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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, 30 October 12
NEW BUILDING ORDERING ACTIVITY KEEPS ON RETREATING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Ship owners have refrained from placing any new orders of vessels during the course of the past few days, according to shipbroker reports. According ...
Monday, 29 October 12
US COAL EXPORTS ARE EXPECTED TO REACH 125 MILLION TONS THIS YEAR - EIA
COALspot.com - US coal exports are expected to reach 125 million tons this year, surpassing the old record of about 113 million tons set in 1981, sa ...
Sunday, 28 October 12
SUB-BIT INDONESIA COAL SWAPS (FOB ) FOR DECEMBER 2012 DELIVERY STAYED FLAT D-D
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for December 2012 delivery flat on D-D but gained 0.38 percent on W-W on Friday, 26 October 2012, ...
Sunday, 28 October 12
INDONESIA TO INDIA SUPRAMAX FREIGHT MARKET FAIRLY STEADY - VISTAAR
COALspot.com - The Cape size sector continued to remain active with iron ore movement being steady. All other sectors were down.
The BDI was up b ...
Friday, 26 October 12
SHIPPING MARKETS HEADING FOR DIVISION AND MULTI-TIER WILL BECOME THE NORM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
It seems that something is expected to be fundamentally different in the way that the shipping markets will be operating in the future, according to ...
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- Carbofer General Trading SA - India
- Petrochimia International Co. Ltd.- Taiwan
- Coastal Gujarat Power Limited - India
- Rio Tinto Coal - Australia
- PTC India Limited - India
- Tata Chemicals Ltd - India
- Malabar Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Makmur.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
- Meenaskhi Energy Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Metalloyd Limited - United Kingdom
- Star Paper Mills Limited - India
- Kobexindo Tractors - Indoneisa
- Xindia Steels Limited - India
- Coal and Oil Company - UAE
- IHS Mccloskey Coal Group - USA
- Binh Thuan Hamico - Vietnam
- Thai Mozambique Logistica
- Agrawal Coal Company - India
- IEA Clean Coal Centre - UK
- Formosa Plastics Group - Taiwan
- Marubeni Corporation - India
- Uttam Galva Steels Limited - India
- Altura Mining Limited, Indonesia
- New Zealand Coal & Carbon
- Cigading International Bulk Terminal - Indonesia
- Australian Coal Association
- Vizag Seaport Private Limited - India
- Bhushan Steel Limited - India
- London Commodity Brokers - England
- Iligan Light & Power Inc, Philippines
- White Energy Company Limited
- Chamber of Mines of South Africa
- Indian Energy Exchange, India
- Eastern Energy - Thailand
- VISA Power Limited - India
- Bulk Trading Sa - Switzerland
- Savvy Resources Ltd - HongKong
- Bhatia International Limited - India
- TeaM Sual Corporation - Philippines
- Petron Corporation, Philippines
- ICICI Bank Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jindal Steel & Power Ltd - India
- Parliament of New Zealand
- Manunggal Multi Energi - Indonesia
- Renaissance Capital - South Africa
- Intertek Mineral Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Singapore Mercantile Exchange
- GMR Energy Limited - India
- Port Waratah Coal Services - Australia
- GVK Power & Infra Limited - India
- Videocon Industries ltd - India
- Salva Resources Pvt Ltd - India
- Latin American Coal - Colombia
- Wilmar Investment Holdings
- Economic Council, Georgia
- Sindya Power Generating Company Private Ltd
- Posco Energy - South Korea
- Bangladesh Power Developement Board
- Samtan Co., Ltd - South Korea
- Indonesian Coal Mining Association
- Kumho Petrochemical, South Korea
- Goldman Sachs - Singapore
- India Bulls Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Straits Asia Resources Limited - Singapore
- LBH Netherlands Bv - Netherlands
- Bharathi Cement Corporation - India
- Minerals Council of Australia
- Ministry of Finance - Indonesia
- Globalindo Alam Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Karaikal Port Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Anglo American - United Kingdom
- Sree Jayajothi Cements Limited - India
- Rashtriya Ispat Nigam Limited - India
- Mercator Lines Limited - India
