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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, 24 March 11
DRY BULK MARKET RISES, CAPESIZES GAIN BUT REMAIN LOW EARNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market posted modest gains on Wednesday, with the Baltic Dry Index rising to 1,565 points, up by 1.43 percent on the day, led by gains ...
Wednesday, 23 March 11
INDIAS TNPL RECEIVED 1.120 MMTS OF COAL AGAINST ITS 160K MT INQUIRY
COALspot.com - Tamil Nadu Newsprint and Papers Ltd. has closed its inquiry today.
Seven Indian coal traders have submitted price bid to sup ...
Tuesday, 22 March 11
MONNET ISPAT & ENERGY LIMITED ACQUIRES INDONESIAN COAL COMPANY THROUGH ITS SUBSIDIARY MONNET GLOBAL LIMITED
Monnet Global Limited (MGL) acquires PT Sarwa Sembada Karya Bumi, Sumatra & on part exploration the reserves of 65 million tonne on Thermal Coal ...
Tuesday, 22 March 11
RI COAL EXPORTS TO JAPAN MAY BE DIVERTED TO OTHER COUNTRIES - THE JAKARTA POST
The Jakarta Post reported that, Indonesia’s coal exports to Japan will likely be diverted to other countries for several months after the rece ...
Tuesday, 22 March 11
KRISHNAPATNAM PORT SETS ALL INDIA RECORD FOR COAL DISCHARGING
COALspot.com - "Krishnapatnam Port has set an all India record for discharging 71,587 tons of steam coal in just 24 hrs using the conventional ...
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- Renaissance Capital - South Africa
- Vizag Seaport Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Banpu Public Company Limited - Thailand
- Ceylon Electricity Board - Sri Lanka
- Carbofer General Trading SA - India
- Mintek Dendrill Indonesia
- Coalindo Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- Uttam Galva Steels Limited - India
- Kobexindo Tractors - Indoneisa
- European Bulk Services B.V. - Netherlands
- Bulk Trading Sa - Switzerland
- Parliament of New Zealand
- Coastal Gujarat Power Limited - India
- ICICI Bank Limited - India
- Commonwealth Bank - Australia
- Thiess Contractors Indonesia
- Indogreen Group - Indonesia
- Indian Oil Corporation Limited
- Interocean Group of Companies - India
- Xindia Steels Limited - India
- Indonesian Coal Mining Association
- Larsen & Toubro Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maheswari Brothers Coal Limited - India
- Energy Development Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Eastern Coal Council - USA
- Petrochimia International Co. Ltd.- Taiwan
- Merrill Lynch Commodities Europe
- GAC Shipping (India) Pvt Ltd
- Vedanta Resources Plc - India
- Medco Energi Mining Internasional
- PNOC Exploration Corporation - Philippines
- Sical Logistics Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Marubeni Corporation - India
- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Bangladesh Power Developement Board
- Posco Energy - South Korea
- Leighton Contractors Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- India Bulls Power Limited - India
- SMG Consultants - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Therma Luzon, Inc, Philippines
- Ambuja Cements Ltd - India
- Electricity Generating Authority of Thailand
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- Aditya Birla Group - India
- Bhatia International Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Lanco Infratech Ltd - India
- Jaiprakash Power Ventures ltd
- Ministry of Mines - Canada
- McConnell Dowell - Australia
- Cement Manufacturers Association - India
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- Sojitz Corporation - Japan
- Agrawal Coal Company - India
- Formosa Plastics Group - Taiwan
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- Jorong Barutama Greston.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- The State Trading Corporation of India Ltd
- Petron Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- Meenaskhi Energy Private Limited - India
- Attock Cement Pakistan Limited
- Bahari Cakrawala Sebuku - Indonesia
- Coal and Oil Company - UAE
- Borneo Indobara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Africa Commodities Group - South Africa
- Mjunction Services Limited - India
- Deloitte Consulting - India
- Wood Mackenzie - Singapore
- GMR Energy Limited - India
- Georgia Ports Authority, United States
- The University of Queensland
- Kapuas Tunggal Persada - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Videocon Industries ltd - India
- Metalloyd Limited - United Kingdom
- White Energy Company Limited
- Mercator Lines Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Transport, Egypt
- Meralco Power Generation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Sindya Power Generating Company Private Ltd
- Directorate Of Revenue Intelligence - India
- Central Electricity Authority - India
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Edison Trading Spa - Italy
- New Zealand Coal & Carbon
- Energy Link Ltd, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- TeaM Sual Corporation - Philippines
- Essar Steel Hazira Ltd - India
- ASAPP Information Group - India
- Global Coal Blending Company Limited - Australia
- Gujarat Electricity Regulatory Commission - India
- CNBM International Corporation - China
- Siam City Cement - Thailand
- PTC India Limited - India
- IHS Mccloskey Coal Group - USA
- Riau Bara Harum - Indonesia
- Ind-Barath Power Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Tamil Nadu electricity Board
- Intertek Mineral Services - Indonesia
- Central Java Power - Indonesia
- Malabar Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Orica Mining Services - Indonesia
- Power Finance Corporation Ltd., India
- Kumho Petrochemical, South Korea
- GVK Power & Infra Limited - India
- Port Waratah Coal Services - Australia
- Heidelberg Cement - Germany
- Singapore Mercantile Exchange
- AsiaOL BioFuels Corp., Philippines
- Oldendorff Carriers - Singapore
- SMC Global Power, Philippines
- Sakthi Sugars Limited - India
- Straits Asia Resources Limited - Singapore
- Kepco SPC Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Indika Energy - Indonesia
- Global Business Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Authority, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- IEA Clean Coal Centre - UK
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Economic Council, Georgia
- Samtan Co., Ltd - South Korea
- Bhushan Steel Limited - India
- Toyota Tsusho Corporation, Japan
- Kartika Selabumi Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- Eastern Energy - Thailand
- Bukit Makmur.PT - Indonesia
- Gujarat Sidhee Cement - India
- TNB Fuel Sdn Bhd - Malaysia
- Bharathi Cement Corporation - India
- Latin American Coal - Colombia
- Kideco Jaya Agung - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Krishnapatnam Port Company Ltd. - India
- London Commodity Brokers - England
- San Jose City I Power Corp, Philippines
- Siam City Cement PLC, Thailand
- OPG Power Generation Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Billiton Holdings Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Australian Coal Association
- Sarangani Energy Corporation, Philippines
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- Dalmia Cement Bharat India
- Maharashtra Electricity Regulatory Commission - India
- Planning Commission, India
- Independent Power Producers Association of India
- Parry Sugars Refinery, India
- Antam Resourcindo - Indonesia
- VISA Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Wilmar Investment Holdings
- Rio Tinto Coal - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Altura Mining Limited, Indonesia
- Mercuria Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- The Treasury - Australian Government
- Price Waterhouse Coopers - Russia
- Grasim Industreis Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Thai Mozambique Logistica
- Pendopo Energi Batubara - Indonesia
- Barasentosa Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- MS Steel International - UAE
- Semirara Mining Corp, Philippines
- Tata Chemicals Ltd - India
- Karaikal Port Pvt Ltd - India
- Makarim & Taira - Indonesia
- Madhucon Powers Ltd - India
- SN Aboitiz Power Inc, Philippines
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