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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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Thursday, 26 April 12
PANAMAXES AGAIN EARN MORE THAN CAPESIZES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The latest surge of demand for Panamaxes has led the dry bulk market to new higher ground on Monday, with the Baltic Dry Index (BDI) reaching 1,090 ...
Wednesday, 25 April 12
CHINA IMPORTS 9.76 MMT AND INDIA IMPORTS 7.03 MMT OF INDONESIAN COAL LAST MONTH
COALspot.com: Indonesia, the world largest coal exporter, shipped 30.64* million tons of coal in March 2012, compared to 27.12* million tons i ...
Monday, 23 April 12
ALTURA ENTERS INTO AGREEMENT TO ACQUIRE 2 COAL PROJECTS IN SOUTH KALIMANTAN
COALspot.com - Altura Mining Limited (ASX: AJM) has announced that it has entered into an agreement to acquire a further two (2) Mining Permits (IUP ...
Sunday, 22 April 12
THE FREIGHT MARKET EXPECTED TO REMAIN FIRM NEXT WEEK - VISTAAR
COALspot.com - The BDI has broken the psychological barrier of 1000 points and closed at 1067 points.
The cape index was slightly down by 2.48 pc ...
Saturday, 21 April 12
INDONESIAN SUB-BITUMINOUS COAL SWAPS DROP 2.61 PERCENT THIS WEEK
COALspot.com - Indonesian sub-bituminous coal swaps fell for a fifth day, according to DSP of SGX AsiaClear OTC Coal Swaps.
CFR South China Coal ...
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- Intertek Mineral Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- Medco Energi Mining Internasional
- Kapuas Tunggal Persada - Indonesia
- Bukit Makmur.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Central Java Power - Indonesia
- The State Trading Corporation of India Ltd
- Planning Commission, India
- Larsen & Toubro Limited - India
- AsiaOL BioFuels Corp., Philippines
- Straits Asia Resources Limited - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Banpu Public Company Limited - Thailand
- Salva Resources Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- GMR Energy Limited - India
- Ministry of Finance - Indonesia
- Trasteel International SA, Italy
- Kohat Cement Company Ltd. - Pakistan
- CNBM International Corporation - China
- Attock Cement Pakistan Limited
- Sarangani Energy Corporation, Philippines
- SMC Global Power, Philippines
- Deloitte Consulting - India
- Binh Thuan Hamico - Vietnam
- Latin American Coal - Colombia
- Asmin Koalindo Tuhup - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Baramulti Group, Indonesia
- Xindia Steels Limited - India
- Vizag Seaport Private Limited - India
- Kaltim Prima Coal - Indonesia
- Bhushan Steel Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Riau Bara Harum - Indonesia
- Meenaskhi Energy Private Limited - India
- Australian Commodity Traders Exchange
- Pendopo Energi Batubara - Indonesia
- Dalmia Cement Bharat India
- Orica Australia Pty. Ltd.
