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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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Wednesday, 26 October 11
PWCS GLOBAL SHIPPING BENCHMARKING ANALYSIS: RECOVERY IN 2010 BUT GREAT UNCERTAINLY FOR 2011
The recovery of global trade in 2010 to the same levels as 2008 led to an improvement in the overall performance of shipping companies in 2010 compa ...
Wednesday, 26 October 11
INDIAN MARKET WAS REMAINED TIGHT THE WHOLE LAST WEEK - BRS
The market once more seems to be at a crossroads. The indices last week remained fairly stable (except for the Panamax sector), ending the week as f ...
Tuesday, 25 October 11
DRY BULK MARKET STEADY, ANALYSTS LOOKING FOR ADDED PRESSURE ON THE MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market was unchanged on Monday, with the industry’s benchmark, the BDI (Baltic Dry Index) ending the session at 2,153 points, exa ...
Monday, 24 October 11
NEW HEAD OF INDONESIA'S MINING MINISTRY GETS RAKED OVER THE COALS - JOSEPH KIRSCHKE
COALspot.com - Following Indonesia’s presidential cabinet shakeup last week, many are questioning the qualifications of Energy and Mineral Res ...
Monday, 24 October 11
CHINA QINHUANGDAO COAL PRICE RISES TO HIGHEST IN THREE YEARS - BUSINESSWEEK
Business week reported that, China’s power-station coal price rose to the highest level in three years as power stations and central heating p ...
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- Baramulti Group, Indonesia
- Kartika Selabumi Mining - Indonesia
- VISA Power Limited - India
- Energy Link Ltd, New Zealand
- Marubeni Corporation - India
- Attock Cement Pakistan Limited
- Commonwealth Bank - Australia
- Heidelberg Cement - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Makarim & Taira - Indonesia
- Lanco Infratech Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Central Electricity Authority - India
- Thai Mozambique Logistica
- Africa Commodities Group - South Africa
- Anglo American - United Kingdom
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- Bangladesh Power Developement Board
- New Zealand Coal & Carbon
- Sical Logistics Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Antam Resourcindo - Indonesia
- Tamil Nadu electricity Board
- European Bulk Services B.V. - Netherlands
- Globalindo Alam Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Siam City Cement PLC, Thailand
- Agrawal Coal Company - India
- Bhatia International Limited - India
- The University of Queensland
- Sarangani Energy Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Thiess Contractors Indonesia
- Maheswari Brothers Coal Limited - India
- Eastern Coal Council - USA
- Timah Investasi Mineral - Indoneisa
- Barasentosa Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- ASAPP Information Group - India
- Wood Mackenzie - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Eastern Energy - Thailand
- Interocean Group of Companies - India
- Krishnapatnam Port Company Ltd. - India
- Jorong Barutama Greston.PT - Indonesia
- Power Finance Corporation Ltd., India
- PowerSource Philippines DevCo
- India Bulls Power Limited - India
- Posco Energy - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Dalmia Cement Bharat India
- Parry Sugars Refinery, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining and Power Corporation, Philippines
- Medco Energi Mining Internasional
- Global Coal Blending Company Limited - Australia
- Price Waterhouse Coopers - Russia
- Toyota Tsusho Corporation, Japan
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement - Thailand
- Directorate Of Revenue Intelligence - India
- Vedanta Resources Plc - India
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Straits Asia Resources Limited - Singapore
- Iligan Light & Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- Kapuas Tunggal Persada - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Riau Bara Harum - Indonesia
- ICICI Bank Limited - India
- CNBM International Corporation - China
- GVK Power & Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- MS Steel International - UAE
- Kaltim Prima Coal - Indonesia
- Petron Corporation, Philippines
- PTC India Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Star Paper Mills Limited - India
- Chamber of Mines of South Africa
- Jaiprakash Power Ventures ltd
- Semirara Mining Corp, Philippines
- Planning Commission, India
- Tata Chemicals Ltd - India
- Kideco Jaya Agung - Indonesia
- Sindya Power Generating Company Private Ltd
- Georgia Ports Authority, United States
- Ambuja Cements Ltd - India
- Independent Power Producers Association of India
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- Indika Energy - Indonesia
- London Commodity Brokers - England
- Bukit Makmur.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- Kumho Petrochemical, South Korea
- Cigading International Bulk Terminal - Indonesia
- Edison Trading Spa - Italy
- Karaikal Port Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Mintek Dendrill Indonesia
- Larsen & Toubro Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Manunggal Multi Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- International Coal Ventures Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Uttam Galva Steels Limited - India
- Orica Mining Services - Indonesia
- Borneo Indobara - Indonesia
- Orica Australia Pty. Ltd.
- Mjunction Services Limited - India
- Trasteel International SA, Italy
- White Energy Company Limited
- Bhushan Steel Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Gujarat Sidhee Cement - India
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- GMR Energy Limited - India
- Kobexindo Tractors - Indoneisa
- Energy Development Corp, Philippines
- Altura Mining Limited, Indonesia
- Banpu Public Company Limited - Thailand
- San Jose City I Power Corp, Philippines
- Indian Energy Exchange, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Simpson Spence & Young - Indonesia
- SMC Global Power, Philippines
- Sree Jayajothi Cements Limited - India
- Bukit Baiduri Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Rio Tinto Coal - Australia
- TeaM Sual Corporation - Philippines
- Bharathi Cement Corporation - India
- Singapore Mercantile Exchange
- IHS Mccloskey Coal Group - USA
- IEA Clean Coal Centre - UK
- Goldman Sachs - Singapore
- Kepco SPC Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Aditya Birla Group - India
- Indogreen Group - Indonesia
- Salva Resources Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Central Java Power - Indonesia
- Indonesian Coal Mining Association
- Videocon Industries ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- OPG Power Generation Pvt Ltd - India
- Parliament of New Zealand
- Xindia Steels Limited - India
- Deloitte Consulting - India
- Maharashtra Electricity Regulatory Commission - India
- Economic Council, Georgia
- PetroVietnam Power Coal Import and Supply Company
- Vizag Seaport Private Limited - India
- Intertek Mineral Services - Indonesia
- The State Trading Corporation of India Ltd
- Malabar Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Cement Manufacturers Association - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Standard Chartered Bank - UAE
- Ind-Barath Power Infra Limited - India
- Sakthi Sugars Limited - India
- Coalindo Energy - Indonesia
- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- South Luzon Thermal Energy Corporation
- Romanian Commodities Exchange
- Mercator Lines Limited - India
- Merrill Lynch Commodities Europe
- Australian Coal Association
- Ministry of Finance - Indonesia
- Aboitiz Power Corporation - Philippines
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- Minerals Council of Australia
- Ministry of Transport, Egypt
- Therma Luzon, Inc, Philippines
- Indian Oil Corporation Limited
- Wilmar Investment Holdings
- Binh Thuan Hamico - Vietnam
- Madhucon Powers Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Essar Steel Hazira Ltd - India
- Port Waratah Coal Services - Australia
- Coal and Oil Company - UAE
- Sojitz Corporation - Japan
- Latin American Coal - Colombia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMG Consultants - Indonesia
- McConnell Dowell - Australia
- Meenaskhi Energy Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- The Treasury - Australian Government
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