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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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Wednesday, 17 November 10
DRY BULK MARKET LOOKING FOR SUPPORT IN COAL TRADES AND INDIAN IRON ORE EXPORTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Nikos Roussanoglou, Hellenic Shipping reported that, the dry bulk market is lacking support to end its 13-day slide, as evidenced by Monday’s ...
Tuesday, 16 November 10
'VALLAR PLC' TO BECOME 'BUMI PLC' POST DEAL - THE JAKARTA POST
The Jakarta Post reported that, The United Kingdom’s Vallar Plc will change its name to Bumi Plc following a cash and stock transaction with t ...
Tuesday, 16 November 10
ROTHSCHILD BUYS INDONESIAN COAL STAKES FOR $3 BILLION - BLOOMBERG
Bloomberg reported that, Nathaniel Rothschild, the only son of U.K. financier Jacob Rothschild, agreed to invest $3 billion in two Indonesian coal c ...
Sunday, 14 November 10
THE FREIGHT MARKET CONTINUED ITS DOWN FALL - VISTAAR SINGAPORE
COALspot.com: The freight market continued its down fall with BDI down by 7.29 pct and closed at 2,313 points.
All other segments were also under ...
Saturday, 13 November 10
INDONESIA SHIPPED 8.73 % MORE COAL IN OCTOBER THAN A MONTH EARLIER
COALspot.com: Indonesia, the world largest coal exporter, shipped 23.55 mln mt of coal in October 2010, which is 8.73 percent more compared to Septe ...
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- Electricity Generating Authority of Thailand
- Ministry of Finance - Indonesia
- Port Waratah Coal Services - Australia
- Gujarat Sidhee Cement - India
- LBH Netherlands Bv - Netherlands
- Binh Thuan Hamico - Vietnam
- Carbofer General Trading SA - India
- Petron Corporation, Philippines
- Trasteel International SA, Italy
- Ambuja Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Energy - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Economic Council, Georgia
- TeaM Sual Corporation - Philippines
- McConnell Dowell - Australia
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- Energy Development Corp, Philippines
- Agrawal Coal Company - India
- Vedanta Resources Plc - India
- Xindia Steels Limited - India
- Minerals Council of Australia
- Barasentosa Lestari - Indonesia
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Goldman Sachs - Singapore
- Aboitiz Power Corporation - Philippines
- Mjunction Services Limited - India
- Sarangani Energy Corporation, Philippines
- Eastern Coal Council - USA
- Attock Cement Pakistan Limited
- Kaltim Prima Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Merrill Lynch Commodities Europe
- Malabar Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Madhucon Powers Ltd - India
- Makarim & Taira - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- VISA Power Limited - India
- GVK Power & Infra Limited - India
- Oldendorff Carriers - Singapore
- Cigading International Bulk Terminal - Indonesia
- Sical Logistics Limited - India
- The Treasury - Australian Government
- International Coal Ventures Pvt Ltd - India
- Sojitz Corporation - Japan
- Heidelberg Cement - Germany
- IHS Mccloskey Coal Group - USA
- Chamber of Mines of South Africa
- Parry Sugars Refinery, India
- Karbindo Abesyapradhi - Indoneisa
- Riau Bara Harum - Indonesia
- Antam Resourcindo - Indonesia
- Singapore Mercantile Exchange
- South Luzon Thermal Energy Corporation
- Kumho Petrochemical, South Korea
- Planning Commission, India
- Wilmar Investment Holdings
- GAC Shipping (India) Pvt Ltd
- Ceylon Electricity Board - Sri Lanka
- MS Steel International - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhatia International Limited - India
- Coalindo Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Latin American Coal - Colombia
- Bangladesh Power Developement Board
- Ind-Barath Power Infra Limited - India
- Indogreen Group - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Krishnapatnam Port Company Ltd. - India
- Australian Coal Association
- Leighton Contractors Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
- Grasim Industreis Ltd - India
- Metalloyd Limited - United Kingdom
- European Bulk Services B.V. - Netherlands
- Samtan Co., Ltd - South Korea
- Kobexindo Tractors - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Medco Energi Mining Internasional
