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