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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, 27 March 12
DRY BULK MARKET KEEP RISING FOLLOWING THE SAME TREND OF LAST WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept its upward momentum this week, on the same reasons of those last week. That is, the smaller ship types are still on the ris ...
Monday, 26 March 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The Baltic Dry Index follows its upward incline for fourth consecutive week by rising to more than 900 points, up by 37% from the bottom low in the ...
Monday, 26 March 12
GOLDEN MINES FY11 REVENUE JUMPS 209% - INSIDER STORIES
Insider Stories reported that, coal miner PT Golden Energy Mines Tbk (GEMS), that is controlled by Sinar Mas Group, recorded a 209% jump in revenue ...
Saturday, 24 March 12
AUSTRALIA'S MINERAL TAX : BENCHMARK FOR OTHER COUNTRIES - SUNIL K KUMBHAT
COALspot.com - Natural resources rich counties like Australia , Indonesia , South Africa , Brazil etc are going through a spectacular resources boom ...
Saturday, 24 March 12
THE AVERAGE CHARTER RATES WAS AT CAPESIZE $ 4,546 PER DAY VS SUPRAMAX / $ 10,819 PER DAY - VISTAAR
COALspot.com - The BDI crossed 900 points this week closing at 908 points up by 3.89 pct. All other sectors were up except for cape index whic ...
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- Gujarat Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- GVK Power & Infra Limited - India
- Tata Chemicals Ltd - India
- Iligan Light & Power Inc, Philippines
- Thiess Contractors Indonesia
- Wood Mackenzie - Singapore
- Ambuja Cements Ltd - India
- Orica Australia Pty. Ltd.
- Kapuas Tunggal Persada - Indonesia
- Kaltim Prima Coal - Indonesia
- Independent Power Producers Association of India
- Global Coal Blending Company Limited - Australia
- Jaiprakash Power Ventures ltd
- Orica Mining Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Eastern Energy - Thailand
- Karaikal Port Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- AsiaOL BioFuels Corp., Philippines
- Economic Council, Georgia
- Bhushan Steel Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Romanian Commodities Exchange
- Sindya Power Generating Company Private Ltd
- Holcim Trading Pte Ltd - Singapore
- Deloitte Consulting - India
- Kumho Petrochemical, South Korea
- Sree Jayajothi Cements Limited - India
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
- Cement Manufacturers Association - India
- McConnell Dowell - Australia
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Chettinad Cement Corporation Ltd - India
- South Luzon Thermal Energy Corporation
- Simpson Spence & Young - Indonesia
- Makarim & Taira - Indonesia
- Larsen & Toubro Limited - India
- Karbindo Abesyapradhi - Indoneisa
- The University of Queensland
- Indonesian Coal Mining Association
- Minerals Council of Australia
- Australian Coal Association
- Chamber of Mines of South Africa
- Intertek Mineral Services - Indonesia
- Eastern Coal Council - USA
- Sakthi Sugars Limited - India
- Maheswari Brothers Coal Limited - India
- Port Waratah Coal Services - Australia
- Energy Link Ltd, New Zealand
- Siam City Cement PLC, Thailand
- Toyota Tsusho Corporation, Japan
- Meenaskhi Energy Private Limited - India
- Banpu Public Company Limited - Thailand
- Binh Thuan Hamico - Vietnam
- Malabar Cements Ltd - India
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- PowerSource Philippines DevCo
- Indo Tambangraya Megah - Indonesia
- Madhucon Powers Ltd - India
- Grasim Industreis Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- ICICI Bank Limited - India
- Star Paper Mills Limited - India
- Singapore Mercantile Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Mercator Lines Limited - India
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- Directorate Of Revenue Intelligence - India
- Uttam Galva Steels Limited - India
- Altura Mining Limited, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Oil Corporation Limited
- Semirara Mining and Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Carbofer General Trading SA - India
- Neyveli Lignite Corporation Ltd, - India
- Bhoruka Overseas - Indonesia
- Pendopo Energi Batubara - Indonesia
- New Zealand Coal & Carbon
