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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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Tuesday, 05 April 11
DRY BULK MARKET DOWN ON FIRST DAY OF SECOND QUARTER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market began the second quarter on a downward pattern, with the industry’s benchmark, the Baltic Dry Index (BDI) shedding 1.45 pe ...
Monday, 04 April 11
INDONESIA INTERNATIONAL CONFERENCE FOCUS ON INDONESIA'S ECONOMY (IICFIE) 2011 MASTER PLAN TO ACCELERATE THE ECONOMIC DEVELOPMENT
Press Release - Since couple of years, Indonesia's economy show impressive growth. What is the Indonesia's Economic Corridor and the Master plan t ...
Saturday, 02 April 11
TNPL CALLS FOR 160KT OF NON-COKING COAL
COALspot.com - Tamil Nadu Newsprint and Papers Limited (TNPL), is seeking to procure another 160,000 MT +/- 5 percent of Non-Coking imported C ...
Saturday, 02 April 11
THE FREIGHT MARKETS LIKELY TO BE SOFT NEXT WEEK - VISTAAR SINGAPORE
COALspot.com - The freight market softened this week affecting all sectors with BDI down by 65 points (down by 4.10 pct) and closed at 1,520 points. ...
Friday, 01 April 11
SUPRAS EX RICHARDS BAY COAL TERMINAL TO INDIA HOVERING AT $ 25 - 27.00 PMT - FEARNBULK
Handy
Atlantic markets remain stable with more activity from the Black Sea to FEast paying in the mid 20´s on Supras. The USG remains firm p ...
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- Maharashtra Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- The State Trading Corporation of India Ltd
- Coalindo Energy - Indonesia
- Tamil Nadu electricity Board
- Eastern Energy - Thailand
- London Commodity Brokers - England
- Makarim & Taira - Indonesia
- ICICI Bank Limited - India
- Borneo Indobara - Indonesia
- Bangladesh Power Developement Board
- Price Waterhouse Coopers - Russia
- Carbofer General Trading SA - India
- Commonwealth Bank - Australia
- Karaikal Port Pvt Ltd - India
- McConnell Dowell - Australia
- Anglo American - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Ind-Barath Power Infra Limited - India
- Planning Commission, India
- Straits Asia Resources Limited - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Energy Exchange, India
- Riau Bara Harum - Indonesia
- Essar Steel Hazira Ltd - India
- Kaltim Prima Coal - Indonesia
- Bhatia International Limited - India
- Ceylon Electricity Board - Sri Lanka
- Therma Luzon, Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Mercator Lines Limited - India
- CIMB Investment Bank - Malaysia
- Bayan Resources Tbk. - Indonesia
- Dalmia Cement Bharat India
- Standard Chartered Bank - UAE
- SMC Global Power, Philippines
- Agrawal Coal Company - India
- European Bulk Services B.V. - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Baramulti Group, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Coal Blending Company Limited - Australia
- Miang Besar Coal Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining Corp, Philippines
- Uttam Galva Steels Limited - India
- CNBM International Corporation - China
- Parliament of New Zealand
- Interocean Group of Companies - India
- Economic Council, Georgia
- Kepco SPC Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Energy Development Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- PTC India Limited - India
- Kartika Selabumi Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Attock Cement Pakistan Limited
- Star Paper Mills Limited - India
- SMG Consultants - Indonesia
- Orica Australia Pty. Ltd.
