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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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- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- Madhucon Powers Ltd - India
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Central Electricity Authority - India
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Altura Mining Limited, Indonesia
- Alfred C Toepfer International GmbH - Germany
- PNOC Exploration Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Kaltim Prima Coal - Indonesia
- Ambuja Cements Ltd - India
- Bukit Baiduri Energy - Indonesia
- Medco Energi Mining Internasional
- Xindia Steels Limited - India
- Chamber of Mines of South Africa
- PowerSource Philippines DevCo
- CIMB Investment Bank - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- Energy Link Ltd, New Zealand
- Wilmar Investment Holdings
- Cement Manufacturers Association - India
- Minerals Council of Australia
- Global Coal Blending Company Limited - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Mining Services - Indonesia
- Vizag Seaport Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- International Coal Ventures Pvt Ltd - India
- Commonwealth Bank - Australia
- Gujarat Electricity Regulatory Commission - India
- Economic Council, Georgia
- ASAPP Information Group - India
- Bhatia International Limited - India
- Posco Energy - South Korea
- Coal and Oil Company - UAE
- Indika Energy - Indonesia
- IEA Clean Coal Centre - UK
- Sakthi Sugars Limited - India
- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
- Kumho Petrochemical, South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Sical Logistics Limited - India
- Eastern Coal Council - USA
- Baramulti Group, Indonesia
- Agrawal Coal Company - India
- Metalloyd Limited - United Kingdom
- Petron Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Simpson Spence & Young - Indonesia
- Deloitte Consulting - India
- Singapore Mercantile Exchange
- Essar Steel Hazira Ltd - India
- Orica Australia Pty. Ltd.
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- Bhushan Steel Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Sarangani Energy Corporation, Philippines
- Parliament of New Zealand
- Global Green Power PLC Corporation, Philippines
- Rio Tinto Coal - Australia
- Siam City Cement - Thailand
- GMR Energy Limited - India
- Manunggal Multi Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bayan Resources Tbk. - Indonesia
- Bhoruka Overseas - Indonesia
- Kideco Jaya Agung - Indonesia
- Meralco Power Generation, Philippines
- Georgia Ports Authority, United States
- South Luzon Thermal Energy Corporation
- Coalindo Energy - Indonesia
- Parry Sugars Refinery, India
- Bukit Asam (Persero) Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Globalindo Alam Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Kapuas Tunggal Persada - Indonesia
- Australian Coal Association
- Rashtriya Ispat Nigam Limited - India
- LBH Netherlands Bv - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Indonesian Coal Mining Association
- Central Java Power - Indonesia
- Aboitiz Power Corporation - Philippines
- Standard Chartered Bank - UAE
- Ceylon Electricity Board - Sri Lanka
- Barasentosa Lestari - Indonesia
- Thiess Contractors Indonesia
- OPG Power Generation Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Price Waterhouse Coopers - Russia
- Renaissance Capital - South Africa
- Sojitz Corporation - Japan
- Videocon Industries ltd - India
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Thai Mozambique Logistica
- MS Steel International - UAE
- Timah Investasi Mineral - Indoneisa
- Latin American Coal - Colombia
- McConnell Dowell - Australia
- Global Business Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Australian Commodity Traders Exchange
- Larsen & Toubro Limited - India
- Aditya Birla Group - India
- Anglo American - United Kingdom
- Bharathi Cement Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Merrill Lynch Commodities Europe
- New Zealand Coal & Carbon
- Indian Energy Exchange, India
- Uttam Galva Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- Carbofer General Trading SA - India
- Coastal Gujarat Power Limited - India
- Trasteel International SA, Italy
- Siam City Cement PLC, Thailand
- Toyota Tsusho Corporation, Japan
- Pendopo Energi Batubara - Indonesia
- Tata Chemicals Ltd - India
- Bangladesh Power Developement Board
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- Banpu Public Company Limited - Thailand
- Meenaskhi Energy Private Limited - India
- Directorate Of Revenue Intelligence - India
- Straits Asia Resources Limited - Singapore
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
- Makarim & Taira - Indonesia
- Edison Trading Spa - Italy
- PTC India Limited - India
- SMG Consultants - Indonesia
- Indian Oil Corporation Limited
- San Jose City I Power Corp, Philippines
- Mjunction Services Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Tamil Nadu electricity Board
- Energy Development Corp, Philippines
- VISA Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TeaM Sual Corporation - Philippines
- The Treasury - Australian Government
- Ministry of Transport, Egypt
- Bukit Makmur.PT - Indonesia
- Interocean Group of Companies - India
- Riau Bara Harum - Indonesia
- CNBM International Corporation - China
- Therma Luzon, Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Africa Commodities Group - South Africa
- Mercuria Energy - Indonesia
- Star Paper Mills Limited - India
- Jindal Steel & Power Ltd - India
- Goldman Sachs - Singapore
- Mercator Lines Limited - India
- Ministry of Mines - Canada
- IHS Mccloskey Coal Group - USA
- Ministry of Finance - Indonesia
- Attock Cement Pakistan Limited
- Binh Thuan Hamico - Vietnam
- Marubeni Corporation - India
- Wood Mackenzie - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Jorong Barutama Greston.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- AsiaOL BioFuels Corp., Philippines
- Mintek Dendrill Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Salva Resources Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- India Bulls Power Limited - India
- Electricity Authority, New Zealand
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- Maheswari Brothers Coal Limited - India
- Semirara Mining Corp, Philippines
- Jaiprakash Power Ventures ltd
- European Bulk Services B.V. - Netherlands
- Port Waratah Coal Services - Australia
- The State Trading Corporation of India Ltd
- Electricity Generating Authority of Thailand
- The University of Queensland
- Dalmia Cement Bharat India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- White Energy Company Limited
- Karaikal Port Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- ICICI Bank Limited - India
- Heidelberg Cement - Germany
- SMC Global Power, Philippines
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