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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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Friday, 07 January 11
DRY BULK MARKET ON A FREEFALL, AS THE NEW YEAR EARLY DAYS DONT BRING MANY CHEERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market is facing its worst slump in more than two years, falling by 4.75% yesterday to reach 1,544 points, on top of an additional 4.2% ...
Thursday, 06 January 11
OVERSEAS & GENERAL SIGNS AGREEMENT TO EXPAND FOOTPRINT ON COAL LEASE IN INDONESIA - PROACTIVE INVESTORS
Proactive Investors reported that, Overseas & General (ASX: OGL) has entered into a joint operating agreement on the Jambi Coal Lease in Sumatra ...
Thursday, 06 January 11
BANPU EXPECTS ROSY 2011 AS COAL PRICES SKYROCKET - BANGKOK POST
Bangkok Post reported that, Banpu Plc, Asean's largest coal miner, expects minimal impact from the production stoppage at its Daning mine in China ...
Thursday, 06 January 11
COKING COAL CONTRACT PRICE MAY RISE 33% ON AUSTRALIAN FLOODS - BLOOMBERG
Bloomberg reported that, Steelmakers in Asia may be forced to pay as much as 33 percent more for hard coking coal after the worst floods in 50 years ...
Wednesday, 05 January 11
HIGHER COAL PRICES LIFT UP COAL STOCKS
Thermal coal price this month has gone up 5.63% to US$127.70 per ton today from mid last month at US$120.89 per ton.
Thermal coal price for next ...
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- Bayan Resources Tbk. - Indonesia
- Posco Energy - South Korea
- IHS Mccloskey Coal Group - USA
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Mines - Canada
- San Jose City I Power Corp, Philippines
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- Madhucon Powers Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Wilmar Investment Holdings
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Commonwealth Bank - Australia
- Sindya Power Generating Company Private Ltd
- Ministry of Finance - Indonesia
- Grasim Industreis Ltd - India
- Videocon Industries ltd - India
- Bangladesh Power Developement Board
- Central Electricity Authority - India
- Energy Link Ltd, New Zealand
- CNBM International Corporation - China
- Global Coal Blending Company Limited - Australia
- Port Waratah Coal Services - Australia
- LBH Netherlands Bv - Netherlands
- Interocean Group of Companies - India
- Kumho Petrochemical, South Korea
- Orica Mining Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Baramulti Group, Indonesia
- Chettinad Cement Corporation Ltd - India
- Straits Asia Resources Limited - Singapore
- Borneo Indobara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- VISA Power Limited - India
- Therma Luzon, Inc, Philippines
- GMR Energy Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Australian Coal Association
- Tamil Nadu electricity Board
- Central Java Power - Indonesia
- Global Green Power PLC Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Mintek Dendrill Indonesia
- CIMB Investment Bank - Malaysia
- Malabar Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Attock Cement Pakistan Limited
- Kideco Jaya Agung - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Karaikal Port Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- TeaM Sual Corporation - Philippines
- Indogreen Group - Indonesia
- Timah Investasi Mineral - Indoneisa
- Mercator Lines Limited - India
- Essar Steel Hazira Ltd - India
- Bhatia International Limited - India
- Toyota Tsusho Corporation, Japan
- Jorong Barutama Greston.PT - Indonesia
- Simpson Spence & Young - Indonesia
- Agrawal Coal Company - India
- Indo Tambangraya Megah - Indonesia
- Thai Mozambique Logistica
- Sarangani Energy Corporation, Philippines
- Orica Australia Pty. Ltd.
