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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, 20 October 11
CAPESIZE - TUBARAO /QINGDAO BEING FIXED AT STRONG US$ 29.75 PMT
Handy
The Atlantic market is quite steady, and market seems to be around the same levels as last week. Fewer fixtures reported though. ...
Thursday, 20 October 11
BRACKEN INTERNATIONAL MINING LISTS ON FRANKFURT STOCK EXCHANGE
Press Release - Bracken International Mining (Code:1BM) listed on the Deutsche Börse’s Frankfurt Stock Exchange today at €1.00 with ...
Thursday, 20 October 11
CAPESIZES, SUPRAMAXES LEAD GAINS FOR DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Struggling to find additional support, but still managing to post gains, the dry bulk market has stabilized itself on higher levels again yesterday, ...
Wednesday, 19 October 11
METALLURGICAL COAL PRICES TO DROP BELOW US$240/TONNE - WOOD MACKENZIE
Wood Mackenzie Says Metallurgical Coal Prices to Drop Below US$240/tonne by Q4 2012 But Long-term Demand Fundamentals Remain Robust
Wood Mackenzi ...
Wednesday, 19 October 11
SUPRAMAX MARKET WAS VERY FIRM LAST WEEK - BRS
With all sectors contributing positively, the BDI ended the week at 2,173 points (+8.6%), its highest level so far in 2011. The BCI stood at 3,587 ( ...
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- Kohat Cement Company Ltd. - Pakistan
- Baramulti Group, Indonesia
- Bulk Trading Sa - Switzerland
- Trasteel International SA, Italy
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- Bhoruka Overseas - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Energy Development Corp, Philippines
- Uttam Galva Steels Limited - India
- Oldendorff Carriers - Singapore
- Star Paper Mills Limited - India
- Deloitte Consulting - India
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- Wilmar Investment Holdings
- Price Waterhouse Coopers - Russia
- PowerSource Philippines DevCo
- Central Java Power - Indonesia
- Heidelberg Cement - Germany
- McConnell Dowell - Australia
- Orica Australia Pty. Ltd.
- Sical Logistics Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- Malabar Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Bukit Makmur.PT - Indonesia
- Tata Chemicals Ltd - India
- Simpson Spence & Young - Indonesia
- Indonesian Coal Mining Association
- Sojitz Corporation - Japan
- Timah Investasi Mineral - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Rio Tinto Coal - Australia
- Bukit Baiduri Energy - Indonesia
- Anglo American - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Coal and Oil Company - UAE
- Renaissance Capital - South Africa
- Energy Link Ltd, New Zealand
- Banpu Public Company Limited - Thailand
- ICICI Bank Limited - India
- Antam Resourcindo - Indonesia
- Jaiprakash Power Ventures ltd
- Karbindo Abesyapradhi - Indoneisa
- Savvy Resources Ltd - HongKong
- Singapore Mercantile Exchange
- Aditya Birla Group - India
- Bharathi Cement Corporation - India
- Madhucon Powers Ltd - India
- Chettinad Cement Corporation Ltd - India
- Economic Council, Georgia
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- Gujarat Sidhee Cement - India
- Planning Commission, India
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Georgia Ports Authority, United States
- New Zealand Coal & Carbon
- Billiton Holdings Pty Ltd - Australia
- Dalmia Cement Bharat India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Energy Exchange, India
- Cigading International Bulk Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Standard Chartered Bank - UAE
- CNBM International Corporation - China
- Electricity Generating Authority of Thailand
- Rashtriya Ispat Nigam Limited - India
- Indogreen Group - Indonesia
- TeaM Sual Corporation - Philippines
- Bhatia International Limited - India
- Straits Asia Resources Limited - Singapore
- The University of Queensland
- Riau Bara Harum - Indonesia
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- Power Finance Corporation Ltd., India
- Thai Mozambique Logistica
- Mintek Dendrill Indonesia
- Latin American Coal - Colombia
- Minerals Council of Australia
- Cement Manufacturers Association - India
- Meenaskhi Energy Private Limited - India
- Salva Resources Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Videocon Industries ltd - India
- PTC India Limited - India
- Carbofer General Trading SA - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parry Sugars Refinery, India
- European Bulk Services B.V. - Netherlands
- Sakthi Sugars Limited - India
- Australian Commodity Traders Exchange
- Siam City Cement - Thailand
- Global Business Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kideco Jaya Agung - Indonesia
- Jindal Steel & Power Ltd - India
- GMR Energy Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Sindya Power Generating Company Private Ltd
- Holcim Trading Pte Ltd - Singapore
- Sree Jayajothi Cements Limited - India
- Bangladesh Power Developement Board
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- Siam City Cement PLC, Thailand
- San Jose City I Power Corp, Philippines
- Iligan Light & Power Inc, Philippines
- SMC Global Power, Philippines
- Alfred C Toepfer International GmbH - Germany
- Borneo Indobara - Indonesia
- The Treasury - Australian Government
- Thiess Contractors Indonesia
- Independent Power Producers Association of India
- Indika Energy - Indonesia
- Goldman Sachs - Singapore
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- MS Steel International - UAE
- Maharashtra Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Australian Coal Association
- Kepco SPC Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Coal Council - USA
- Ministry of Mines - Canada
- Merrill Lynch Commodities Europe
- Coalindo Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Port Waratah Coal Services - Australia
- Vizag Seaport Private Limited - India
- South Luzon Thermal Energy Corporation
- Wood Mackenzie - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Vedanta Resources Plc - India
- Barasentosa Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Medco Energi Mining Internasional
- Petrochimia International Co. Ltd.- Taiwan
- Kapuas Tunggal Persada - Indonesia
- Commonwealth Bank - Australia
- Attock Cement Pakistan Limited
- PetroVietnam Power Coal Import and Supply Company
- Maheswari Brothers Coal Limited - India
- Eastern Energy - Thailand
- Global Coal Blending Company Limited - Australia
- Ambuja Cements Ltd - India
- Interocean Group of Companies - India
- GVK Power & Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Mercator Lines Limited - India
- Meralco Power Generation, Philippines
- Mercuria Energy - Indonesia
- IEA Clean Coal Centre - UK
- Pendopo Energi Batubara - Indonesia
- CIMB Investment Bank - Malaysia
- Formosa Plastics Group - Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Lanco Infratech Ltd - India
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- Petron Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Electricity Authority, New Zealand
- Marubeni Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Mining Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Central Electricity Authority - India
- Edison Trading Spa - Italy
- Makarim & Taira - Indonesia
- IHS Mccloskey Coal Group - USA
- Semirara Mining and Power Corporation, Philippines
- Chamber of Mines of South Africa
- Ind-Barath Power Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- The State Trading Corporation of India Ltd
- Larsen & Toubro Limited - India
- Miang Besar Coal Terminal - Indonesia
- Mjunction Services Limited - India
- Sarangani Energy Corporation, Philippines
- Xindia Steels Limited - India
- Indian Oil Corporation Limited
- India Bulls Power Limited - India
- Posco Energy - South Korea
- Bayan Resources Tbk. - Indonesia
- Leighton Contractors Pty Ltd - Australia
- ASAPP Information Group - India
- Essar Steel Hazira Ltd - India
- Africa Commodities Group - South Africa
- Ministry of Transport, Egypt
- Coastal Gujarat Power Limited - India
- VISA Power Limited - India
- White Energy Company Limited
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