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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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Friday, 02 December 11
DRY BULK CARRIERS BACK IN THE SPOTLIGHT AS MARKET SPEEDS UP - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the tanker and container markets suffering dearly, it seems that the tide has once again turned in favor of the dry bulk carriers, despite over ...
Thursday, 01 December 11
DRY BULK MARKET RISES TO NEW HEIGHTS ON RENEWED DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept on rising this week, with the industry’s benchmark, the Baltic Dry Index (BDI) climbing to 1,846 points on Wednes ...
Tuesday, 29 November 11
SOUTH AFRICAN COAL INTO CHINA, THE ACTIVITY WAS SLOW - BRS
Capesize
The Capesize market in Atlantic stayed pretty firm last week with transatlantic rounds being fixed in the high twenties. Sentiment was les ...
Tuesday, 29 November 11
GOLDEN GATE BRIDGE OF INDONESIA COLLAPSED AT KUKAR, EAST KALIMANTAN
COALspot.com - A suspension bridge in Indonesia’s east Kalimantan province over the Mahakam river collapsed on Saturday, killing at least elev ...
Tuesday, 29 November 11
BUKIT ASAM SCOUTS RP3 TRILLION PROFIT - INSIDER STORIES
The state-controlled coal miner PT Bukit Asam Tbk (PTBA) expects to post a Rp3 trillion net income this year, reaching its target which is 50% above ...
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- Medco Energi Mining Internasional
- Sinarmas Energy and Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- Asmin Koalindo Tuhup - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Independent Power Producers Association of India
- Trasteel International SA, Italy
- Ministry of Transport, Egypt
- CIMB Investment Bank - Malaysia
- Banpu Public Company Limited - Thailand
- Thai Mozambique Logistica
- LBH Netherlands Bv - Netherlands
- Savvy Resources Ltd - HongKong
- Globalindo Alam Lestari - Indonesia
- Indian Energy Exchange, India
- Coal and Oil Company - UAE
- Global Business Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Bhoruka Overseas - Indonesia
- Meralco Power Generation, Philippines
- Bhushan Steel Limited - India
- Antam Resourcindo - Indonesia
- Uttam Galva Steels Limited - India
- Orica Mining Services - Indonesia
- Baramulti Group, Indonesia
- Riau Bara Harum - Indonesia
- Ambuja Cements Ltd - India
- Posco Energy - South Korea
- Madhucon Powers Ltd - India
- SMC Global Power, Philippines
- Orica Australia Pty. Ltd.
- India Bulls Power Limited - India
- ICICI Bank Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Central Electricity Authority - India
- Bahari Cakrawala Sebuku - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Africa Commodities Group - South Africa
- Star Paper Mills Limited - India
- Attock Cement Pakistan Limited
- Jindal Steel & Power Ltd - India
- Anglo American - United Kingdom
- Sindya Power Generating Company Private Ltd
- Energy Development Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sical Logistics Limited - India
- Indonesian Coal Mining Association
- Coastal Gujarat Power Limited - India
- Simpson Spence & Young - Indonesia
- Merrill Lynch Commodities Europe
- PowerSource Philippines DevCo
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GMR Energy Limited - India
- Karbindo Abesyapradhi - Indoneisa
- South Luzon Thermal Energy Corporation
- Jaiprakash Power Ventures ltd
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- London Commodity Brokers - England
- IEA Clean Coal Centre - UK
- Leighton Contractors Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Makarim & Taira - Indonesia
- Edison Trading Spa - Italy
- Vizag Seaport Private Limited - India
- Oldendorff Carriers - Singapore
- Parry Sugars Refinery, India
- European Bulk Services B.V. - Netherlands
- Minerals Council of Australia
- Vijayanagar Sugar Pvt Ltd - India
- Economic Council, Georgia
- MS Steel International - UAE
- Kapuas Tunggal Persada - Indonesia
- Port Waratah Coal Services - Australia
- Bangladesh Power Developement Board
- Maharashtra Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Directorate General of MIneral and Coal - Indonesia
- Videocon Industries ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Ind-Barath Power Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Asam (Persero) Tbk - Indonesia
