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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, 06 November 12
NOVEMBER 2012 HBA $35.21 LOWER THAN A YEAR AGO
COALspot.com - The Indonesian government’s declared coal reference price for November’ 12 has lost US$ 4.60 per MT M-o-M.
...
Sunday, 04 November 12
SUB-BIT INDONESIA COAL SWAPS FOR DECEMBER' 12 DELIVERY FALLS TO $ 59.78
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for December 2012 delivery fell -1.02 percent on WoW but gained 0.08 percent on D-D on Friday, 2 ...
Saturday, 03 November 12
THE SUPRAMAX FREIGHT EXPECTED TO BE SOFT NEXT WEEK - VISTAAR
COALspot.com - This week the market remained soft with all the sectors soft.
The BDI and was down by 6 pct closing at 986 points. The cape index ...
Saturday, 03 November 12
DEMOLITION IS THE KEY FOR DRY BULK SHIPPING'S RECOVERY SAYS SHIPBROKER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
With the number of new building deliveries so far in 2012 already having surpassed the total of 2011, it's more than clear that the dry bulk sector ...
Thursday, 01 November 12
INDONESIA HAS REVISED DOWN ITS 2012 DOMESTIC MARKET OBLIGATION REQUIREMENT FOR COAL
COALspot.com - Minister of Energy and Mineral Resources of Indonesia has revised down its 2012 domestic market obligation requirement due to lower d ...
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- Sindya Power Generating Company Private Ltd
- Globalindo Alam Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Indonesian Coal Mining Association
- Gujarat Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Romanian Commodities Exchange
- GVK Power & Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- Agrawal Coal Company - India
- Orica Australia Pty. Ltd.
- OPG Power Generation Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- Directorate Of Revenue Intelligence - India
- Bayan Resources Tbk. - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Georgia Ports Authority, United States
- CNBM International Corporation - China
- Maharashtra Electricity Regulatory Commission - India
- Intertek Mineral Services - Indonesia
- Parry Sugars Refinery, India
- GN Power Mariveles Coal Plant, Philippines
- Antam Resourcindo - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- Coal and Oil Company - UAE
- Timah Investasi Mineral - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- Minerals Council of Australia
- Madhucon Powers Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- Renaissance Capital - South Africa
- Makarim & Taira - Indonesia
- South Luzon Thermal Energy Corporation
- PTC India Limited - India
- Attock Cement Pakistan Limited
- Asmin Koalindo Tuhup - Indonesia
- Global Green Power PLC Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Kapuas Tunggal Persada - Indonesia
- The University of Queensland
- MS Steel International - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GAC Shipping (India) Pvt Ltd
- Global Coal Blending Company Limited - Australia
- Uttam Galva Steels Limited - India
- GMR Energy Limited - India
- Indo Tambangraya Megah - Indonesia
- Gujarat Sidhee Cement - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vedanta Resources Plc - India
- Sree Jayajothi Cements Limited - India
- Krishnapatnam Port Company Ltd. - India
- Merrill Lynch Commodities Europe
- Salva Resources Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Altura Mining Limited, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mintek Dendrill Indonesia
- Iligan Light & Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Australian Coal Association
- Meralco Power Generation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- Central Electricity Authority - India
- Orica Mining Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Bhushan Steel Limited - India
- Binh Thuan Hamico - Vietnam
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- Kobexindo Tractors - Indoneisa
- Chamber of Mines of South Africa
- Australian Commodity Traders Exchange
- Sinarmas Energy and Mining - Indonesia
- SMG Consultants - Indonesia
- Oldendorff Carriers - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Standard Chartered Bank - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Aditya Birla Group - India
- Cigading International Bulk Terminal - Indonesia
- Goldman Sachs - Singapore
- Aboitiz Power Corporation - Philippines
- Mjunction Services Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rashtriya Ispat Nigam Limited - India
- Wilmar Investment Holdings
- Sakthi Sugars Limited - India
- Kaltim Prima Coal - Indonesia
- SMC Global Power, Philippines
- SN Aboitiz Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Marubeni Corporation - India
- Energy Link Ltd, New Zealand
- Deloitte Consulting - India
- Global Business Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Port Waratah Coal Services - Australia
- Bukit Makmur.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Interocean Group of Companies - India
- Price Waterhouse Coopers - Russia
- The State Trading Corporation of India Ltd
- Chettinad Cement Corporation Ltd - India
- Power Finance Corporation Ltd., India
- Carbofer General Trading SA - India
- Malabar Cements Ltd - India
- Singapore Mercantile Exchange
- Therma Luzon, Inc, Philippines
- Indian Oil Corporation Limited
- Miang Besar Coal Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Latin American Coal - Colombia
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Parliament of New Zealand
- Energy Development Corp, Philippines
- VISA Power Limited - India
- Coalindo Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- London Commodity Brokers - England
- Straits Asia Resources Limited - Singapore
- Billiton Holdings Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- Electricity Generating Authority of Thailand
- European Bulk Services B.V. - Netherlands
- Bangladesh Power Developement Board
- ASAPP Information Group - India
- San Jose City I Power Corp, Philippines
- Mercuria Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Mercator Lines Limited - India
- Tamil Nadu electricity Board
- Siam City Cement - Thailand
- Savvy Resources Ltd - HongKong
- Dalmia Cement Bharat India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Mines - Canada
- Videocon Industries ltd - India
- Xindia Steels Limited - India
- Baramulti Group, Indonesia
- Economic Council, Georgia
- Pendopo Energi Batubara - Indonesia
- Tata Chemicals Ltd - India
- Borneo Indobara - Indonesia
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- India Bulls Power Limited - India
- Ind-Barath Power Infra Limited - India
- Indogreen Group - Indonesia
- Posco Energy - South Korea
- Lanco Infratech Ltd - India
- International Coal Ventures Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Star Paper Mills Limited - India
- Maheswari Brothers Coal Limited - India
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Petron Corporation, Philippines
- Electricity Authority, New Zealand
- Eastern Energy - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Independent Power Producers Association of India
- Bulk Trading Sa - Switzerland
- TNB Fuel Sdn Bhd - Malaysia
- Manunggal Multi Energi - Indonesia
- Larsen & Toubro Limited - India
- Bhatia International Limited - India
- Trasteel International SA, Italy
- Rio Tinto Coal - Australia
- The Treasury - Australian Government
- Thai Mozambique Logistica
- Anglo American - United Kingdom
- Africa Commodities Group - South Africa
- Riau Bara Harum - Indonesia
- Heidelberg Cement - Germany
- Planning Commission, India
- Eastern Coal Council - USA
- Toyota Tsusho Corporation, Japan
- Medco Energi Mining Internasional
- New Zealand Coal & Carbon
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Transport, Egypt
- LBH Netherlands Bv - Netherlands
- Siam City Cement PLC, Thailand
- Kepco SPC Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Metalloyd Limited - United Kingdom
- Bharathi Cement Corporation - India
- Kumho Petrochemical, South Korea
- TeaM Sual Corporation - Philippines
- Grasim Industreis Ltd - India
- Thiess Contractors Indonesia
- McConnell Dowell - Australia
- Kohat Cement Company Ltd. - Pakistan
- Bukit Asam (Persero) Tbk - Indonesia
- Commonwealth Bank - Australia
- ICICI Bank Limited - India
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Vizag Seaport Private Limited - India
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