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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, 07 February 12
DRY BULK MARKET FINALLY STOPS DECLINE, POSTS FIRST RISE IN MORE THAN A MONTH - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
After falling to near record lows, not seen since the mid-80s the dry bulk market has finally stopped its path to "hell", with the industr ...
Saturday, 04 February 12
SUPRAMAX DELIVERY SOUTH CHINA FOR TRIPS VIA INDONESIA WERE REPORTED AROUND $ 6,000 PER DAY - VISTAAR
COALspot.com - The markets continued to soften which dropped by almost 11 pct and BDI closing at 647 points.
The drop in BDI was mainly due to dr ...
Thursday, 02 February 12
NO RELIEF YET FOR DRY BULK SHIP OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Although at the start of 2012 nobody can claim that the global seaborne trade has suddenly come to a halt, quite the contrary, it seems that the dry ...
Wednesday, 01 February 12
KRISHNAPATNAM PORT - GOING DEEP TO SOAR HIGH
COALspot.com - Krishnapatnam Port now rightfully claims as the deepest draft port in India, as it has started accepting vessels with maximum permiss ...
Wednesday, 01 February 12
IN JAMBI, MOST MINING COMPANIES LACK 'CLEAR-AND-CLEAN' PERMITS - JP
More than three-quarters of the 386 mining companies in Jambi lack “clear-and-clean” certifications from the government, according to an ...
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- Kideco Jaya Agung - Indonesia
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Central Electricity Authority - India
- Kapuas Tunggal Persada - Indonesia
- Vizag Seaport Private Limited - India
- Vedanta Resources Plc - India
- Ministry of Mines - Canada
- Directorate Of Revenue Intelligence - India
- Wilmar Investment Holdings
- Energy Link Ltd, New Zealand
- Semirara Mining Corp, Philippines
- Heidelberg Cement - Germany
- London Commodity Brokers - England
- OPG Power Generation Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- Kartika Selabumi Mining - Indonesia
- Singapore Mercantile Exchange
- Jorong Barutama Greston.PT - Indonesia
- Videocon Industries ltd - India
- Gujarat Sidhee Cement - India
- Indo Tambangraya Megah - Indonesia
- Siam City Cement PLC, Thailand
- TeaM Sual Corporation - Philippines
- Bangladesh Power Developement Board
- Maheswari Brothers Coal Limited - India
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- Price Waterhouse Coopers - Russia
- Renaissance Capital - South Africa
- Petron Corporation, Philippines
- Electricity Authority, New Zealand
- Romanian Commodities Exchange
- Grasim Industreis Ltd - India
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- Thai Mozambique Logistica
- Karaikal Port Pvt Ltd - India
- Australian Coal Association
- International Coal Ventures Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sree Jayajothi Cements Limited - India
- MS Steel International - UAE
- Economic Council, Georgia
- Edison Trading Spa - Italy
- Power Finance Corporation Ltd., India
- Coalindo Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Sindya Power Generating Company Private Ltd
- Ambuja Cements Ltd - India
- Interocean Group of Companies - India
- Oldendorff Carriers - Singapore
- Simpson Spence & Young - Indonesia
- Barasentosa Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- The State Trading Corporation of India Ltd
- Globalindo Alam Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Uttam Galva Steels Limited - India
- Minerals Council of Australia
- Mercator Lines Limited - India
- Parliament of New Zealand
- PetroVietnam Power Coal Import and Supply Company
- SN Aboitiz Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- Planning Commission, India
- ASAPP Information Group - India
- Metalloyd Limited - United Kingdom
- Lanco Infratech Ltd - India
- SMC Global Power, Philippines
- Medco Energi Mining Internasional
- GN Power Mariveles Coal Plant, Philippines
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Merrill Lynch Commodities Europe
- India Bulls Power Limited - India
- Rio Tinto Coal - Australia
- Kumho Petrochemical, South Korea
- Kepco SPC Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Anglo American - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Intertek Mineral Services - Indonesia
- VISA Power Limited - India
- Therma Luzon, Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Indian Oil Corporation Limited
- Orica Australia Pty. Ltd.
- Pendopo Energi Batubara - Indonesia
- Coastal Gujarat Power Limited - India
- Sakthi Sugars Limited - India
- Cigading International Bulk Terminal - Indonesia
- Tata Chemicals Ltd - India
- Coal and Oil Company - UAE
- European Bulk Services B.V. - Netherlands
- Mercuria Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Global Business Power Corporation, Philippines
- CNBM International Corporation - China
- Marubeni Corporation - India
- The Treasury - Australian Government
- Altura Mining Limited, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- White Energy Company Limited
- Mjunction Services Limited - India
- Krishnapatnam Port Company Ltd. - India
- San Jose City I Power Corp, Philippines
- Ministry of Transport, Egypt
- Xindia Steels Limited - India
- Savvy Resources Ltd - HongKong
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
- Aboitiz Power Corporation - Philippines
- Indian Energy Exchange, India
- Riau Bara Harum - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Chettinad Cement Corporation Ltd - India
- Meralco Power Generation, Philippines
- Standard Chartered Bank - UAE
- New Zealand Coal & Carbon
- CIMB Investment Bank - Malaysia
- Central Java Power - Indonesia
- Goldman Sachs - Singapore
- Orica Mining Services - Indonesia
- Latin American Coal - Colombia
- Deloitte Consulting - India
- Indika Energy - Indonesia
- GVK Power & Infra Limited - India
- Kobexindo Tractors - Indoneisa
- South Luzon Thermal Energy Corporation
- Georgia Ports Authority, United States
- Eastern Energy - Thailand
- LBH Netherlands Bv - Netherlands
- Port Waratah Coal Services - Australia
- Essar Steel Hazira Ltd - India
- Borneo Indobara - Indonesia
- Samtan Co., Ltd - South Korea
- Eastern Coal Council - USA
- Aditya Birla Group - India
- Bhatia International Limited - India
- IHS Mccloskey Coal Group - USA
- Cement Manufacturers Association - India
- Tamil Nadu electricity Board
- Miang Besar Coal Terminal - Indonesia
- PTC India Limited - India
- Attock Cement Pakistan Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mintek Dendrill Indonesia
- Alfred C Toepfer International GmbH - Germany
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- ICICI Bank Limited - India
- PNOC Exploration Corporation - Philippines
- Star Paper Mills Limited - India
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- Sojitz Corporation - Japan
- Formosa Plastics Group - Taiwan
- Larsen & Toubro Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Jindal Steel & Power Ltd - India
- Salva Resources Pvt Ltd - India
- GMR Energy Limited - India
- Commonwealth Bank - Australia
- Madhucon Powers Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Toyota Tsusho Corporation, Japan
- Binh Thuan Hamico - Vietnam
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Agrawal Coal Company - India
- Makarim & Taira - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- PowerSource Philippines DevCo
- Bayan Resources Tbk. - Indonesia
- Manunggal Multi Energi - Indonesia
- The University of Queensland
- Chamber of Mines of South Africa
- IEA Clean Coal Centre - UK
- Straits Asia Resources Limited - Singapore
- Indonesian Coal Mining Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Development Corp, Philippines
- Jaiprakash Power Ventures ltd
- Ministry of Finance - Indonesia
- Meenaskhi Energy Private Limited - India
- Antam Resourcindo - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Sical Logistics Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- Dalmia Cement Bharat India
- Kaltim Prima Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Trasteel International SA, Italy
- Africa Commodities Group - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Carbofer General Trading SA - India
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
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