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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, 12 October 12
INVESTMENT OPPORTUNITIES OCCUR IN THE SECOND HAND VESSEL MARKETS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Although 2012 has by now evolved into one of the most challenging years for global shipping industry, ship owners are scouting the second hand ship ...
Thursday, 11 October 12
SINGAPORE BASED COAL SOURCE AND SHIPPING BAGS 300K MT IMPORTED COAL SUPPLY CONTRACT FROM TNPL
COALspot.com - India-based paper manufacturer Tamil Nadu Newsprint and Papers Limited has awarded a tender for 300,000 mt of imported steam co ...
Thursday, 11 October 12
PANAMAX : SINCE LAST WEEK RATES HAS FIRMED FOR ALL TRADES - FEARNLEYS AS
Handy
The Atlantic market remains quiet due to lack of cargoes and more supply of ships. Rates from Continent to East Med were around USD 14k and B ...
Thursday, 11 October 12
DRY BULK MARKET STEADY AFTER CHINESE HOLIDAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market hasn't yet staged a solid rebound after last week's holidays in China, as many would have expected. Indeed, many analysts were ...
Wednesday, 10 October 12
NEW BUILDING MARKET ON A QUIET WEEK, DUE TO ASIAN HOLIDAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The newbuilding ordering activity has been more than quite during the course of the past week, as a result of holidays in both Korea and China. Acco ...
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- Baramulti Group, Indonesia
- South Luzon Thermal Energy Corporation
- Edison Trading Spa - Italy
- Mercuria Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Marubeni Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Timah Investasi Mineral - Indoneisa
- Ministry of Transport, Egypt
- Bangladesh Power Developement Board
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- TNB Fuel Sdn Bhd - Malaysia
- Anglo American - United Kingdom
- Coastal Gujarat Power Limited - India
- Iligan Light & Power Inc, Philippines
- Vedanta Resources Plc - India
- Bulk Trading Sa - Switzerland
- Karbindo Abesyapradhi - Indoneisa
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GVK Power & Infra Limited - India
- Sojitz Corporation - Japan
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Barasentosa Lestari - Indonesia
- Heidelberg Cement - Germany
- Global Coal Blending Company Limited - Australia
- Energy Development Corp, Philippines
- Orica Australia Pty. Ltd.
- Thai Mozambique Logistica
- Merrill Lynch Commodities Europe
- Kideco Jaya Agung - Indonesia
- Eastern Coal Council - USA
- Posco Energy - South Korea
- Leighton Contractors Pty Ltd - Australia
- Rio Tinto Coal - Australia
- PTC India Limited - India
- Latin American Coal - Colombia
- Krishnapatnam Port Company Ltd. - India
- Renaissance Capital - South Africa
- Price Waterhouse Coopers - Russia
- Bhatia International Limited - India
- Mintek Dendrill Indonesia
- GAC Shipping (India) Pvt Ltd
- AsiaOL BioFuels Corp., Philippines
- Maharashtra Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Central Electricity Authority - India
- Dalmia Cement Bharat India
- Bhushan Steel Limited - India
- White Energy Company Limited
- GMR Energy Limited - India
- Ambuja Cements Ltd - India
- Port Waratah Coal Services - Australia
- Indonesian Coal Mining Association
- Star Paper Mills Limited - India
- Madhucon Powers Ltd - India
- Romanian Commodities Exchange
- Indogreen Group - Indonesia
- Simpson Spence & Young - Indonesia
- IHS Mccloskey Coal Group - USA
- Straits Asia Resources Limited - Singapore
- Xindia Steels Limited - India
- Kobexindo Tractors - Indoneisa
- Parry Sugars Refinery, India
- Bukit Asam (Persero) Tbk - Indonesia
- Uttam Galva Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- MS Steel International - UAE
- Banpu Public Company Limited - Thailand
- Videocon Industries ltd - India
- London Commodity Brokers - England
- Central Java Power - Indonesia
- Tamil Nadu electricity Board
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement PLC, Thailand
- Electricity Generating Authority of Thailand
- Mjunction Services Limited - India
- PNOC Exploration Corporation - Philippines
- Aditya Birla Group - India