- SMG Consultants - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- London Commodity Brokers - England
- Bukit Makmur.PT - Indonesia
- Indian Energy Exchange, India
- Gujarat Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Indika Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Eastern Coal Council - USA
- Ambuja Cements Ltd - India
- Jindal Steel & Power Ltd - India
- ICICI Bank Limited - India
- Economic Council, Georgia
- Price Waterhouse Coopers - Russia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- Directorate Of Revenue Intelligence - India
- Semirara Mining and Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Coastal Gujarat Power Limited - India
- GVK Power & Infra Limited - India
- Coalindo Energy - Indonesia
- The University of Queensland
- Vedanta Resources Plc - India
- Global Business Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Billiton Holdings Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Ministry of Transport, Egypt
- Samtan Co., Ltd - South Korea
- Intertek Mineral Services - Indonesia
- Marubeni Corporation - India
- Merrill Lynch Commodities Europe
- Asmin Koalindo Tuhup - Indonesia
- Medco Energi Mining Internasional
- Indonesian Coal Mining Association
- Meralco Power Generation, Philippines
- Electricity Authority, New Zealand
- Coal and Oil Company - UAE
- Barasentosa Lestari - Indonesia
- Minerals Council of Australia
- Anglo American - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- Goldman Sachs - Singapore
- Bukit Baiduri Energy - Indonesia
- New Zealand Coal & Carbon
- Neyveli Lignite Corporation Ltd, - India
- Vijayanagar Sugar Pvt Ltd - India
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- IEA Clean Coal Centre - UK
- Standard Chartered Bank - UAE
- Thiess Contractors Indonesia
- Sinarmas Energy and Mining - Indonesia
- Makarim & Taira - Indonesia
- Wood Mackenzie - Singapore
- Chamber of Mines of South Africa
- Kepco SPC Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Manunggal Multi Energi - Indonesia
- Vizag Seaport Private Limited - India
- PTC India Limited - India
- McConnell Dowell - Australia
- Parry Sugars Refinery, India
- Singapore Mercantile Exchange
- Siam City Cement - Thailand
- Edison Trading Spa - Italy
- Latin American Coal - Colombia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Uttam Galva Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cement Manufacturers Association - India
- South Luzon Thermal Energy Corporation
- Deloitte Consulting - India
- Sakthi Sugars Limited - India
- Gujarat Sidhee Cement - India
- Africa Commodities Group - South Africa
- Sojitz Corporation - Japan
- Savvy Resources Ltd - HongKong
- Energy Development Corp, Philippines
- Bhoruka Overseas - Indonesia
- Bhushan Steel Limited - India
- Larsen & Toubro Limited - India
- ASAPP Information Group - India
- Pendopo Energi Batubara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Oldendorff Carriers - Singapore
- Aditya Birla Group - India
- SMC Global Power, Philippines
- PNOC Exploration Corporation - Philippines
- Romanian Commodities Exchange
- Dalmia Cement Bharat India
- White Energy Company Limited
- Kohat Cement Company Ltd. - Pakistan
- PowerSource Philippines DevCo
- Renaissance Capital - South Africa
- Antam Resourcindo - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Planning Commission, India
- GN Power Mariveles Coal Plant, Philippines
- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Ind-Barath Power Infra Limited - India
- Metalloyd Limited - United Kingdom
- Australian Commodity Traders Exchange
- Rashtriya Ispat Nigam Limited - India
- Lanco Infratech Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Miang Besar Coal Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Banpu Public Company Limited - Thailand
- Semirara Mining Corp, Philippines
- Mercuria Energy - Indonesia
- MS Steel International - UAE
- Jaiprakash Power Ventures ltd
- The State Trading Corporation of India Ltd
- Heidelberg Cement - Germany
- Xindia Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Independent Power Producers Association of India
- Maheswari Brothers Coal Limited - India
- Directorate General of MIneral and Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- The Treasury - Australian Government
- India Bulls Power Limited - India
- Rio Tinto Coal - Australia
- Mjunction Services Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Georgia Ports Authority, United States
- Petron Corporation, Philippines
- Siam City Cement PLC, Thailand
- Power Finance Corporation Ltd., India
- Trasteel International SA, Italy
- Cigading International Bulk Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Parliament of New Zealand
- Sree Jayajothi Cements Limited - India
- Kaltim Prima Coal - Indonesia
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