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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, 22 November 12
HANDY: INDO-INDIA, LARGE ECO SUPRA NOW FIXED AT USD 12500 - FEARNRESEARCH
Handy
The north Continent is seeing plenty of tonnages but lack of cargoes. TA business are around 11k and fronthaul is around 17k.Tonnages has tig ...
Thursday, 22 November 12
DRY BULK MARKET RISE, BUT OUTLOOK SEEN DIM ON THE BACK OF RECORD NEW BUILDING DELIVERIES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has been under hefty pressure since the start of the year, as a result of record newbuilding deliveries and below-par demand for ...
Wednesday, 21 November 12
LITTLE IMPACT FROM DISSOLUTION OF BP MIGAS ON INDONESIAN OIL & GAS COMPANIES - FITCH
Fitch Ratings has said that the recent court order to abolish the Indonesian upstream oil and gas regulator, BP Migas, has minimal immediate impact ...
Wednesday, 21 November 12
ORPHEUS ENERGY SECURES FIRST COAL OFF TAKE CONTRACT
COALspot.com - Orpheus Energy Limited (ASX:OEG) has announced that it has signed a coal sales contract with an Indonesian steel manufacturing compan ...
Tuesday, 20 November 12
AUSTRALIAN NEWCASTLE PORT HAS LOADED 13.18 PERCENT LESS COAL W-W
COALspot.com - Newcastle port in Australia has loaded 2,691,731 MT of thermal and coking coal for week ended 0700 hours 19 November 2012, Newc ...
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- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GVK Power & Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhushan Steel Limited - India
- Larsen & Toubro Limited - India
- Energy Development Corp, Philippines
- Coastal Gujarat Power Limited - India
- Ministry of Mines - Canada
- Interocean Group of Companies - India
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Deloitte Consulting - India
- Bhoruka Overseas - Indonesia
- Medco Energi Mining Internasional
- Tata Chemicals Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Anglo American - United Kingdom
- Jindal Steel & Power Ltd - India
- Minerals Council of Australia
- Central Electricity Authority - India
- LBH Netherlands Bv - Netherlands
- Bhatia International Limited - India
- Eastern Coal Council - USA
- Posco Energy - South Korea
- Global Green Power PLC Corporation, Philippines
- Coalindo Energy - Indonesia
- Africa Commodities Group - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Mercator Lines Limited - India
- Port Waratah Coal Services - Australia
- White Energy Company Limited
- The University of Queensland
- International Coal Ventures Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Holcim Trading Pte Ltd - Singapore
- Australian Coal Association
- ICICI Bank Limited - India
- Ministry of Transport, Egypt
- Chamber of Mines of South Africa
- Planning Commission, India
- Asmin Koalindo Tuhup - Indonesia
- Mjunction Services Limited - India
- Uttam Galva Steels Limited - India
- Wood Mackenzie - Singapore
- Petron Corporation, Philippines
- Xindia Steels Limited - India
- Bulk Trading Sa - Switzerland
- Ambuja Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Bangladesh Power Developement Board
- Gujarat Sidhee Cement - India
- Energy Link Ltd, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Orica Australia Pty. Ltd.
- TNB Fuel Sdn Bhd - Malaysia
- London Commodity Brokers - England
- Binh Thuan Hamico - Vietnam
- Sindya Power Generating Company Private Ltd
- Thai Mozambique Logistica
- Leighton Contractors Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Manunggal Multi Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karaikal Port Pvt Ltd - India
- Sojitz Corporation - Japan
- AsiaOL BioFuels Corp., Philippines
- Australian Commodity Traders Exchange
- Romanian Commodities Exchange
- Edison Trading Spa - Italy
- Ministry of Finance - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- Barasentosa Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Indogreen Group - Indonesia
- Global Coal Blending Company Limited - Australia
- Lanco Infratech Ltd - India
- Mercuria Energy - Indonesia
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
- Baramulti Group, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Straits Asia Resources Limited - Singapore
- Alfred C Toepfer International GmbH - Germany
- Sree Jayajothi Cements Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sical Logistics Limited - India
- SMC Global Power, Philippines
- Formosa Plastics Group - Taiwan
- San Jose City I Power Corp, Philippines
- The Treasury - Australian Government
- Gujarat Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- Semirara Mining Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Globalindo Alam Lestari - Indonesia
- Electricity Generating Authority of Thailand
- PTC India Limited - India
- Maheswari Brothers Coal Limited - India
- Essar Steel Hazira Ltd - India
- Bharathi Cement Corporation - India
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- Metalloyd Limited - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Tamil Nadu electricity Board
- Merrill Lynch Commodities Europe
- PNOC Exploration Corporation - Philippines
- Orica Mining Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Wilmar Investment Holdings
- Ceylon Electricity Board - Sri Lanka
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- Sinarmas Energy and Mining - Indonesia
- Attock Cement Pakistan Limited
- OPG Power Generation Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Thiess Contractors Indonesia
- Latin American Coal - Colombia
- Indian Oil Corporation Limited
- Indian Energy Exchange, India
- Miang Besar Coal Terminal - Indonesia
- Central Java Power - Indonesia
- SMG Consultants - Indonesia
- Marubeni Corporation - India
- Aboitiz Power Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Power Finance Corporation Ltd., India
- Pendopo Energi Batubara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Riau Bara Harum - Indonesia
- Indo Tambangraya Megah - Indonesia
- Antam Resourcindo - Indonesia
- Kumho Petrochemical, South Korea
- Jaiprakash Power Ventures ltd
- Vedanta Resources Plc - India
- New Zealand Coal & Carbon
- Altura Mining Limited, Indonesia
- Grasim Industreis Ltd - India
- Global Business Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Kaltim Prima Coal - Indonesia
- Dalmia Cement Bharat India
- Madhucon Powers Ltd - India
- Agrawal Coal Company - India
- Eastern Energy - Thailand
- Therma Luzon, Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Siam City Cement PLC, Thailand
- Kobexindo Tractors - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Kohat Cement Company Ltd. - Pakistan
- Kepco SPC Power Corporation, Philippines
- Videocon Industries ltd - India
- CIMB Investment Bank - Malaysia
- Iligan Light & Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Coal and Oil Company - UAE
- Standard Chartered Bank - UAE
- Bukit Makmur.PT - Indonesia
- Renaissance Capital - South Africa
- Meralco Power Generation, Philippines
- Intertek Mineral Services - Indonesia
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Rio Tinto Coal - Australia
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
- MS Steel International - UAE
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- Trasteel International SA, Italy
- GN Power Mariveles Coal Plant, Philippines
- TeaM Sual Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Mintek Dendrill Indonesia
- Oldendorff Carriers - Singapore
- Singapore Mercantile Exchange
- Rashtriya Ispat Nigam Limited - India
- McConnell Dowell - Australia
- European Bulk Services B.V. - Netherlands
- Borneo Indobara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ASAPP Information Group - India
- Savvy Resources Ltd - HongKong
- Bayan Resources Tbk. - Indonesia
- Commonwealth Bank - Australia
- PowerSource Philippines DevCo
- Ind-Barath Power Infra Limited - India
- Parry Sugars Refinery, India
- Carbofer General Trading SA - India
- Economic Council, Georgia
- Directorate Of Revenue Intelligence - India
- India Bulls Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- SN Aboitiz Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Indika Energy - Indonesia
- Aditya Birla Group - India
- Star Paper Mills Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- Makarim & Taira - Indonesia
- Kartika Selabumi Mining - Indonesia
- IEA Clean Coal Centre - UK
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