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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, 05 October 11
WITH CHINA ON HOLIDAY, DRY BULK MARKET REMAINS STAGNANT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has remained to healthy levels after last month’s rally, but with China going on holiday this week, things are looking sta ...
Tuesday, 04 October 11
INDONESIA RAISES COAL BENCHMARK (HBA) FOR FIRST TIME IN 4 MONTHS
COALspot.com - Indonesia raised the monthly reference price for sales in October by 2.56 percent, the first increase since June.
The Ministry of ...
Tuesday, 04 October 11
COAL MINING GROUP WANTS EXPORT TAX, NOT EXCISE - JG
One of the leading English news paper in Indonesia, The Jakarta Globe reported that, the government shall reimpose a duty on coal exports, classifyi ...
Sunday, 02 October 11
INDIAN COAL IMPORTS PICKED UP - CAPT. REDDY
COALspot.com - The BDI dropped by 1 pct and Cape index dropped by 6 pct closing at 1,899 points and 3,136 points respectively. However all other seg ...
Saturday, 01 October 11
2012 TO BE ANOTHER CHALLENGING YEAR - CEO, REMI MARITIME
Shipowners are facing another challenging year in 2012 said Mr. Leonidas Polemis CEO of Remi Maritime Corporation, urging caution towards operating ...
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- GMR Energy Limited - India
- Oldendorff Carriers - Singapore
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Anglo American - United Kingdom
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- The Treasury - Australian Government
- Sinarmas Energy and Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Lanco Infratech Ltd - India
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- Goldman Sachs - Singapore
- Globalindo Alam Lestari - Indonesia
- Ministry of Transport, Egypt
- Orica Mining Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Siam City Cement - Thailand
- ICICI Bank Limited - India
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- Antam Resourcindo - Indonesia
- New Zealand Coal & Carbon
- Energy Link Ltd, New Zealand
- Vizag Seaport Private Limited - India
- Ministry of Finance - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Altura Mining Limited, Indonesia
- Jindal Steel & Power Ltd - India
- GAC Shipping (India) Pvt Ltd
- Energy Development Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- Star Paper Mills Limited - India
- Cement Manufacturers Association - India
- Coalindo Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karaikal Port Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- Barasentosa Lestari - Indonesia
- Agrawal Coal Company - India
- SMG Consultants - Indonesia
- IHS Mccloskey Coal Group - USA
- Indonesian Coal Mining Association
- PetroVietnam Power Coal Import and Supply Company
- Minerals Council of Australia
- Meralco Power Generation, Philippines
- Singapore Mercantile Exchange
- Malabar Cements Ltd - India
- India Bulls Power Limited - India
- Meenaskhi Energy Private Limited - India
- Coal and Oil Company - UAE
- The University of Queensland
- Toyota Tsusho Corporation, Japan
- Kapuas Tunggal Persada - Indonesia
- Power Finance Corporation Ltd., India
- PNOC Exploration Corporation - Philippines
- Petron Corporation, Philippines
- Gujarat Sidhee Cement - India
- Kideco Jaya Agung - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Commodity Traders Exchange
- Bhatia International Limited - India
- Eastern Energy - Thailand
- MS Steel International - UAE
- Kepco SPC Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- SMC Global Power, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PTC India Limited - India
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Attock Cement Pakistan Limited
- Bukit Makmur.PT - Indonesia
- Wilmar Investment Holdings
- Central Electricity Authority - India
- Economic Council, Georgia
- Siam City Cement PLC, Thailand
- Kobexindo Tractors - Indoneisa
- Chamber of Mines of South Africa
- Orica Australia Pty. Ltd.
- Jaiprakash Power Ventures ltd
- Therma Luzon, Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Rio Tinto Coal - Australia
- Parry Sugars Refinery, India
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- Kaltim Prima Coal - Indonesia
- Merrill Lynch Commodities Europe
- Trasteel International SA, Italy
- Indian Oil Corporation Limited
- Straits Asia Resources Limited - Singapore
- Bayan Resources Tbk. - Indonesia
- Bukit Baiduri Energy - Indonesia
- GVK Power & Infra Limited - India
- Planning Commission, India
- Maheswari Brothers Coal Limited - India
- SN Aboitiz Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Renaissance Capital - South Africa
- Georgia Ports Authority, United States
- TeaM Sual Corporation - Philippines
- Standard Chartered Bank - UAE
- Australian Coal Association
- Ministry of Mines - Canada
- Mintek Dendrill Indonesia
- Global Business Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Uttam Galva Steels Limited - India
- Aditya Birla Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Parliament of New Zealand
- Holcim Trading Pte Ltd - Singapore
- Banpu Public Company Limited - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- PowerSource Philippines DevCo
- Kalimantan Lumbung Energi - Indonesia
- CNBM International Corporation - China
- Videocon Industries ltd - India
- Xindia Steels Limited - India
- Bulk Trading Sa - Switzerland
- Indika Energy - Indonesia
- Carbofer General Trading SA - India
- Ind-Barath Power Infra Limited - India
- Ambuja Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Eastern Coal Council - USA
- Bangladesh Power Developement Board
- Vijayanagar Sugar Pvt Ltd - India
- Vedanta Resources Plc - India
- Tata Chemicals Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Samtan Co., Ltd - South Korea
- Intertek Mineral Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Metalloyd Limited - United Kingdom
- ASAPP Information Group - India
- Manunggal Multi Energi - Indonesia
- Edison Trading Spa - Italy
- Simpson Spence & Young - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- OPG Power Generation Pvt Ltd - India
- Romanian Commodities Exchange
- Binh Thuan Hamico - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Posco Energy - South Korea
- Latin American Coal - Colombia
- Kartika Selabumi Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Generating Authority of Thailand
- London Commodity Brokers - England
- LBH Netherlands Bv - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rashtriya Ispat Nigam Limited - India
- White Energy Company Limited
- Thai Mozambique Logistica
- Pendopo Energi Batubara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Medco Energi Mining Internasional
- Aboitiz Power Corporation - Philippines
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- Commonwealth Bank - Australia
- Mjunction Services Limited - India
- Billiton Holdings Pty Ltd - Australia
- Dalmia Cement Bharat India
- Price Waterhouse Coopers - Russia
- Thiess Contractors Indonesia
- Formosa Plastics Group - Taiwan
- Timah Investasi Mineral - Indoneisa
- Sarangani Energy Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Mercator Lines Limited - India
- Grasim Industreis Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- CIMB Investment Bank - Malaysia
- Kumho Petrochemical, South Korea
- Chettinad Cement Corporation Ltd - India
- Heidelberg Cement - Germany
- Central Java Power - Indonesia
- Bharathi Cement Corporation - India
- Port Waratah Coal Services - Australia
- Riau Bara Harum - Indonesia
- Tamil Nadu electricity Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sakthi Sugars Limited - India
- Interocean Group of Companies - India
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- Salva Resources Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Indian Energy Exchange, India
- South Luzon Thermal Energy Corporation
- Savvy Resources Ltd - HongKong
- Maharashtra Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
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