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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, 18 September 13
DRY BULK MARKET CONTINUED TO ADVANCE - INTERMODAL
Chartering (Wet: Stable- / Dry: Firm+ )
The Dry Bulk market continued to advance at a very fast pace, with the BDI closing off the week north ...
Tuesday, 17 September 13
BUMA PRODUCED 3.57 PERCENT MORE COAL IN AUGUST
COALspot.com: BUMA has removed totaled 25.20 million bcm of overburden to produce 2.90 million tons coal in August 2013. BUMI produced 3.07 percent ...
Tuesday, 17 September 13
NEWCASTLE PORT SHIPPED ABOUT 27 PERCENT MORE COAL WEEK ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 27.26 per cent week on week to 3.01 million mt for ...
Tuesday, 17 September 13
TAIPOWER INVITES BIDS FOR SUPPLY OF SUB-BITUMINOUS COAL
COALspot.com - Taiwan Power Company intends to procure 1.050 million tons of sub-bituminous coal for Taipower thermal power plant through open tende ...
Tuesday, 17 September 13
ORPHEUS SECURES SIGNIFICANT INFRASTRUCTURE DEAL THROUGH ACQUISITION OF SOUTH KALIMANTAN PORT CAPACITY
COALspot.com : Orpheus Energy Limited (ASX: OEG) of Australia has today announced that, it has executed a binding agreement with the proprietor of S ...
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- Antam Resourcindo - Indonesia
- Power Finance Corporation Ltd., India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wilmar Investment Holdings
- Heidelberg Cement - Germany
- Intertek Mineral Services - Indonesia
- Port Waratah Coal Services - Australia
- The State Trading Corporation of India Ltd
- Goldman Sachs - Singapore
- Medco Energi Mining Internasional
- Kalimantan Lumbung Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Carbofer General Trading SA - India
- Bukit Asam (Persero) Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kideco Jaya Agung - Indonesia
- Metalloyd Limited - United Kingdom
- Deloitte Consulting - India
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- Romanian Commodities Exchange
- Petron Corporation, Philippines
- Merrill Lynch Commodities Europe
- GAC Shipping (India) Pvt Ltd
- Star Paper Mills Limited - India
- Therma Luzon, Inc, Philippines
- Ind-Barath Power Infra Limited - India
- ICICI Bank Limited - India
- Kepco SPC Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- McConnell Dowell - Australia
- Thai Mozambique Logistica
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Madhucon Powers Ltd - India
- Mintek Dendrill Indonesia
- Formosa Plastics Group - Taiwan
- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- Larsen & Toubro Limited - India
- Gujarat Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Ambuja Cements Ltd - India
- Chamber of Mines of South Africa
- CIMB Investment Bank - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- Parliament of New Zealand
- Karaikal Port Pvt Ltd - India
- India Bulls Power Limited - India
- Marubeni Corporation - India
- Malabar Cements Ltd - India
- Central Electricity Authority - India
- Kapuas Tunggal Persada - Indonesia
- Cement Manufacturers Association - India
- Gujarat Sidhee Cement - India
- Semirara Mining Corp, Philippines
- Barasentosa Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Anglo American - United Kingdom
- Economic Council, Georgia
- Bulk Trading Sa - Switzerland
- Sinarmas Energy and Mining - Indonesia
- New Zealand Coal & Carbon
- Georgia Ports Authority, United States
- Tamil Nadu electricity Board
- Directorate Of Revenue Intelligence - India
- Ministry of Transport, Egypt
- Indian Oil Corporation Limited
- CNBM International Corporation - China
- Kartika Selabumi Mining - Indonesia
- Standard Chartered Bank - UAE
- PNOC Exploration Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Trasteel International SA, Italy
- Sical Logistics Limited - India
- Bukit Makmur.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- San Jose City I Power Corp, Philippines
- Indogreen Group - Indonesia
- Uttam Galva Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vizag Seaport Private Limited - India
- The Treasury - Australian Government
- Petrochimia International Co. Ltd.- Taiwan
