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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, 22 May 12
NEW ONE-YEAR TIME CHARTERS FOR TWO VESSELS OF EXCEL MARITIME CARRIERS LTD.
Excel Maritime Carriers Ltd. (NYSE: EXM), an owner and operator of dry bulk carriers and an international provider of worldwide seaborne transportat ...
Tuesday, 22 May 12
DRY BULK MARKET STEADY, AWAITING FURTHER RISE IN DEMAND WHICH IS DOUBTFUL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Traditionally, the second and third quarters of the year are the strongest for the dry bulk market, but this year, things seem to be quite subdued, ...
Sunday, 20 May 12
SPOT FREIGHT RATE DIPS FURTHER - VISTAAR
COALspot.com - The BDI was marginally up by 3 points (0.26 pct) closing at 1,141 points.
The cape index was up by 1.17 pct closing at 1,633 point ...
Saturday, 19 May 12
INDONESIAN SUB-BITUMINOUS COAL SWAPS DROP US$ 2.88 PMT W-O-W
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for June deliveries have drops this week by 3.86 percent and& ...
Saturday, 19 May 12
INDONESIAN EXPORT TAX GIVES COAL MINERS A CHEAP RIDE: ANALYSTS - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesia’s policy to exclude coal from an export tax that has been applied to 14 other mineral commodities h ...
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- London Commodity Brokers - England
- Jindal Steel & Power Ltd - India
- Oldendorff Carriers - Singapore
- Bulk Trading Sa - Switzerland
- Gujarat Mineral Development Corp Ltd - India
- Metalloyd Limited - United Kingdom
- Heidelberg Cement - Germany
- Bhatia International Limited - India
- San Jose City I Power Corp, Philippines
- Australian Commodity Traders Exchange
- Salva Resources Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- Bukit Makmur.PT - Indonesia
- Orica Australia Pty. Ltd.
- Malabar Cements Ltd - India
- Mercuria Energy - Indonesia
- Georgia Ports Authority, United States
- Sree Jayajothi Cements Limited - India
- Formosa Plastics Group - Taiwan
- Mjunction Services Limited - India
- Interocean Group of Companies - India
- Energy Development Corp, Philippines
- SMG Consultants - Indonesia
- CNBM International Corporation - China
- Directorate Of Revenue Intelligence - India
- Coastal Gujarat Power Limited - India
- Trasteel International SA, Italy
- Marubeni Corporation - India
- IHS Mccloskey Coal Group - USA
- Toyota Tsusho Corporation, Japan
- Intertek Mineral Services - Indonesia
- Global Coal Blending Company Limited - Australia
- IEA Clean Coal Centre - UK
- Aditya Birla Group - India
- Jorong Barutama Greston.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Minerals Council of Australia
- Bharathi Cement Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement - Thailand
- White Energy Company Limited
- GVK Power & Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- McConnell Dowell - Australia
- Central Electricity Authority - India
- Attock Cement Pakistan Limited
- Romanian Commodities Exchange
- MS Steel International - UAE
- Kaltim Prima Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- South Luzon Thermal Energy Corporation
- Kideco Jaya Agung - Indonesia
- Savvy Resources Ltd - HongKong
- Power Finance Corporation Ltd., India
- Agrawal Coal Company - India
- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- Indian Energy Exchange, India
- Krishnapatnam Port Company Ltd. - India
- Wilmar Investment Holdings
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Indian Oil Corporation Limited
- Gujarat Sidhee Cement - India
- Price Waterhouse Coopers - Russia
- Sakthi Sugars Limited - India
- Vedanta Resources Plc - India
- Gujarat Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Australian Coal Association
- CIMB Investment Bank - Malaysia
- The University of Queensland
- Asmin Koalindo Tuhup - Indonesia
- LBH Netherlands Bv - Netherlands
- Parry Sugars Refinery, India
- Binh Thuan Hamico - Vietnam
- Banpu Public Company Limited - Thailand
- Therma Luzon, Inc, Philippines
- Edison Trading Spa - Italy
- Neyveli Lignite Corporation Ltd, - India
- Chettinad Cement Corporation Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indo Tambangraya Megah - Indonesia
- Barasentosa Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Kumho Petrochemical, South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
- Pendopo Energi Batubara - Indonesia
- Borneo Indobara - Indonesia
- Star Paper Mills Limited - India
- Samtan Co., Ltd - South Korea
- Altura Mining Limited, Indonesia
- Jaiprakash Power Ventures ltd
- Bahari Cakrawala Sebuku - Indonesia
- Karaikal Port Pvt Ltd - India
- Sical Logistics Limited - India
- Semirara Mining Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Videocon Industries ltd - India
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- Rio Tinto Coal - Australia
- Electricity Authority, New Zealand
- Makarim & Taira - Indonesia
- Coalindo Energy - Indonesia
- Energy Link Ltd, New Zealand
- Renaissance Capital - South Africa
- Baramulti Group, Indonesia
- Anglo American - United Kingdom
- ASAPP Information Group - India
- Kepco SPC Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- Africa Commodities Group - South Africa
- Goldman Sachs - Singapore
- Standard Chartered Bank - UAE
- Carbofer General Trading SA - India
- Iligan Light & Power Inc, Philippines
- Tamil Nadu electricity Board
- TeaM Sual Corporation - Philippines
- VISA Power Limited - India
- Mercator Lines Limited - India
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- Eastern Energy - Thailand
- Merrill Lynch Commodities Europe
- Independent Power Producers Association of India
- Bhoruka Overseas - Indonesia
- Electricity Generating Authority of Thailand
- Medco Energi Mining Internasional
- Thai Mozambique Logistica
- PTC India Limited - India
- Kapuas Tunggal Persada - Indonesia
- Ministry of Mines - Canada
- Economic Council, Georgia
- Ambuja Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Larsen & Toubro Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Deloitte Consulting - India
- Kobexindo Tractors - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- GAC Shipping (India) Pvt Ltd
- Kohat Cement Company Ltd. - Pakistan
- The State Trading Corporation of India Ltd
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Straits Asia Resources Limited - Singapore
- Ceylon Electricity Board - Sri Lanka
- Planning Commission, India
- PetroVietnam Power Coal Import and Supply Company
- Holcim Trading Pte Ltd - Singapore
- Timah Investasi Mineral - Indoneisa
- Mintek Dendrill Indonesia
- Xindia Steels Limited - India
- Ministry of Transport, Egypt
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- Thiess Contractors Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Miang Besar Coal Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Cement Manufacturers Association - India
- PowerSource Philippines DevCo
- Manunggal Multi Energi - Indonesia
- Tata Chemicals Ltd - India
- Siam City Cement PLC, Thailand
- Maheswari Brothers Coal Limited - India
- Directorate General of MIneral and Coal - Indonesia
- GMR Energy Limited - India
- ICICI Bank Limited - India
- Sinarmas Energy and Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- India Bulls Power Limited - India
- Coal and Oil Company - UAE
- Eastern Coal Council - USA
- Meralco Power Generation, Philippines
- Indogreen Group - Indonesia
- Indika Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Petron Corporation, Philippines
- Latin American Coal - Colombia
- Aboitiz Power Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Central Java Power - Indonesia
- Singapore Mercantile Exchange
- New Zealand Coal & Carbon
- Wood Mackenzie - Singapore
- Global Business Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Sarangani Energy Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bayan Resources Tbk. - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bhushan Steel Limited - India
- Ministry of Finance - Indonesia
- Lanco Infratech Ltd - India
- Sindya Power Generating Company Private Ltd
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