- Tamil Nadu electricity Board
- Attock Cement Pakistan Limited
- IHS Mccloskey Coal Group - USA
- Kideco Jaya Agung - Indonesia
- PNOC Exploration Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- The Treasury - Australian Government
- Wilmar Investment Holdings
- Latin American Coal - Colombia
- Australian Commodity Traders Exchange
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- Merrill Lynch Commodities Europe
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- Trasteel International SA, Italy
- Thai Mozambique Logistica
- Power Finance Corporation Ltd., India
- Samtan Co., Ltd - South Korea
- San Jose City I Power Corp, Philippines
- Planning Commission, India
- Electricity Generating Authority of Thailand
- Krishnapatnam Port Company Ltd. - India
- Vedanta Resources Plc - India
- Pipit Mutiara Jaya. PT, Indonesia
- Mercuria Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- GMR Energy Limited - India
- Parliament of New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Mintek Dendrill Indonesia
- Therma Luzon, Inc, Philippines
- Anglo American - United Kingdom
- LBH Netherlands Bv - Netherlands
- Central Java Power - Indonesia
- Lanco Infratech Ltd - India
- IEA Clean Coal Centre - UK
- MS Steel International - UAE
- PTC India Limited - India
- Rio Tinto Coal - Australia
- Straits Asia Resources Limited - Singapore
- Salva Resources Pvt Ltd - India
- Africa Commodities Group - South Africa
- Dalmia Cement Bharat India
- OPG Power Generation Pvt Ltd - India
- Bhatia International Limited - India
- Bulk Trading Sa - Switzerland
- Borneo Indobara - Indonesia
- TeaM Sual Corporation - Philippines
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- Electricity Authority, New Zealand
- Kobexindo Tractors - Indoneisa
- Barasentosa Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Heidelberg Cement - Germany
- Global Business Power Corporation, Philippines
- Coal and Oil Company - UAE
- Sojitz Corporation - Japan
- Ministry of Transport, Egypt
- Standard Chartered Bank - UAE
- GAC Shipping (India) Pvt Ltd
- Ceylon Electricity Board - Sri Lanka
- Meralco Power Generation, Philippines
- Miang Besar Coal Terminal - Indonesia
- India Bulls Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Medco Energi Mining Internasional
- Central Electricity Authority - India
- ASAPP Information Group - India
- Commonwealth Bank - Australia
- Jorong Barutama Greston.PT - Indonesia
- Bukit Makmur.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indogreen Group - Indonesia
- Sical Logistics Limited - India
- Indika Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- White Energy Company Limited
- Sinarmas Energy and Mining - Indonesia
- Agrawal Coal Company - India
- Coastal Gujarat Power Limited - India
- Ministry of Finance - Indonesia
- Antam Resourcindo - Indonesia
- Globalindo Alam Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Gujarat Sidhee Cement - India
- European Bulk Services B.V. - Netherlands
- Siam City Cement - Thailand
- Parry Sugars Refinery, India
- Global Green Power PLC Corporation, Philippines
- Posco Energy - South Korea
- Energy Development Corp, Philippines
- Marubeni Corporation - India
- Ministry of Mines - Canada
- CIMB Investment Bank - Malaysia
- Manunggal Multi Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Riau Bara Harum - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bharathi Cement Corporation - India
- Vizag Seaport Private Limited - India
- SMG Consultants - Indonesia
- Kartika Selabumi Mining - Indonesia
- Renaissance Capital - South Africa
- Semirara Mining Corp, Philippines
- Xindia Steels Limited - India
- Indian Energy Exchange, India
- Leighton Contractors Pty Ltd - Australia
- Goldman Sachs - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- SMC Global Power, Philippines
- Coalindo Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CNBM International Corporation - China
- London Commodity Brokers - England
- Alfred C Toepfer International GmbH - Germany
- PetroVietnam Power Coal Import and Supply Company
- Maharashtra Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Savvy Resources Ltd - HongKong
- Aditya Birla Group - India
- Billiton Holdings Pty Ltd - Australia
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