- Iligan Light & Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- Mercuria Energy - Indonesia
- Electricity Authority, New Zealand
- Indika Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Kumho Petrochemical, South Korea
- Straits Asia Resources Limited - Singapore
- Dalmia Cement Bharat India
- SMG Consultants - Indonesia
- Meenaskhi Energy Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- MS Steel International - UAE
- Singapore Mercantile Exchange
- Kohat Cement Company Ltd. - Pakistan
- London Commodity Brokers - England
- Videocon Industries ltd - India
- Interocean Group of Companies - India
- Gujarat Mineral Development Corp Ltd - India
- Bukit Baiduri Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Minerals Council of Australia
- Posco Energy - South Korea
- Indo Tambangraya Megah - Indonesia
- Riau Bara Harum - Indonesia
- Essar Steel Hazira Ltd - India
- Samtan Co., Ltd - South Korea
- Coal and Oil Company - UAE
- Kobexindo Tractors - Indoneisa
- Toyota Tsusho Corporation, Japan
- Krishnapatnam Port Company Ltd. - India
- IEA Clean Coal Centre - UK
- GVK Power & Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- PowerSource Philippines DevCo
- Siam City Cement PLC, Thailand
- Central Java Power - Indonesia
- Sojitz Corporation - Japan
- GMR Energy Limited - India
- Billiton Holdings Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Ministry of Mines - Canada
- SN Aboitiz Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- VISA Power Limited - India
- Renaissance Capital - South Africa
- Planning Commission, India
- Makarim & Taira - Indonesia
- European Bulk Services B.V. - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Parry Sugars Refinery, India
- Coastal Gujarat Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Meralco Power Generation, Philippines
- Bangladesh Power Developement Board
- Bhushan Steel Limited - India
- Sakthi Sugars Limited - India
- Commonwealth Bank - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Energy Link Ltd, New Zealand
- Kaltim Prima Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Orica Australia Pty. Ltd.
- Mjunction Services Limited - India
- Alfred C Toepfer International GmbH - Germany
- Jorong Barutama Greston.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- Mercator Lines Limited - India
- TeaM Sual Corporation - Philippines
- Orica Mining Services - Indonesia
- Grasim Industreis Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Wood Mackenzie - Singapore
- Bhatia International Limited - India
- SMC Global Power, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Jaiprakash Power Ventures ltd
- Latin American Coal - Colombia
- Rio Tinto Coal - Australia
- Salva Resources Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Agrawal Coal Company - India
- LBH Netherlands Bv - Netherlands
- Binh Thuan Hamico - Vietnam
- Timah Investasi Mineral - Indoneisa
- Indian Energy Exchange, India
- ASAPP Information Group - India
- Pendopo Energi Batubara - Indonesia
- Jindal Steel & Power Ltd - India
- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Indonesian Coal Mining Association
- The University of Queensland
- Neyveli Lignite Corporation Ltd, - India
- Maheswari Brothers Coal Limited - India
- Xindia Steels Limited - India
- PTC India Limited - India
- Edison Trading Spa - Italy
- Banpu Public Company Limited - Thailand
- Africa Commodities Group - South Africa
- Aditya Birla Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Commodity Traders Exchange
- White Energy Company Limited
- Simpson Spence & Young - Indonesia
- Independent Power Producers Association of India
- Eastern Coal Council - USA
- Borneo Indobara - Indonesia
- Eastern Energy - Thailand
- Vedanta Resources Plc - India
- Ministry of Finance - Indonesia
- Attock Cement Pakistan Limited
- Australian Coal Association
- Coalindo Energy - Indonesia
- Energy Development Corp, Philippines
- Thiess Contractors Indonesia
- South Luzon Thermal Energy Corporation
- Sree Jayajothi Cements Limited - India
- Price Waterhouse Coopers - Russia
- Baramulti Group, Indonesia
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