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