- Bangladesh Power Developement Board
- Independent Power Producers Association of India
- Kobexindo Tractors - Indoneisa
- Kumho Petrochemical, South Korea
- Oldendorff Carriers - Singapore
- Aditya Birla Group - India
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
- SMG Consultants - Indonesia
- Tata Chemicals Ltd - India
- Georgia Ports Authority, United States
- Ind-Barath Power Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- Bayan Resources Tbk. - Indonesia
- CIMB Investment Bank - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indogreen Group - Indonesia
- Commonwealth Bank - Australia
- India Bulls Power Limited - India
- Coal and Oil Company - UAE
- Merrill Lynch Commodities Europe
- Timah Investasi Mineral - Indoneisa
- Lanco Infratech Ltd - India
- Australian Coal Association
- Chettinad Cement Corporation Ltd - India
- Bhoruka Overseas - Indonesia
- IHS Mccloskey Coal Group - USA
- McConnell Dowell - Australia
- Heidelberg Cement - Germany
- San Jose City I Power Corp, Philippines
- Renaissance Capital - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- New Zealand Coal & Carbon
- Siam City Cement - Thailand
- Eastern Energy - Thailand
- Parliament of New Zealand
- Africa Commodities Group - South Africa
- Karbindo Abesyapradhi - Indoneisa
- PNOC Exploration Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Star Paper Mills Limited - India
- Kideco Jaya Agung - Indonesia
- Orica Mining Services - Indonesia
- The Treasury - Australian Government
- Sindya Power Generating Company Private Ltd
- Cement Manufacturers Association - India
- Minerals Council of Australia
- Mercator Lines Limited - India
- Petron Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Sical Logistics Limited - India
- Coalindo Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Alfred C Toepfer International GmbH - Germany
- Power Finance Corporation Ltd., India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sree Jayajothi Cements Limited - India
- Makarim & Taira - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Gujarat Sidhee Cement - India
- Electricity Generating Authority of Thailand
- Thiess Contractors Indonesia
- Interocean Group of Companies - India
- Jindal Steel & Power Ltd - India
- Price Waterhouse Coopers - Russia
- Economic Council, Georgia
- Posco Energy - South Korea
- Port Waratah Coal Services - Australia
- Chamber of Mines of South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Manunggal Multi Energi - Indonesia
- Indian Oil Corporation Limited
- LBH Netherlands Bv - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mjunction Services Limited - India
- Neyveli Lignite Corporation Ltd, - India
- GVK Power & Infra Limited - India
- Antam Resourcindo - Indonesia
- Central Electricity Authority - India
- International Coal Ventures Pvt Ltd - India
- Standard Chartered Bank - UAE
- GAC Shipping (India) Pvt Ltd
- MS Steel International - UAE
- Marubeni Corporation - India
- Parry Sugars Refinery, India
- Bukit Baiduri Energy - Indonesia
- Bulk Trading Sa - Switzerland
- ICICI Bank Limited - India
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kartika Selabumi Mining - Indonesia
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- VISA Power Limited - India
- Goldman Sachs - Singapore
- London Commodity Brokers - England
- Billiton Holdings Pty Ltd - Australia
- Singapore Mercantile Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Samtan Co., Ltd - South Korea
- Karaikal Port Pvt Ltd - India
- Thai Mozambique Logistica
- SN Aboitiz Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Videocon Industries ltd - India
- Energy Development Corp, Philippines
- Altura Mining Limited, Indonesia
- Miang Besar Coal Terminal - Indonesia
- ASAPP Information Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Indika Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- Electricity Authority, New Zealand
- Bhatia International Limited - India
- Meralco Power Generation, Philippines
- Metalloyd Limited - United Kingdom
- White Energy Company Limited
- Edison Trading Spa - Italy
- Iligan Light & Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- Romanian Commodities Exchange
- Indian Energy Exchange, India
- Cigading International Bulk Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Siam City Cement PLC, Thailand
- Tamil Nadu electricity Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Sojitz Corporation - Japan
- Bharathi Cement Corporation - India
- Maheswari Brothers Coal Limited - India
- Ministry of Transport, Egypt
- PowerSource Philippines DevCo
- Mercuria Energy - Indonesia
- Mintek Dendrill Indonesia
- Barasentosa Lestari - Indonesia
- Globalindo Alam Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining and Power Corporation, Philippines
- Wilmar Investment Holdings
- Savvy Resources Ltd - HongKong
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- Ministry of Mines - Canada
- Anglo American - United Kingdom
- TeaM Sual Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Eastern Coal Council - USA
- TNB Fuel Sdn Bhd - Malaysia
- Kepco SPC Power Corporation, Philippines
- Rio Tinto Coal - Australia
- European Bulk Services B.V. - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Gujarat Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- The University of Queensland
- Madhucon Powers Ltd - India
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- PTC India Limited - India
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