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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, 14 August 12
SAKARI SIGNS HEADS OF AGREEMENT TO ACQUIRE SIX COAL CONCESSIONS IN INDONESIA
COALspot.com - Sakari has signed a Heads of Agreement (HOA) to acquire a 100% interest in up to six IUPs, covering an area of over 29,000 hectares, ...
Tuesday, 14 August 12
UNCERTAIN FUTURE FOR DRY BULK PANAMAX SHIPS - DREWRY / HELLENIC SHIPPING
The dry bulk shipping market is in a poor state, with the Capesize segment the worst of all. Unfortunately, the latest analysis from Drewry Maritime ...
Monday, 13 August 12
5TH VIETNAM PORTS AND LOGISTICS 2012
Press Release - Co-hosted by VINAMARINE, the 5th Vietnam Ports and Logistics2012 will feature dedicated sessions on port and transport infrastructur ...
Monday, 13 August 12
ACTIVE DRY BULK FLEET INCREASES BY 8% SO FAR IN 2012 IN TERMS OF TONNAGE CAPACITY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
It’s no wonder that the dry bulk market has been tethering since the start of the year. the overflow of tonnage has been so enormous, that eve ...
Sunday, 12 August 12
COAL FREIGHT RATES FALL FLAT TO SOFT ON OVERSUPPLY, WEAK DEMAND - VISTAAR SINGAPROE
COALspot.com - The BDI continued its fall 10th August.
This week all segments were down including BDI down by 9.15 pct closing at 774 points .The ...
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- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- Medco Energi Mining Internasional
- Minerals Council of Australia
- Therma Luzon, Inc, Philippines
- Renaissance Capital - South Africa
- Petron Corporation, Philippines
- Tamil Nadu electricity Board
- Sinarmas Energy and Mining - Indonesia
- Barasentosa Lestari - Indonesia
- Romanian Commodities Exchange
- GN Power Mariveles Coal Plant, Philippines
- Metalloyd Limited - United Kingdom
- Kideco Jaya Agung - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Riau Bara Harum - Indonesia
- Anglo American - United Kingdom
- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- Price Waterhouse Coopers - Russia
- Borneo Indobara - Indonesia
- Georgia Ports Authority, United States
- TeaM Sual Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Maheswari Brothers Coal Limited - India
- Leighton Contractors Pty Ltd - Australia
- Independent Power Producers Association of India
- Kobexindo Tractors - Indoneisa
- Vedanta Resources Plc - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Heidelberg Cement - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- South Luzon Thermal Energy Corporation
- Coal and Oil Company - UAE
- PNOC Exploration Corporation - Philippines
- Power Finance Corporation Ltd., India
- SMG Consultants - Indonesia
- Sical Logistics Limited - India
- Deloitte Consulting - India
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Maharashtra Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Indonesian Coal Mining Association
- CNBM International Corporation - China
- Energy Link Ltd, New Zealand
- Directorate Of Revenue Intelligence - India
- Sakthi Sugars Limited - India
- Salva Resources Pvt Ltd - India
- Chamber of Mines of South Africa
- Merrill Lynch Commodities Europe
- Indika Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Energy Development Corp, Philippines
- MS Steel International - UAE
- Interocean Group of Companies - India
- Kaltim Prima Coal - Indonesia
- Meralco Power Generation, Philippines
- Pendopo Energi Batubara - Indonesia
- San Jose City I Power Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Ministry of Mines - Canada
- Rio Tinto Coal - Australia
- Commonwealth Bank - Australia
- The University of Queensland
- IEA Clean Coal Centre - UK
- Miang Besar Coal Terminal - Indonesia
- India Bulls Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Madhucon Powers Ltd - India
- Bulk Trading Sa - Switzerland
- Indian Oil Corporation Limited
- Jaiprakash Power Ventures ltd
- Siam City Cement - Thailand
- Bangladesh Power Developement Board
- Australian Commodity Traders Exchange
- Sarangani Energy Corporation, Philippines
- Bhatia International Limited - India
- Makarim & Taira - Indonesia
- Toyota Tsusho Corporation, Japan
- Indogreen Group - Indonesia
- OPG Power Generation Pvt Ltd - India
- VISA Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Baramulti Group, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Agrawal Coal Company - India
- Chettinad Cement Corporation Ltd - India
- Sree Jayajothi Cements Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Vizag Seaport Private Limited - India
- Manunggal Multi Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Antam Resourcindo - Indonesia
- New Zealand Coal & Carbon
- ICICI Bank Limited - India
- ASAPP Information Group - India
- Karaikal Port Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Thiess Contractors Indonesia
- Coalindo Energy - Indonesia
- GVK Power & Infra Limited - India
- Tata Chemicals Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Altura Mining Limited, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Global Coal Blending Company Limited - Australia
- Formosa Plastics Group - Taiwan
- Videocon Industries ltd - India
- Gujarat Sidhee Cement - India
- Mercuria Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Parliament of New Zealand
- Indian Energy Exchange, India
- Orica Mining Services - Indonesia
- Ministry of Finance - Indonesia
- Larsen & Toubro Limited - India
- Kartika Selabumi Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- Lanco Infratech Ltd - India
- Eastern Energy - Thailand
- Essar Steel Hazira Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Parry Sugars Refinery, India
- Sojitz Corporation - Japan
- Star Paper Mills Limited - India
- Bayan Resources Tbk. - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cement Manufacturers Association - India
- Singapore Mercantile Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Economic Council, Georgia
- Kapuas Tunggal Persada - Indonesia
- Electricity Generating Authority of Thailand
- Marubeni Corporation - India
- Uttam Galva Steels Limited - India
- Standard Chartered Bank - UAE
- Malabar Cements Ltd - India
- Grasim Industreis Ltd - India
- Sindya Power Generating Company Private Ltd
- Central Electricity Authority - India
- Edison Trading Spa - Italy
- IHS Mccloskey Coal Group - USA
- Simpson Spence & Young - Indonesia
- Ministry of Transport, Egypt
- Dalmia Cement Bharat India
- SMC Global Power, Philippines
- Timah Investasi Mineral - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Xindia Steels Limited - India
- Thai Mozambique Logistica
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Carbofer General Trading SA - India
- Rashtriya Ispat Nigam Limited - India
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- Iligan Light & Power Inc, Philippines
- Ambuja Cements Ltd - India
- Central Java Power - Indonesia
- PTC India Limited - India
- Eastern Coal Council - USA
- Planning Commission, India
- International Coal Ventures Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Attock Cement Pakistan Limited
- Globalindo Alam Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- White Energy Company Limited
- Petrochimia International Co. Ltd.- Taiwan
- Africa Commodities Group - South Africa
- Aboitiz Power Corporation - Philippines
- Wilmar Investment Holdings
- The Treasury - Australian Government
- Latin American Coal - Colombia
- Semirara Mining and Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Kohat Cement Company Ltd. - Pakistan
- Kumho Petrochemical, South Korea
- Savvy Resources Ltd - HongKong
- Trasteel International SA, Italy
- Goldman Sachs - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Australian Coal Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Port Waratah Coal Services - Australia
- Mercator Lines Limited - India
- Mjunction Services Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Mineral Development Corp Ltd - India
- Orica Australia Pty. Ltd.
- Wood Mackenzie - Singapore
- Krishnapatnam Port Company Ltd. - India
- McConnell Dowell - Australia
- CIMB Investment Bank - Malaysia
- Electricity Authority, New Zealand
- Posco Energy - South Korea
- The State Trading Corporation of India Ltd
- Semirara Mining Corp, Philippines
- Intertek Mineral Services - Indonesia
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