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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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Friday, 16 November 12
SHIP OWNERS KEEP ON INVESTING IN SECOND HAND VESSELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Priced attractively, modern and with prompt delivery dates, second hand vessels are proving to be rather popular among cash-rich ship owners these d ...
Friday, 16 November 12
HANDY : IRON ORE WAS QUIET AND RATES FROM INDIA TO CHINA AROUND USD 5500
Handy
The Atlantic was weak with more supply of ships. Rates from Continent/ Feast at USD 9000 and from USG/China at USD 15k. The Pacific market re ...
Wednesday, 14 November 12
AUSTRALIAN NEWCASTLE PORT HAS LOADED 11.14 PERCENT MORE COAL W-W
COALspot.com - Newcastle port in Australia has loaded 3,100,686 MT of thermal and coking coal for week ended – 0700 hours 12 November 2012, Ne ...
Tuesday, 13 November 12
INITIAL COAL PRODUCTION AT KATINGAN RIA ON TRACK FOR 2013 FOLLOWING GRANTING OF 'IN PRINCIPLE' FORESTRY PERMIT, INDONESIA
Realm Resources Ltd (“Realm” or the “Company” - ASX: RRP) has announced that its application to upgrade its exploration fore ...
Tuesday, 13 November 12
BULK PORTS & TECHNOLOGY ASIA 2013
Press Release - TOC Events are pleased to announce a new addition to our global portfolio with the launch of the inaugural Bulk Ports & Technolo ...
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- GAC Shipping (India) Pvt Ltd
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- San Jose City I Power Corp, Philippines
- Metalloyd Limited - United Kingdom
- Renaissance Capital - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Borneo Indobara - Indonesia
- Indian Energy Exchange, India
- Wilmar Investment Holdings
- Karaikal Port Pvt Ltd - India
- SMC Global Power, Philippines
- Ministry of Transport, Egypt
- Gujarat Sidhee Cement - India
- MS Steel International - UAE
- Central Java Power - Indonesia
- Essar Steel Hazira Ltd - India
- Economic Council, Georgia
- Antam Resourcindo - Indonesia
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- TeaM Sual Corporation - Philippines
- Malabar Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Commonwealth Bank - Australia
- Maharashtra Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- Coalindo Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Ministry of Mines - Canada
- Latin American Coal - Colombia
- SN Aboitiz Power Inc, Philippines
- Trasteel International SA, Italy
- Bhushan Steel Limited - India
- Dalmia Cement Bharat India
- Medco Energi Mining Internasional
- Bahari Cakrawala Sebuku - Indonesia
- Posco Energy - South Korea
- McConnell Dowell - Australia
- Grasim Industreis Ltd - India
- Cigading International Bulk Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining Corp, Philippines
- Indian Oil Corporation Limited
- Chettinad Cement Corporation Ltd - India
- Banpu Public Company Limited - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Agrawal Coal Company - India
- Ministry of Finance - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Anglo American - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- Heidelberg Cement - Germany
- IEA Clean Coal Centre - UK
- Bulk Trading Sa - Switzerland
- Mercator Lines Limited - India
- Holcim Trading Pte Ltd - Singapore
- Baramulti Group, Indonesia
- White Energy Company Limited
- Singapore Mercantile Exchange
- Indonesian Coal Mining Association
- India Bulls Power Limited - India
- Carbofer General Trading SA - India
- Eastern Coal Council - USA
- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- Ind-Barath Power Infra Limited - India
- Wood Mackenzie - Singapore
- Eastern Energy - Thailand
- Orica Mining Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Rio Tinto Coal - Australia
- Larsen & Toubro Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- PTC India Limited - India
- Miang Besar Coal Terminal - Indonesia
- Aditya Birla Group - India
- Kalimantan Lumbung Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- New Zealand Coal & Carbon
- Krishnapatnam Port Company Ltd. - India
- Bukit Baiduri Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Salva Resources Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Bukit Makmur.PT - Indonesia
- Parliament of New Zealand
- Georgia Ports Authority, United States
- London Commodity Brokers - England
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement - Thailand
- Energy Link Ltd, New Zealand
- Alfred C Toepfer International GmbH - Germany
- Central Electricity Authority - India
- Directorate General of MIneral and Coal - Indonesia
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
- Attock Cement Pakistan Limited
- VISA Power Limited - India
- Sojitz Corporation - Japan
- Asmin Koalindo Tuhup - Indonesia
- Kumho Petrochemical, South Korea
- Sree Jayajothi Cements Limited - India
- Electricity Authority, New Zealand
- Minerals Council of Australia
- Kideco Jaya Agung - Indonesia
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- Sakthi Sugars Limited - India
- ICICI Bank Limited - India
- Independent Power Producers Association of India
- PNOC Exploration Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Thai Mozambique Logistica
- Vedanta Resources Plc - India
- Kohat Cement Company Ltd. - Pakistan
- LBH Netherlands Bv - Netherlands
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Madhucon Powers Ltd - India
- Altura Mining Limited, Indonesia
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- Merrill Lynch Commodities Europe
- Bayan Resources Tbk. - Indonesia
- Orica Australia Pty. Ltd.
- Kepco SPC Power Corporation, Philippines
- Bhatia International Limited - India
- Intertek Mineral Services - Indonesia
- Indogreen Group - Indonesia
- Energy Development Corp, Philippines
- Port Waratah Coal Services - Australia
- Price Waterhouse Coopers - Russia
- Jaiprakash Power Ventures ltd
- Sinarmas Energy and Mining - Indonesia
- Uttam Galva Steels Limited - India
- Barasentosa Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Riau Bara Harum - Indonesia
- CNBM International Corporation - China
- Mintek Dendrill Indonesia
- OPG Power Generation Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Interocean Group of Companies - India
- Kobexindo Tractors - Indoneisa
- Lanco Infratech Ltd - India
- The State Trading Corporation of India Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Edison Trading Spa - Italy
- Global Green Power PLC Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Cement Manufacturers Association - India
- The University of Queensland
- Ambuja Cements Ltd - India
- Makarim & Taira - Indonesia
- IHS Mccloskey Coal Group - USA
- Siam City Cement PLC, Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petron Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Rashtriya Ispat Nigam Limited - India
- ASAPP Information Group - India
- Jindal Steel & Power Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Electricity Generating Authority of Thailand
- Indika Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Leighton Contractors Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Semirara Mining and Power Corporation, Philippines
- Videocon Industries ltd - India
- Kapuas Tunggal Persada - Indonesia
- Marubeni Corporation - India
- International Coal Ventures Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Deloitte Consulting - India
- GMR Energy Limited - India
- Formosa Plastics Group - Taiwan
- Africa Commodities Group - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- Sical Logistics Limited - India
- Parry Sugars Refinery, India
- Vizag Seaport Private Limited - India
- Sarangani Energy Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Australian Coal Association
- Australian Commodity Traders Exchange
- The Treasury - Australian Government
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- Oldendorff Carriers - Singapore
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- Coal and Oil Company - UAE
- Mjunction Services Limited - India
- Manunggal Multi Energi - Indonesia
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