- Pendopo Energi Batubara - Indonesia
- Latin American Coal - Colombia
- Ministry of Mines - Canada
- Savvy Resources Ltd - HongKong
- Bulk Trading Sa - Switzerland
- Alfred C Toepfer International GmbH - Germany
- LBH Netherlands Bv - Netherlands
- Kumho Petrochemical, South Korea
- Trasteel International SA, Italy
- Sakthi Sugars Limited - India
- GVK Power & Infra Limited - India
- Renaissance Capital - South Africa
- Heidelberg Cement - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Bhushan Steel Limited - India
- Bukit Makmur.PT - Indonesia
- Lanco Infratech Ltd - India
- Semirara Mining and Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Mintek Dendrill Indonesia
- Siam City Cement - Thailand
- Singapore Mercantile Exchange
- Rio Tinto Coal - Australia
- Merrill Lynch Commodities Europe
- Sical Logistics Limited - India
- Samtan Co., Ltd - South Korea
- OPG Power Generation Pvt Ltd - India
- Marubeni Corporation - India
- Xindia Steels Limited - India
- Antam Resourcindo - Indonesia
- TeaM Sual Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Ministry of Transport, Egypt
- Gujarat Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- IHS Mccloskey Coal Group - USA
- Coal and Oil Company - UAE
- Mjunction Services Limited - India
- Larsen & Toubro Limited - India
- Sinarmas Energy and Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aboitiz Power Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Bharathi Cement Corporation - India
- Indika Energy - Indonesia
- VISA Power Limited - India
- Medco Energi Mining Internasional
- South Luzon Thermal Energy Corporation
- Gujarat Mineral Development Corp Ltd - India
- Sree Jayajothi Cements Limited - India
- Meenaskhi Energy Private Limited - India
- Vizag Seaport Private Limited - India
- Altura Mining Limited, Indonesia
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Toyota Tsusho Corporation, Japan
- GMR Energy Limited - India
- Minerals Council of Australia
- Timah Investasi Mineral - Indoneisa
- Madhucon Powers Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Energy Link Ltd, New Zealand
- Central Java Power - Indonesia
- Port Waratah Coal Services - Australia
- Petron Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- AsiaOL BioFuels Corp., Philippines
- The Treasury - Australian Government
- Edison Trading Spa - Italy
- Directorate Of Revenue Intelligence - India
- Videocon Industries ltd - India
- Globalindo Alam Lestari - Indonesia
- Thiess Contractors Indonesia
- PNOC Exploration Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- ASAPP Information Group - India
- Kobexindo Tractors - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Banpu Public Company Limited - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Chettinad Cement Corporation Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Romanian Commodities Exchange
- Australian Coal Association
- Parry Sugars Refinery, India
- Petrochimia International Co. Ltd.- Taiwan
- Tata Chemicals Ltd - India
- Sojitz Corporation - Japan
- Wood Mackenzie - Singapore
- Ambuja Cements Ltd - India
- Eastern Coal Council - USA
- Orica Mining Services - Indonesia
- IEA Clean Coal Centre - UK
- Thai Mozambique Logistica
- Siam City Cement PLC, Thailand
- Jaiprakash Power Ventures ltd
- Bukit Baiduri Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- MS Steel International - UAE
- Global Business Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Grasim Industreis Ltd - India
- Electricity Generating Authority of Thailand
- Central Electricity Authority - India
- New Zealand Coal & Carbon
- Deloitte Consulting - India
- Karbindo Abesyapradhi - Indoneisa
- Sindya Power Generating Company Private Ltd
- Cigading International Bulk Terminal - Indonesia
- India Bulls Power Limited - India
- Wilmar Investment Holdings
- Simpson Spence & Young - Indonesia
- Indonesian Coal Mining Association
- Georgia Ports Authority, United States
- TNB Fuel Sdn Bhd - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- White Energy Company Limited
- Electricity Authority, New Zealand
- Bhoruka Overseas - Indonesia
- Oldendorff Carriers - Singapore
- Indian Oil Corporation Limited
- Malabar Cements Ltd - India
- Posco Energy - South Korea
- Global Green Power PLC Corporation, Philippines
- Mercuria Energy - Indonesia
- Goldman Sachs - Singapore
- The University of Queensland
- Cement Manufacturers Association - India
- Indogreen Group - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- PowerSource Philippines DevCo
- Kideco Jaya Agung - Indonesia
- Power Finance Corporation Ltd., India
- Independent Power Producers Association of India
- Africa Commodities Group - South Africa
- Binh Thuan Hamico - Vietnam
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