- Kapuas Tunggal Persada - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Toyota Tsusho Corporation, Japan
- Gujarat Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- The Treasury - Australian Government
- Thiess Contractors Indonesia
- SMC Global Power, Philippines
- Africa Commodities Group - South Africa
- Semirara Mining and Power Corporation, Philippines
- Ministry of Transport, Egypt
- Dalmia Cement Bharat India
- Directorate Of Revenue Intelligence - India
- Siam City Cement - Thailand
- Makarim & Taira - Indonesia
- International Coal Ventures Pvt Ltd - India
- Orica Mining Services - Indonesia
- Energy Link Ltd, New Zealand
- Energy Development Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- GAC Shipping (India) Pvt Ltd
- Interocean Group of Companies - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- Kaltim Prima Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Banpu Public Company Limited - Thailand
- Semirara Mining Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CIMB Investment Bank - Malaysia
- Global Business Power Corporation, Philippines
- CNBM International Corporation - China
- Leighton Contractors Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Bukit Baiduri Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Mintek Dendrill Indonesia
- Standard Chartered Bank - UAE
- Chettinad Cement Corporation Ltd - India
- Medco Energi Mining Internasional
- SMG Consultants - Indonesia
- Eastern Coal Council - USA
- Wood Mackenzie - Singapore
- Cement Manufacturers Association - India
- Therma Luzon, Inc, Philippines
- Indian Oil Corporation Limited
- ASAPP Information Group - India
- Ministry of Mines - Canada
- Ind-Barath Power Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Vedanta Resources Plc - India
- Gujarat Mineral Development Corp Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indika Energy - Indonesia
- Gujarat Sidhee Cement - India
- Sojitz Corporation - Japan
- Orica Australia Pty. Ltd.
- Krishnapatnam Port Company Ltd. - India
- Deloitte Consulting - India
- Tamil Nadu electricity Board
- Aboitiz Power Corporation - Philippines
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Merrill Lynch Commodities Europe
- Pipit Mutiara Jaya. PT, Indonesia
- Baramulti Group, Indonesia
- Borneo Indobara - Indonesia
- PowerSource Philippines DevCo
- Sakthi Sugars Limited - India
- South Luzon Thermal Energy Corporation
- Electricity Authority, New Zealand
- Parry Sugars Refinery, India
- Essar Steel Hazira Ltd - India
- The State Trading Corporation of India Ltd
- Maheswari Brothers Coal Limited - India
- Trasteel International SA, Italy
- Holcim Trading Pte Ltd - Singapore
- Oldendorff Carriers - Singapore
- Miang Besar Coal Terminal - Indonesia
- Romanian Commodities Exchange
- Kideco Jaya Agung - Indonesia
- Mjunction Services Limited - India
- Planning Commission, India
- Simpson Spence & Young - Indonesia
- Jaiprakash Power Ventures ltd
- Vijayanagar Sugar Pvt Ltd - India
- Independent Power Producers Association of India
- Australian Commodity Traders Exchange
- Sical Logistics Limited - India
- Timah Investasi Mineral - Indoneisa
- Edison Trading Spa - Italy
- Attock Cement Pakistan Limited
- Indogreen Group - Indonesia
- Lanco Infratech Ltd - India
- Global Green Power PLC Corporation, Philippines
- Electricity Generating Authority of Thailand
- Neyveli Lignite Corporation Ltd, - India
- Bayan Resources Tbk. - Indonesia
- MS Steel International - UAE
- Barasentosa Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Coalindo Energy - Indonesia
- Commonwealth Bank - Australia
- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- McConnell Dowell - Australia
- Bhoruka Overseas - Indonesia
- Sarangani Energy Corporation, Philippines
- Riau Bara Harum - Indonesia
- Ambuja Cements Ltd - India
- The University of Queensland
- Heidelberg Cement - Germany
- Central Electricity Authority - India
- Billiton Holdings Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Meralco Power Generation, Philippines
- Antam Resourcindo - Indonesia
- Mercuria Energy - Indonesia
- Georgia Ports Authority, United States
- SN Aboitiz Power Inc, Philippines
- Larsen & Toubro Limited - India
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