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