Consulting - India
- Carbofer General Trading SA - India
- Standard Chartered Bank - UAE
- Orica Australia Pty. Ltd.
- Indian Energy Exchange, India
- Electricity Generating Authority of Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Wood Mackenzie - Singapore
- Indogreen Group - Indonesia
- Metalloyd Limited - United Kingdom
- Heidelberg Cement - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Barasentosa Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Bukit Makmur.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- Posco Energy - South Korea
- Electricity Authority, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Simpson Spence & Young - Indonesia
- Interocean Group of Companies - India
- Australian Commodity Traders Exchange
- Sinarmas Energy and Mining - Indonesia
- Formosa Plastics Group - Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- SMC Global Power, Philippines
- CNBM International Corporation - China
- Independent Power Producers Association of India
- Goldman Sachs - Singapore
- Directorate General of MIneral and Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Iligan Light & Power Inc, Philippines
- Latin American Coal - Colombia
- Sakthi Sugars Limited - India
- Romanian Commodities Exchange
- Petron Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Tamil Nadu electricity Board
- Mintek Dendrill Indonesia
- Port Waratah Coal Services - Australia
- Central Java Power - Indonesia
- Directorate Of Revenue Intelligence - India
- Coal and Oil Company - UAE
- Savvy Resources Ltd - HongKong
- ICICI Bank Limited - India
- Rio Tinto Coal - Australia
- Ministry of Finance - Indonesia
- Sree Jayajothi Cements Limited - India
- Indika Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Baramulti Group, Indonesia
- Indian Oil Corporation Limited
- Alfred C Toepfer International GmbH - Germany
- Gujarat Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Binh Thuan Hamico - Vietnam
- Thai Mozambique Logistica
- ASAPP Information Group - India
- Singapore Mercantile Exchange
- Jaiprakash Power Ventures ltd
- Maheswari Brothers Coal Limited - India
- Bhushan Steel Limited - India
- Ministry of Transport, Egypt
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Australian Coal Association
- Kideco Jaya Agung - Indonesia
- Anglo American - United Kingdom
- Africa Commodities Group - South Africa
- Bukit Baiduri Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kartika Selabumi Mining - Indonesia
- Vizag Seaport Private Limited - India
- Power Finance Corporation Ltd., India
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement - Thailand
- Banpu Public Company Limited - Thailand
- GVK Power & Infra Limited - India
- Planning Commission, India
- Global Coal Blending Company Limited - Australia
- India Bulls Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Star Paper Mills Limited - India
- TeaM Sual Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Manunggal Multi Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Minerals Council of Australia
- Mercator Lines Limited - India
- Georgia Ports Authority, United States
- Makarim & Taira - Indonesia
- Sindya Power Generating Company Private Ltd
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