- Meenaskhi Energy Private Limited - India
- Agrawal Coal Company - India
- Savvy Resources Ltd - HongKong
- International Coal Ventures Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Minerals Council of Australia
- Wilmar Investment Holdings
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kaltim Prima Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Altura Mining Limited, Indonesia
- Metalloyd Limited - United Kingdom
- Salva Resources Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- The University of Queensland
- Larsen & Toubro Limited - India
- Formosa Plastics Group - Taiwan
- Ind-Barath Power Infra Limited - India
- Singapore Mercantile Exchange
- Bharathi Cement Corporation - India
- Samtan Co., Ltd - South Korea
- Eastern Energy - Thailand
- The State Trading Corporation of India Ltd
- Sinarmas Energy and Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Petron Corporation, Philippines
- Semirara Mining Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Billiton Holdings Pty Ltd - Australia
- New Zealand Coal & Carbon
- Carbofer General Trading SA - India
- Ceylon Electricity Board - Sri Lanka
- Bahari Cakrawala Sebuku - Indonesia
- India Bulls Power Limited - India
- VISA Power Limited - India
- Malabar Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Toyota Tsusho Corporation, Japan
- Commonwealth Bank - Australia
- Bhoruka Overseas - Indonesia
- Economic Council, Georgia
- Sarangani Energy Corporation, Philippines
- Orica Mining Services - Indonesia
- Deloitte Consulting - India
- SMG Consultants - Indonesia
- Electricity Authority, New Zealand
- Sindya Power Generating Company Private Ltd
- Bukit Baiduri Energy - Indonesia
- Planning Commission, India
- Global Green Power PLC Corporation, Philippines
- Siam City Cement - Thailand
- Sical Logistics Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indo Tambangraya Megah - Indonesia
- Parliament of New Zealand
- Chettinad Cement Corporation Ltd - India
- Sakthi Sugars Limited - India
- Ministry of Finance - Indonesia
- Intertek Mineral Services - Indonesia
- Goldman Sachs - Singapore
- McConnell Dowell - Australia
- Vizag Seaport Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Oldendorff Carriers - Singapore
- Energy Link Ltd, New Zealand
- Binh Thuan Hamico - Vietnam
- Thiess Contractors Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Standard Chartered Bank - UAE
- Directorate Of Revenue Intelligence - India
- Kalimantan Lumbung Energi - Indonesia
- Meralco Power Generation, Philippines
- Jindal Steel & Power Ltd - India
- Essar Steel Hazira Ltd - India
- CIMB Investment Bank - Malaysia
- Indian Energy Exchange, India
- Kumho Petrochemical, South Korea
- Miang Besar Coal Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Antam Resourcindo - Indonesia
- Makarim & Taira - Indonesia
- Grasim Industreis Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Commodity Traders Exchange
- Interocean Group of Companies - India
- Attock Cement Pakistan Limited
- Ministry of Mines - Canada
- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Australian Coal Association
- Tata Chemicals Ltd - India
- Gujarat Sidhee Cement - India
- Aboitiz Power Corporation - Philippines
- Coal and Oil Company - UAE
- Cement Manufacturers Association - India
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Independent Power Producers Association of India
- Rashtriya Ispat Nigam Limited - India
- Georgia Ports Authority, United States
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- The Treasury - Australian Government
- Semirara Mining and Power Corporation, Philippines
- Indika Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Africa Commodities Group - South Africa
- Borneo Indobara - Indonesia
- Kepco SPC Power Corporation, Philippines
- ICICI Bank Limited - India
- Wood Mackenzie - Singapore
- PowerSource Philippines DevCo
- TeaM Sual Corporation - Philippines
- IEA Clean Coal Centre - UK
- ASAPP Information Group - India
- Riau Bara Harum - Indonesia
- Lanco Infratech Ltd - India
- Medco Energi Mining Internasional
- Mercator Lines Limited - India
- Indian Oil Corporation Limited
- Chamber of Mines of South Africa
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