- Mercuria Energy - Indonesia
- Star Paper Mills Limited - India
- Siam City Cement PLC, Thailand
- White Energy Company Limited
- Parliament of New Zealand
- Semirara Mining Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Aditya Birla Group - India
- Kapuas Tunggal Persada - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Borneo Indobara - Indonesia
- Global Coal Blending Company Limited - Australia
- Bhushan Steel Limited - India
- Independent Power Producers Association of India
- Coastal Gujarat Power Limited - India
- Bulk Trading Sa - Switzerland
- SN Aboitiz Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Indian Energy Exchange, India
- Bhoruka Overseas - Indonesia
- Electricity Authority, New Zealand
- Romanian Commodities Exchange
- Gujarat Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Global Business Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Vizag Seaport Private Limited - India
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Commonwealth Bank - Australia
- PetroVietnam Power Coal Import and Supply Company
- Videocon Industries ltd - India
- Rashtriya Ispat Nigam Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Sree Jayajothi Cements Limited - India
- Thai Mozambique Logistica
- Renaissance Capital - South Africa
- SMC Global Power, Philippines
- Sinarmas Energy and Mining - Indonesia
- Larsen & Toubro Limited - India
- Salva Resources Pvt Ltd - India
- Interocean Group of Companies - India
- Formosa Plastics Group - Taiwan
- Baramulti Group, Indonesia
- Cement Manufacturers Association - India
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- OPG Power Generation Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Lanco Infratech Ltd - India
- London Commodity Brokers - England
- Energy Link Ltd, New Zealand
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
- San Jose City I Power Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Indika Energy - Indonesia
- PTC India Limited - India
- GN Power Mariveles Coal Plant, Philippines
- The State Trading Corporation of India Ltd
- Bharathi Cement Corporation - India
- Indonesian Coal Mining Association
- Pendopo Energi Batubara - Indonesia
- Therma Luzon, Inc, Philippines
- Power Finance Corporation Ltd., India
- PNOC Exploration Corporation - Philippines
- Uttam Galva Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Bukit Makmur.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Siam City Cement - Thailand
- Edison Trading Spa - Italy
- Jaiprakash Power Ventures ltd
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Mines - Canada
- Jindal Steel & Power Ltd - India
- Savvy Resources Ltd - HongKong
- Georgia Ports Authority, United States
- Meralco Power Generation, Philippines
- GMR Energy Limited - India
- Toyota Tsusho Corporation, Japan
- SMG Consultants - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- PowerSource Philippines DevCo
- Petrochimia International Co. Ltd.- Taiwan
- IEA Clean Coal Centre - UK
- Miang Besar Coal Terminal - Indonesia
- Central Electricity Authority - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- Standard Chartered Bank - UAE
- Sindya Power Generating Company Private Ltd
- Kartika Selabumi Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Africa Commodities Group - South Africa
- Dalmia Cement Bharat India
- Anglo American - United Kingdom
- Intertek Mineral Services - Indonesia
- Wood Mackenzie - Singapore
- Simpson Spence & Young - Indonesia
- Directorate Of Revenue Intelligence - India
- Mercator Lines Limited - India
- Mintek Dendrill Indonesia
- Kepco SPC Power Corporation, Philippines
- India Bulls Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Posco Energy - South Korea
- Billiton Holdings Pty Ltd - Australia
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Price Waterhouse Coopers - Russia
- New Zealand Coal & Carbon
- Maheswari Brothers Coal Limited - India
- Tata Chemicals Ltd - India
- Orica Mining Services - Indonesia
- Deloitte Consulting - India
- ICICI Bank Limited - India
- The University of Queensland
- Chettinad Cement Corporation Ltd - India
- Altura Mining Limited, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sakthi Sugars Limited - India
- Australian Commodity Traders Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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