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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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Thursday, 03 November 11
DRY BULK MARKET OFFICIALLY IN THE RED ON LOWER CARGO DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept falling yesterday, on lower iron ore demand, which has caused the industry’s benchmark, the BDI (Baltic Dry Index) to ...
Wednesday, 02 November 11
MMTC TO BUY 3.73 MILLION TONS OF COAL FOR 2011- 2013
COALspot.com - India’s state-owned coal and mineral trader MMTC looking for 3.73 million tons of power plant coal for the period 2011 - 2012/ ...
Wednesday, 02 November 11
PANAMAX MARKET BECAME QUIETER AFTER THE RECENT RECOVERY - BRS
There were substantial losses across the board this week: the BDI lost 6.3% to end at 2,018 and the BCI 8.2% to end 3,274. In the smaller sizes the ...
Tuesday, 01 November 11
BORNEO LUMBUNG BUYS 23.8% INTEREST IN BUMI
COALspot.com - PT. Borneo Lumbung Energi (BORN), an Indonesian coking coal producer announces that it has signed a sale and purchase agreement, cond ...
Tuesday, 01 November 11
BAKRIE FORMS STRATEGIC PARTNERSHIP WITH BORNEO - REDUCING DEBT BY USD 1 BILLION
Press Release - Enhancing the standing of “Indonesia Inc.” at the London Stock Exchange PT Bakrie & Brothers Tbk (“BNBR” ...
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- Billiton Holdings Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- MS Steel International - UAE
- Lanco Infratech Ltd - India
- Vizag Seaport Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- Indika Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Bahari Cakrawala Sebuku - Indonesia
- Commonwealth Bank - Australia
- Grasim Industreis Ltd - India
- Ambuja Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Simpson Spence & Young - Indonesia
- Sical Logistics Limited - India
- Heidelberg Cement - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Central Electricity Authority - India
- Miang Besar Coal Terminal - Indonesia
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- Barasentosa Lestari - Indonesia
- Singapore Mercantile Exchange
- Price Waterhouse Coopers - Russia
- Videocon Industries ltd - India
- Aditya Birla Group - India
- Formosa Plastics Group - Taiwan
- Semirara Mining Corp, Philippines
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Georgia Ports Authority, United States
- Larsen & Toubro Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Parliament of New Zealand
- Krishnapatnam Port Company Ltd. - India
- Indonesian Coal Mining Association
- Neyveli Lignite Corporation Ltd, - India
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- Australian Coal Association
- Attock Cement Pakistan Limited
- International Coal Ventures Pvt Ltd - India
- Eastern Coal Council - USA
- Planning Commission, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aboitiz Power Corporation - Philippines
- Coal and Oil Company - UAE
- Vedanta Resources Plc - India
- IEA Clean Coal Centre - UK
- Goldman Sachs - Singapore
- Latin American Coal - Colombia
- Carbofer General Trading SA - India
- Port Waratah Coal Services - Australia
- Globalindo Alam Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Indian Oil Corporation Limited
- South Luzon Thermal Energy Corporation
- San Jose City I Power Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Gujarat Sidhee Cement - India
- Deloitte Consulting - India
- Therma Luzon, Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Samtan Co., Ltd - South Korea
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- Altura Mining Limited, Indonesia
- Bhushan Steel Limited - India
- Romanian Commodities Exchange
- Metalloyd Limited - United Kingdom
- Baramulti Group, Indonesia
- ICICI Bank Limited - India
- Meralco Power Generation, Philippines
- Ministry of Finance - Indonesia
- Borneo Indobara - Indonesia
- Mjunction Services Limited - India
- Electricity Authority, New Zealand
- GVK Power & Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- Edison Trading Spa - Italy
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- White Energy Company Limited
- Kalimantan Lumbung Energi - Indonesia
- Bhatia International Limited - India
- Posco Energy - South Korea
- Mintek Dendrill Indonesia
- Standard Chartered Bank - UAE
- Mercator Lines Limited - India
- Electricity Generating Authority of Thailand
- Rio Tinto Coal - Australia
- Gujarat Mineral Development Corp Ltd - India
- Directorate Of Revenue Intelligence - India
- Central Java Power - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Indo Tambangraya Megah - Indonesia
- Trasteel International SA, Italy
- GMR Energy Limited - India
- Australian Commodity Traders Exchange
- India Bulls Power Limited - India
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- Global Coal Blending Company Limited - Australia
- Iligan Light & Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- SN Aboitiz Power Inc, Philippines
- Wilmar Investment Holdings
- Sarangani Energy Corporation, Philippines
- Madhucon Powers Ltd - India
- Siam City Cement PLC, Thailand
- AsiaOL BioFuels Corp., Philippines
- CNBM International Corporation - China
- Agrawal Coal Company - India
- Anglo American - United Kingdom
- Minerals Council of Australia
- Renaissance Capital - South Africa
- Cement Manufacturers Association - India
- Jorong Barutama Greston.PT - Indonesia
- Power Finance Corporation Ltd., India
- OPG Power Generation Pvt Ltd - India
- Sojitz Corporation - Japan
- Africa Commodities Group - South Africa
- Antam Resourcindo - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bayan Resources Tbk. - Indonesia
- Xindia Steels Limited - India
- TeaM Sual Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Ministry of Mines - Canada
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- Kumho Petrochemical, South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Energy Exchange, India
- Economic Council, Georgia
- Ind-Barath Power Infra Limited - India
- Independent Power Producers Association of India
- Uttam Galva Steels Limited - India
- Merrill Lynch Commodities Europe
- Ceylon Electricity Board - Sri Lanka
- Pendopo Energi Batubara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Sindya Power Generating Company Private Ltd
- Sakthi Sugars Limited - India
- Rashtriya Ispat Nigam Limited - India
- Global Business Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- PTC India Limited - India
- Chamber of Mines of South Africa
- London Commodity Brokers - England
- The University of Queensland
- Essar Steel Hazira Ltd - India
- PNOC Exploration Corporation - Philippines
- Siam City Cement - Thailand
- New Zealand Coal & Carbon
- Intertek Mineral Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- Eastern Energy - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thiess Contractors Indonesia
- Wood Mackenzie - Singapore
- LBH Netherlands Bv - Netherlands
- Mercuria Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Kaltim Prima Coal - Indonesia
- McConnell Dowell - Australia
- Medco Energi Mining Internasional
- Straits Asia Resources Limited - Singapore
- ASAPP Information Group - India
- VISA Power Limited - India
- Karaikal Port Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Petron Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parry Sugars Refinery, India
- Ministry of Transport, Egypt
- Indogreen Group - Indonesia
- SMC Global Power, Philippines
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- Marubeni Corporation - India
- The State Trading Corporation of India Ltd
- Bharathi Cement Corporation - India
- The Treasury - Australian Government
- Holcim Trading Pte Ltd - Singapore
- Kobexindo Tractors - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kepco SPC Power Corporation, Philippines
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