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