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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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Saturday, 08 August 09
TWO / THREE YEAR CHARTER RATES FOR SUPRAMAX IS AROUND US$ 15,000-16,000 PER DAY - CAPT. REDDY
COALspot.com (Singapore): The dry bulk market tumbled this week and the BDI dropped by almost 17% and closed at 2,772 points.
The cape and panam ...
Saturday, 08 August 09
SULTAN MINING SIGNS P8-BILLION, 10-YEAR COAL-SUPPLY CONTRACT WITH KEPCO POWER CORP.
COAL developer Sultan Mining and Energy Development Corp. (SMEDC) reported on Thursday that its subsidiary MG Mining and Energy Corp. signed an P8-b ...
Friday, 07 August 09
NEED TO HIKE DOMESTIC PRICES - COAL INDIA
WSJ reported that, The chairman of Coal India Ltd., the country's biggest coal producer, Friday said there was a need to hike domestic coal prices ...
Friday, 07 August 09
INDONESIA COAL NEWS UPDATES
PTBA to Produce 13 Million Tons
President Director of Tambang Batubara Bukit Asam (PTBA), Sukrisno has estimated coal production of the company th ...
Friday, 07 August 09
BALTIC DRY INDEX HAS WORST WEEK SINCE OCTOBER AS DEMAND SLOWS
Bloomberg reported that, The Baltic Dry Index, a measure of shipping costs for commodities, had its worst week since October as Chinese demand for s ...
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- Sree Jayajothi Cements Limited - India
- Krishnapatnam Port Company Ltd. - India
- PowerSource Philippines DevCo
- Lanco Infratech Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Maharashtra Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Energy Link Ltd, New Zealand
- Thai Mozambique Logistica
- ASAPP Information Group - India
- Directorate General of MIneral and Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Bharathi Cement Corporation - India
- Independent Power Producers Association of India
- Simpson Spence & Young - Indonesia
- GMR Energy Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Wood Mackenzie - Singapore
- IHS Mccloskey Coal Group - USA
- Karbindo Abesyapradhi - Indoneisa
- Vizag Seaport Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Jaiprakash Power Ventures ltd
- Indogreen Group - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Thiess Contractors Indonesia
- GAC Shipping (India) Pvt Ltd
- Kideco Jaya Agung - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Indian Oil Corporation Limited
- Samtan Co., Ltd - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Directorate Of Revenue Intelligence - India
- Sojitz Corporation - Japan
- Posco Energy - South Korea
- Indika Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Mercator Lines Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Energy Development Corp, Philippines
- Dalmia Cement Bharat India
- Rio Tinto Coal - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Bhatia International Limited - India
- Medco Energi Mining Internasional
- Indo Tambangraya Megah - Indonesia
- Mercuria Energy - Indonesia
- Sical Logistics Limited - India
- Ministry of Mines - Canada
- Kobexindo Tractors - Indoneisa
- Tamil Nadu electricity Board
- Semirara Mining Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- Gujarat Sidhee Cement - India
- Salva Resources Pvt Ltd - India
- SMC Global Power, Philippines
- Renaissance Capital - South Africa
- Bangladesh Power Developement Board
- New Zealand Coal & Carbon
- Altura Mining Limited, Indonesia
- The University of Queensland
- Anglo American - United Kingdom
- Oldendorff Carriers - Singapore
- CNBM International Corporation - China
- Madhucon Powers Ltd - India
- Africa Commodities Group - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Marubeni Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Singapore Mercantile Exchange
- Romanian Commodities Exchange
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- Coal and Oil Company - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- Port Waratah Coal Services - Australia
- Bukit Baiduri Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Indonesian Coal Mining Association
- SN Aboitiz Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Mjunction Services Limited - India
- Eastern Energy - Thailand
- Sindya Power Generating Company Private Ltd
- Attock Cement Pakistan Limited
- LBH Netherlands Bv - Netherlands
- Wilmar Investment Holdings
- Bhushan Steel Limited - India
- Karaikal Port Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Orica Mining Services - Indonesia
- Antam Resourcindo - Indonesia
- Parry Sugars Refinery, India
- Agrawal Coal Company - India
- Globalindo Alam Lestari - Indonesia
- Baramulti Group, Indonesia
- Jindal Steel & Power Ltd - India
- Global Coal Blending Company Limited - Australia
- San Jose City I Power Corp, Philippines
- Bulk Trading Sa - Switzerland
- Merrill Lynch Commodities Europe
- Trasteel International SA, Italy
- Sinarmas Energy and Mining - Indonesia
- Carbofer General Trading SA - India
- Borneo Indobara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- IEA Clean Coal Centre - UK
- Electricity Generating Authority of Thailand
- Cement Manufacturers Association - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Transport, Egypt
- Edison Trading Spa - Italy
- Coastal Gujarat Power Limited - India
- Tata Chemicals Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Global Green Power PLC Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- Billiton Holdings Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- Commonwealth Bank - Australia
- Bukit Makmur.PT - Indonesia
- Ambuja Cements Ltd - India
- Videocon Industries ltd - India
- Semirara Mining and Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- PNOC Exploration Corporation - Philippines
- ICICI Bank Limited - India
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- Meralco Power Generation, Philippines
- Global Business Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- SMG Consultants - Indonesia
- TeaM Sual Corporation - Philippines
- Economic Council, Georgia
- Holcim Trading Pte Ltd - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vedanta Resources Plc - India
- Savvy Resources Ltd - HongKong
- Siam City Cement PLC, Thailand
- South Luzon Thermal Energy Corporation
- Standard Chartered Bank - UAE
- Chamber of Mines of South Africa
- OPG Power Generation Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Planning Commission, India
- Kohat Cement Company Ltd. - Pakistan
- Georgia Ports Authority, United States
- Banpu Public Company Limited - Thailand
- AsiaOL BioFuels Corp., Philippines
- Price Waterhouse Coopers - Russia
- Bhoruka Overseas - Indonesia
- Ministry of Finance - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Coal Council - USA
- CIMB Investment Bank - Malaysia
- Formosa Plastics Group - Taiwan
- The State Trading Corporation of India Ltd
- Ceylon Electricity Board - Sri Lanka
- London Commodity Brokers - England
- Parliament of New Zealand
- Manunggal Multi Energi - Indonesia
- Kumho Petrochemical, South Korea
- Power Finance Corporation Ltd., India
- Central Electricity Authority - India
- Deloitte Consulting - India
- The Treasury - Australian Government
- Maheswari Brothers Coal Limited - India
- Petron Corporation, Philippines
- Xindia Steels Limited - India
- MS Steel International - UAE
- India Bulls Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Iligan Light & Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Makarim & Taira - Indonesia
- Sakthi Sugars Limited - India
- Coalindo Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- McConnell Dowell - Australia
- European Bulk Services B.V. - Netherlands
- GVK Power & Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- Minerals Council of Australia
- Straits Asia Resources Limited - Singapore
- Goldman Sachs - Singapore
- Uttam Galva Steels Limited - India
- Indian Energy Exchange, India
- White Energy Company Limited
- PTC India Limited - India
- Aditya Birla Group - India
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Malabar Cements Ltd - India
- VISA Power Limited - India
- Riau Bara Harum - Indonesia
- Sarangani Energy Corporation, Philippines
- Toyota Tsusho Corporation, Japan
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