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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, 13 May 10
ACTIVITY ON WEST COAST INDIA IS SLOWING - FEARNLEYS AS
DRY BULK CHARTERING
Handy
Atlantic markets remain firm but more for end May/beg June dates as there seems to be more enquiries for those dates. ...
Thursday, 13 May 10
DRY BULK SHIP OWNERS CHEERFUL AMID MARKET RALLY
China’s appetite for raw materials like iron ore and coal, as well as a series of added factors are boosting demand for dry bulk carriers, hel ...
Wednesday, 12 May 10
BANPU'S Q1 PROFIT SLIDES 43% TO B2.71BN - BANGKOK POST
The Bangkokpost reported that, Banpu Plc posted a first-quarter net profit of 2.71 billion baht, down by 43% from the same period last year.
The ...
Tuesday, 11 May 10
DALRYMPLE BAY COAL EXPORTS HIGHEST SINCE JULY; NEWCASTLE FALLS - BLOOMBERG
Bloomberg reported that, Coal shipments from Australia’s Dalrymple Bay terminal in Queensland state rose to the highest in nine months in Apri ...
Tuesday, 11 May 10
DRY BULK RATES SHOOT UP ON STRONG CARGO DEMAND
The dry bulk industry’s benchmark, the Baltic Dry Index (BDI) has kept its momentum, as predicted by analysts and shipping experts, managing t ...
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- Thiess Contractors Indonesia
- Wood Mackenzie - Singapore
- Indian Oil Corporation Limited
- Indika Energy - Indonesia
- Marubeni Corporation - India
- Grasim Industreis Ltd - India
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- IEA Clean Coal Centre - UK
- Wilmar Investment Holdings
- Thai Mozambique Logistica
- Minerals Council of Australia
- Coalindo Energy - Indonesia
- Vedanta Resources Plc - India
- Bahari Cakrawala Sebuku - Indonesia
- Economic Council, Georgia
- Directorate Of Revenue Intelligence - India
- PowerSource Philippines DevCo
- Kalimantan Lumbung Energi - Indonesia
- Latin American Coal - Colombia
- Essar Steel Hazira Ltd - India
- Eastern Coal Council - USA
- Heidelberg Cement - Germany
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- Anglo American - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- Meenaskhi Energy Private Limited - India
- Georgia Ports Authority, United States
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indo Tambangraya Megah - Indonesia
- Salva Resources Pvt Ltd - India
- London Commodity Brokers - England
- Globalindo Alam Lestari - Indonesia
- Meralco Power Generation, Philippines
- Pendopo Energi Batubara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement PLC, Thailand
- Planning Commission, India
- Global Green Power PLC Corporation, Philippines
- Rio Tinto Coal - Australia
- Straits Asia Resources Limited - Singapore
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Singapore Mercantile Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Coal and Oil Company - UAE
- Uttam Galva Steels Limited - India
- Power Finance Corporation Ltd., India
- The Treasury - Australian Government
- Simpson Spence & Young - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Petron Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Borneo Indobara - Indonesia
- Attock Cement Pakistan Limited
- Dalmia Cement Bharat India
- Central Java Power - Indonesia
- SMG Consultants - Indonesia
- Mercator Lines Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Merrill Lynch Commodities Europe
- India Bulls Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Altura Mining Limited, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Larsen & Toubro Limited - India
- Sakthi Sugars Limited - India
- Star Paper Mills Limited - India
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- Ministry of Finance - Indonesia
- Siam City Cement - Thailand
- Renaissance Capital - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Carbofer General Trading SA - India
- Gujarat Sidhee Cement - India
- Therma Luzon, Inc, Philippines
- South Luzon Thermal Energy Corporation
- Indian Energy Exchange, India
- Commonwealth Bank - Australia
- Central Electricity Authority - India
- Semirara Mining Corp, Philippines
- PTC India Limited - India
- Rashtriya Ispat Nigam Limited - India
- Goldman Sachs - Singapore
- Bharathi Cement Corporation - India
- CIMB Investment Bank - Malaysia
- Ambuja Cements Ltd - India
- Makarim & Taira - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Electricity Authority, New Zealand
- Chettinad Cement Corporation Ltd - India
- Metalloyd Limited - United Kingdom
- Bhoruka Overseas - Indonesia
- Bukit Makmur.PT - Indonesia
- Mercuria Energy - Indonesia
- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
- Orica Mining Services - Indonesia
- Baramulti Group, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- SN Aboitiz Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Eastern Energy - Thailand
- Standard Chartered Bank - UAE
- McConnell Dowell - Australia
- Alfred C Toepfer International GmbH - Germany
- Karbindo Abesyapradhi - Indoneisa
- Price Waterhouse Coopers - Russia
- The University of Queensland
- Directorate General of MIneral and Coal - Indonesia
- Cement Manufacturers Association - India
- Indogreen Group - Indonesia
- Global Coal Blending Company Limited - Australia
- Semirara Mining and Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Malabar Cements Ltd - India
- Africa Commodities Group - South Africa
- Parliament of New Zealand
- Videocon Industries ltd - India
- MS Steel International - UAE
- Billiton Holdings Pty Ltd - Australia
- ICICI Bank Limited - India
- Agrawal Coal Company - India
- Oldendorff Carriers - Singapore
- Interocean Group of Companies - India
- GMR Energy Limited - India
- Indonesian Coal Mining Association
- Savvy Resources Ltd - HongKong
- Kumho Petrochemical, South Korea
- Electricity Generating Authority of Thailand
- Bukit Baiduri Energy - Indonesia
- Sical Logistics Limited - India
- Global Business Power Corporation, Philippines
- Sojitz Corporation - Japan
- Medco Energi Mining Internasional
- Coastal Gujarat Power Limited - India
- Energy Development Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Vizag Seaport Private Limited - India
- Mjunction Services Limited - India
- VISA Power Limited - India
- Chamber of Mines of South Africa
- Tamil Nadu electricity Board
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- Manunggal Multi Energi - Indonesia
- Antam Resourcindo - Indonesia
- White Energy Company Limited
- Bhatia International Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Energy Link Ltd, New Zealand
- The State Trading Corporation of India Ltd
- International Coal Ventures Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Barasentosa Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- Formosa Plastics Group - Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Timah Investasi Mineral - Indoneisa
- San Jose City I Power Corp, Philippines
- Parry Sugars Refinery, India
- Australian Commodity Traders Exchange
- Aboitiz Power Corporation - Philippines
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Ind-Barath Power Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Kartika Selabumi Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- European Bulk Services B.V. - Netherlands
- Edison Trading Spa - Italy
- Bulk Trading Sa - Switzerland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- New Zealand Coal & Carbon
- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Karaikal Port Pvt Ltd - India
- Deloitte Consulting - India
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Xindia Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Posco Energy - South Korea
- GAC Shipping (India) Pvt Ltd
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Bhushan Steel Limited - India
- Romanian Commodities Exchange
- CNBM International Corporation - China
- Sindya Power Generating Company Private Ltd
- Australian Coal Association
- GVK Power & Infra Limited - India
- Ministry of Transport, Egypt
- Banpu Public Company Limited - Thailand
- Ceylon Electricity Board - Sri Lanka
- PNOC Exploration Corporation - Philippines
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