- Kumho Petrochemical, South Korea
- The State Trading Corporation of India Ltd
- Petrochimia International Co. Ltd.- Taiwan
- AsiaOL BioFuels Corp., Philippines
- Rashtriya Ispat Nigam Limited - India
- Essar Steel Hazira Ltd - India
- Toyota Tsusho Corporation, Japan
- Eastern Energy - Thailand
- TeaM Sual Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- The University of Queensland
- Australian Coal Association
- Straits Asia Resources Limited - Singapore
- Intertek Mineral Services - Indonesia
- Lanco Infratech Ltd - India
- Rio Tinto Coal - Australia
- Siam City Cement PLC, Thailand
- Indika Energy - Indonesia
- SMG Consultants - Indonesia
- Petron Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Singapore Mercantile Exchange
- Malabar Cements Ltd - India
- San Jose City I Power Corp, Philippines
- Standard Chartered Bank - UAE
- Bayan Resources Tbk. - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Latin American Coal - Colombia
- GVK Power & Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- Heidelberg Cement - Germany
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Indo Tambangraya Megah - Indonesia
- Mintek Dendrill Indonesia
- IHS Mccloskey Coal Group - USA
- Cement Manufacturers Association - India
- Bharathi Cement Corporation - India
- Coalindo Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Wood Mackenzie - Singapore
- Bukit Baiduri Energy - Indonesia
- ASAPP Information Group - India
- Sree Jayajothi Cements Limited - India
- Therma Luzon, Inc, Philippines
- Xindia Steels Limited - India
- Tata Chemicals Ltd - India
- GAC Shipping (India) Pvt Ltd
- Gujarat Mineral Development Corp Ltd - India
- PTC India Limited - India
- PNOC Exploration Corporation - Philippines
- VISA Power Limited - India
- Larsen & Toubro Limited - India
- Sarangani Energy Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Georgia Ports Authority, United States
- Global Coal Blending Company Limited - Australia
- Metalloyd Limited - United Kingdom
- Renaissance Capital - South Africa
- Gujarat Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Thiess Contractors Indonesia
- Kideco Jaya Agung - Indonesia
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Agrawal Coal Company - India
- Vedanta Resources Plc - India
- Barasentosa Lestari - Indonesia
- Aditya Birla Group - India
- Borneo Indobara - Indonesia
- Price Waterhouse Coopers - Russia
- The Treasury - Australian Government
- Electricity Authority, New Zealand
- Ministry of Finance - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Power Finance Corporation Ltd., India
- Samtan Co., Ltd - South Korea
- Bhatia International Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Sojitz Corporation - Japan
- CNBM International Corporation - China
- Kartika Selabumi Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Mercuria Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Grasim Industreis Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Goldman Sachs - Singapore
- Gujarat Sidhee Cement - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Salva Resources Pvt Ltd - India
- New Zealand Coal & Carbon
- Sakthi Sugars Limited - India
- Electricity Generating Authority of Thailand
- Directorate Of Revenue Intelligence - India
- Karaikal Port Pvt Ltd - India
- White Energy Company Limited
- Planning Commission, India
- Parliament of New Zealand
- Interocean Group of Companies - India
- Ministry of Mines - Canada
- Semirara Mining and Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Commonwealth Bank - Australia
- Indogreen Group - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- McConnell Dowell - Australia
- Meenaskhi Energy Private Limited - India
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Neyveli Lignite Corporation Ltd, - India
- Global Green Power PLC Corporation, Philippines
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mjunction Services Limited - India
- Romanian Commodities Exchange
- Mercator Lines Limited - India
- Australian Commodity Traders Exchange
- Dalmia Cement Bharat India
- Bukit Makmur.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Altura Mining Limited, Indonesia
- Siam City Cement - Thailand
- Formosa Plastics Group - Taiwan
- International Coal Ventures Pvt Ltd - India
- Marubeni Corporation - India
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