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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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Tuesday, 27 November 12
NEWCASTLE PORT HAS SHIPPED 1.79 MILLION TONS OF COAL W/E 26 NOVEMBER
COALspot.com - Newcastle port in Australia has loaded 1,793,841 MT of thermal and coking coal for week ended 0700 hours 26 November 2012, Newc ...
Sunday, 25 November 12
INDONESIA TO INDIA SUPRAMAX FREIGHT RATES ARE EXPECTED TO BE FIRM - VISTAAR
COALspot.com - The freight market was buoyant this week with all sectors up except for the Cape size index. The BDI was up by 5.21 pct closing at 10 ...
Sunday, 25 November 12
INDONESIAN SUB BITUMINOUS COAL SWAP CONTRACTS SLIDE
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for February 2013 delivery lost 0.76percent WoW but gained 0.16 percent DoD on Friday ...
Saturday, 24 November 12
DELTA DUNIA MAKMUR PRODUCES 3.2 MILLION TONS OF COAL IN OCTOBER
COALspot.com - PT Delta Dunia Makmur Tbk., has removed 31.1 million bcm* (-4.0% YoY) of Overburden in October 2012 totaled while coal production was ...
Friday, 23 November 12
CHOOSING THE RIGHT TIME TO INVEST IN NEW VESSELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Shipping is all about timing, a process often rising to the height of artform, as ship owners are having to pick the exact moment of selling most of ...
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- Bhoruka Overseas - Indonesia
- Agrawal Coal Company - India
- Formosa Plastics Group - Taiwan
- Aboitiz Power Corporation - Philippines
- Sojitz Corporation - Japan
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- Ind-Barath Power Infra Limited - India
- PowerSource Philippines DevCo
- Ministry of Transport, Egypt
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Edison Trading Spa - Italy
- MS Steel International - UAE
- Bukit Baiduri Energy - Indonesia
- Mercuria Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Cement Manufacturers Association - India
- Mintek Dendrill Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- White Energy Company Limited
- Binh Thuan Hamico - Vietnam
- Malabar Cements Ltd - India
- Global Business Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Rio Tinto Coal - Australia
- Samtan Co., Ltd - South Korea
- Ministry of Finance - Indonesia
- Parliament of New Zealand
- The State Trading Corporation of India Ltd
- Sinarmas Energy and Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Petron Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Dalmia Cement Bharat India
- CNBM International Corporation - China
- Kobexindo Tractors - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Riau Bara Harum - Indonesia
- Coal and Oil Company - UAE
- Thiess Contractors Indonesia
- Planning Commission, India
- Singapore Mercantile Exchange
- South Luzon Thermal Energy Corporation
- Gujarat Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Indo Tambangraya Megah - Indonesia
- International Coal Ventures Pvt Ltd - India
- Energy Development Corp, Philippines
- Tamil Nadu electricity Board
- GAC Shipping (India) Pvt Ltd
- Sical Logistics Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Vizag Seaport Private Limited - India
- Renaissance Capital - South Africa
- Holcim Trading Pte Ltd - Singapore
- Manunggal Multi Energi - Indonesia
- Tata Chemicals Ltd - India
- Indika Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- GVK Power & Infra Limited - India
- Thai Mozambique Logistica
- VISA Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Attock Cement Pakistan Limited
- Billiton Holdings Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Jaiprakash Power Ventures ltd
- Vijayanagar Sugar Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Commonwealth Bank - Australia
- Makarim & Taira - Indonesia
- Jindal Steel & Power Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Savvy Resources Ltd - HongKong
- McConnell Dowell - Australia
- Economic Council, Georgia
- Aditya Birla Group - India
- Trasteel International SA, Italy
- Global Green Power PLC Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Orica Mining Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Indonesian Coal Mining Association
- Bhatia International Limited - India
- Videocon Industries ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Uttam Galva Steels Limited - India
- The Treasury - Australian Government
- Eastern Coal Council - USA
- Bulk Trading Sa - Switzerland
- Larsen & Toubro Limited - India
- Marubeni Corporation - India
- Simpson Spence & Young - Indonesia
- Australian Coal Association
- Siam City Cement PLC, Thailand
- Price Waterhouse Coopers - Russia
- Borneo Indobara - Indonesia
- European Bulk Services B.V. - Netherlands
- SMG Consultants - Indonesia
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- TeaM Sual Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Indian Oil Corporation Limited
- Sindya Power Generating Company Private Ltd
- Heidelberg Cement - Germany
- Central Java Power - Indonesia
- Ministry of Mines - Canada
- Kumho Petrochemical, South Korea
- Bangladesh Power Developement Board
- Port Waratah Coal Services - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ambuja Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Romanian Commodities Exchange
- Maheswari Brothers Coal Limited - India
- Baramulti Group, Indonesia
- Australian Commodity Traders Exchange
- SMC Global Power, Philippines
- IHS Mccloskey Coal Group - USA
- LBH Netherlands Bv - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Sidhee Cement - India
- Posco Energy - South Korea
- Kartika Selabumi Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- Mercator Lines Limited - India
- GMR Energy Limited - India
- Therma Luzon, Inc, Philippines
- Merrill Lynch Commodities Europe
- Anglo American - United Kingdom
- Timah Investasi Mineral - Indoneisa
- Karaikal Port Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- New Zealand Coal & Carbon
- OPG Power Generation Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Chamber of Mines of South Africa
- Salva Resources Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Eastern Energy - Thailand
- Central Electricity Authority - India
- PTC India Limited - India
- SN Aboitiz Power Inc, Philippines
- Bharathi Cement Corporation - India
- Indian Energy Exchange, India
- London Commodity Brokers - England
- Coastal Gujarat Power Limited - India
- Star Paper Mills Limited - India
- Global Coal Blending Company Limited - Australia
- San Jose City I Power Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Indogreen Group - Indonesia
- Standard Chartered Bank - UAE
- Kapuas Tunggal Persada - Indonesia
- Meralco Power Generation, Philippines
- Oldendorff Carriers - Singapore
- Electricity Authority, New Zealand
- Bhushan Steel Limited - India
- Goldman Sachs - Singapore
- Sarangani Energy Corporation, Philippines
- Coalindo Energy - Indonesia
- Altura Mining Limited, Indonesia
- Chettinad Cement Corporation Ltd - India
- ASAPP Information Group - India
- Gujarat Mineral Development Corp Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Sakthi Sugars Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Intertek Mineral Services - Indonesia
- Wood Mackenzie - Singapore
- Africa Commodities Group - South Africa
- Minerals Council of Australia
- Grasim Industreis Ltd - India
- Georgia Ports Authority, United States
- Iligan Light & Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- AsiaOL BioFuels Corp., Philippines
- Cigading International Bulk Terminal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Lanco Infratech Ltd - India
- Directorate Of Revenue Intelligence - India
- Karbindo Abesyapradhi - Indoneisa
- Orica Australia Pty. Ltd.
- Barasentosa Lestari - Indonesia
- Parry Sugars Refinery, India
- Mjunction Services Limited - India
- Sree Jayajothi Cements Limited - India
- Interocean Group of Companies - India
- Antam Resourcindo - Indonesia
- Electricity Generating Authority of Thailand
- The University of Queensland
- Madhucon Powers Ltd - India
- Vedanta Resources Plc - India
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Latin American Coal - Colombia
- Xindia Steels Limited - India
- Siam City Cement - Thailand
- Ceylon Electricity Board - Sri Lanka
- Kideco Jaya Agung - Indonesia
- CIMB Investment Bank - Malaysia
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
- Medco Energi Mining Internasional
- Wilmar Investment Holdings
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