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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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- Kaltim Prima Coal - Indonesia
- Parry Sugars Refinery, India
- CIMB Investment Bank - Malaysia
- Deloitte Consulting - India
- Bukit Asam (Persero) Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Karaikal Port Pvt Ltd - India
- Coalindo Energy - Indonesia
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- India Bulls Power Limited - India
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- Indika Energy - Indonesia
- The University of Queensland
- Eastern Energy - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Chamber of Mines of South Africa
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Wood Mackenzie - Singapore
- Power Finance Corporation Ltd., India
- Riau Bara Harum - Indonesia
- Directorate Of Revenue Intelligence - India
- Antam Resourcindo - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Planning Commission, India
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kumho Petrochemical, South Korea
- Georgia Ports Authority, United States
- Merrill Lynch Commodities Europe
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Manunggal Multi Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Toyota Tsusho Corporation, Japan
- Interocean Group of Companies - India
- GN Power Mariveles Coal Plant, Philippines
- Meenaskhi Energy Private Limited - India
- Indo Tambangraya Megah - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Banpu Public Company Limited - Thailand
- San Jose City I Power Corp, Philippines
- Tata Chemicals Ltd - India
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
- Marubeni Corporation - India
- Central Electricity Authority - India
- Bharathi Cement Corporation - India
- Straits Asia Resources Limited - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Independent Power Producers Association of India
- Edison Trading Spa - Italy
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bangladesh Power Developement Board
- Vedanta Resources Plc - India
- Australian Coal Association
- PTC India Limited - India
- Lanco Infratech Ltd - India
- OPG Power Generation Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Videocon Industries ltd - India
- Sakthi Sugars Limited - India
- Bukit Baiduri Energy - Indonesia
- SMG Consultants - Indonesia
- Eastern Coal Council - USA
- Kartika Selabumi Mining - Indonesia
- Thiess Contractors Indonesia
- Trasteel International SA, Italy
- Rio Tinto Coal - Australia
- Essar Steel Hazira Ltd - India
- Ambuja Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Larsen & Toubro Limited - India
- Renaissance Capital - South Africa
- Cement Manufacturers Association - India
- Jorong Barutama Greston.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Oldendorff Carriers - Singapore
- Bukit Makmur.PT - Indonesia
- Orica Australia Pty. Ltd.
- Samtan Co., Ltd - South Korea
- Standard Chartered Bank - UAE
- Binh Thuan Hamico - Vietnam
- Coastal Gujarat Power Limited - India
- Bhushan Steel Limited - India
- Jindal Steel & Power Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Coal and Oil Company - UAE
- Therma Luzon, Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Mintek Dendrill Indonesia
- Ministry of Finance - Indonesia
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- SMC Global Power, Philippines
- Leighton Contractors Pty Ltd - Australia
- Sojitz Corporation - Japan
- Romanian Commodities Exchange
- Vizag Seaport Private Limited - India
- White Energy Company Limited
- Wilmar Investment Holdings
- Bhatia International Limited - India
- Jaiprakash Power Ventures ltd
- South Luzon Thermal Energy Corporation
- McConnell Dowell - Australia
- Parliament of New Zealand
- Intertek Mineral Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Africa Commodities Group - South Africa
- Sindya Power Generating Company Private Ltd
- Makarim & Taira - Indonesia
- Bulk Trading Sa - Switzerland
- Billiton Holdings Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Mercuria Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement - Thailand
- Savvy Resources Ltd - HongKong
- Agrawal Coal Company - India
- Malabar Cements Ltd - India
- London Commodity Brokers - England
- Aboitiz Power Corporation - Philippines
- Dalmia Cement Bharat India
- Madhucon Powers Ltd - India
- Electricity Authority, New Zealand
- Tamil Nadu electricity Board
- Maharashtra Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement PLC, Thailand
- ASAPP Information Group - India
- Global Coal Blending Company Limited - Australia
- Economic Council, Georgia
- VISA Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Anglo American - United Kingdom
- Pendopo Energi Batubara - Indonesia
- ICICI Bank Limited - India
- Medco Energi Mining Internasional
- Indian Oil Corporation Limited
- Star Paper Mills Limited - India
- Semirara Mining and Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Australian Commodity Traders Exchange
- Asmin Koalindo Tuhup - Indonesia
- GMR Energy Limited - India
- Uttam Galva Steels Limited - India
- Semirara Mining Corp, Philippines
- Salva Resources Pvt Ltd - India
- Borneo Indobara - Indonesia
- Aditya Birla Group - India
- Maheswari Brothers Coal Limited - India
- IEA Clean Coal Centre - UK
- Bank of Tokyo Mitsubishi UFJ Ltd
- Price Waterhouse Coopers - Russia
- Sree Jayajothi Cements Limited - India
- Ministry of Mines - Canada
- Ind-Barath Power Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PowerSource Philippines DevCo
- Sarangani Energy Corporation, Philippines
- Latin American Coal - Colombia
- Mjunction Services Limited - India
- PNOC Exploration Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Minerals Council of Australia
- Indonesian Coal Mining Association
- Port Waratah Coal Services - Australia
- Baramulti Group, Indonesia
- Indogreen Group - Indonesia
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Petron Corporation, Philippines
- Global Business Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Goldman Sachs - Singapore
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- The State Trading Corporation of India Ltd
- Orica Mining Services - Indonesia
- Grasim Industreis Ltd - India
- Chettinad Cement Corporation Ltd - India
- GVK Power & Infra Limited - India
- Singapore Mercantile Exchange
- Ministry of Transport, Egypt
- LBH Netherlands Bv - Netherlands
- Alfred C Toepfer International GmbH - Germany
- CNBM International Corporation - China
- Gujarat Mineral Development Corp Ltd - India
- SN Aboitiz Power Inc, Philippines
- Indian Energy Exchange, India
- Carbofer General Trading SA - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercator Lines Limited - India
- Globalindo Alam Lestari - Indonesia
- New Zealand Coal & Carbon
- Sical Logistics Limited - India
- Timah Investasi Mineral - Indoneisa
- Heidelberg Cement - Germany
- Posco Energy - South Korea
- The Treasury - Australian Government
- Thai Mozambique Logistica
- Attock Cement Pakistan Limited
- Miang Besar Coal Terminal - Indonesia
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