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