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