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