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