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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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Tuesday, 05 April 11
DRY BULK MARKET DOWN ON FIRST DAY OF SECOND QUARTER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market began the second quarter on a downward pattern, with the industry’s benchmark, the Baltic Dry Index (BDI) shedding 1.45 pe ...
Monday, 04 April 11
INDONESIA INTERNATIONAL CONFERENCE FOCUS ON INDONESIA'S ECONOMY (IICFIE) 2011 MASTER PLAN TO ACCELERATE THE ECONOMIC DEVELOPMENT
Press Release - Since couple of years, Indonesia's economy show impressive growth. What is the Indonesia's Economic Corridor and the Master plan t ...
Saturday, 02 April 11
TNPL CALLS FOR 160KT OF NON-COKING COAL
COALspot.com - Tamil Nadu Newsprint and Papers Limited (TNPL), is seeking to procure another 160,000 MT +/- 5 percent of Non-Coking imported C ...
Saturday, 02 April 11
THE FREIGHT MARKETS LIKELY TO BE SOFT NEXT WEEK - VISTAAR SINGAPORE
COALspot.com - The freight market softened this week affecting all sectors with BDI down by 65 points (down by 4.10 pct) and closed at 1,520 points. ...
Friday, 01 April 11
SUPRAS EX RICHARDS BAY COAL TERMINAL TO INDIA HOVERING AT $ 25 - 27.00 PMT - FEARNBULK
Handy
Atlantic markets remain stable with more activity from the Black Sea to FEast paying in the mid 20´s on Supras. The USG remains firm p ...
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- Toyota Tsusho Corporation, Japan
- Petron Corporation, Philippines
- Borneo Indobara - Indonesia
- Aboitiz Power Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Salva Resources Pvt Ltd - India
- Wood Mackenzie - Singapore
- Larsen & Toubro Limited - India
- Electricity Generating Authority of Thailand
- Malabar Cements Ltd - India
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- Baramulti Group, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement - Thailand
- Kartika Selabumi Mining - Indonesia
- Independent Power Producers Association of India
- Kideco Jaya Agung - Indonesia
- Anglo American - United Kingdom
- Commonwealth Bank - Australia
- Meralco Power Generation, Philippines
- Mjunction Services Limited - India
- Semirara Mining and Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Ambuja Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Economic Council, Georgia
- Thai Mozambique Logistica
- Holcim Trading Pte Ltd - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Africa Commodities Group - South Africa
- Coalindo Energy - Indonesia
- Minerals Council of Australia
- Renaissance Capital - South Africa
- TeaM Sual Corporation - Philippines
- Standard Chartered Bank - UAE
- Barasentosa Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Vedanta Resources Plc - India
- Kaltim Prima Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Indogreen Group - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The State Trading Corporation of India Ltd
- Uttam Galva Steels Limited - India
- GMR Energy Limited - India
- The University of Queensland
- South Luzon Thermal Energy Corporation
- Ministry of Transport, Egypt
- Riau Bara Harum - Indonesia
- LBH Netherlands Bv - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Videocon Industries ltd - India
- Ind-Barath Power Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Bharathi Cement Corporation - India
- Bhushan Steel Limited - India
- Mercator Lines Limited - India
- Indonesian Coal Mining Association
- PowerSource Philippines DevCo
- Bhatia International Limited - India
- Savvy Resources Ltd - HongKong
- Bukit Asam (Persero) Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Edison Trading Spa - Italy
- Electricity Authority, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Merrill Lynch Commodities Europe
- Attock Cement Pakistan Limited
- Binh Thuan Hamico - Vietnam
- The Treasury - Australian Government
- CNBM International Corporation - China
- Tamil Nadu electricity Board
- Interocean Group of Companies - India
- Planning Commission, India
- TNB Fuel Sdn Bhd - Malaysia
- Aditya Birla Group - India
- Energy Development Corp, Philippines
- Medco Energi Mining Internasional
- Essar Steel Hazira Ltd - India
- Chamber of Mines of South Africa
- Orica Australia Pty. Ltd.
- New Zealand Coal & Carbon
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Kalimantan Lumbung Energi - Indonesia
- Port Waratah Coal Services - Australia
- Bangladesh Power Developement Board
- Manunggal Multi Energi - Indonesia
- Xindia Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Grasim Industreis Ltd - India
- Iligan Light & Power Inc, Philippines
- Antam Resourcindo - Indonesia
- OPG Power Generation Pvt Ltd - India
- SMG Consultants - Indonesia
- Eastern Coal Council - USA
- Vizag Seaport Private Limited - India
- Madhucon Powers Ltd - India
- Global Business Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- ASAPP Information Group - India
- Globalindo Alam Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- Indian Oil Corporation Limited
- Kohat Cement Company Ltd. - Pakistan
- Makarim & Taira - Indonesia
- Timah Investasi Mineral - Indoneisa
- Mercuria Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Star Paper Mills Limited - India
- Ministry of Mines - Canada
- Gujarat Sidhee Cement - India
- Sojitz Corporation - Japan
- Vijayanagar Sugar Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- GVK Power & Infra Limited - India
- Central Java Power - Indonesia
- Eastern Energy - Thailand
- Ministry of Finance - Indonesia
- Kobexindo Tractors - Indoneisa
- Simpson Spence & Young - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- Jindal Steel & Power Ltd - India
- Oldendorff Carriers - Singapore
- Intertek Mineral Services - Indonesia
- Romanian Commodities Exchange
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement PLC, Thailand
- San Jose City I Power Corp, Philippines
- Central Electricity Authority - India
- Gujarat Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Georgia Ports Authority, United States
- Parliament of New Zealand
- Thiess Contractors Indonesia
- European Bulk Services B.V. - Netherlands
- IEA Clean Coal Centre - UK
- Bhoruka Overseas - Indonesia
- Chettinad Cement Corporation Ltd - India
- Meenaskhi Energy Private Limited - India
- Marubeni Corporation - India
- Australian Coal Association
- Parry Sugars Refinery, India
- Tata Chemicals Ltd - India
- ICICI Bank Limited - India
- Altura Mining Limited, Indonesia
- Energy Link Ltd, New Zealand
- Carbofer General Trading SA - India
- Bukit Makmur.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Agrawal Coal Company - India
- Latin American Coal - Colombia
- CIMB Investment Bank - Malaysia
- Sical Logistics Limited - India
- Straits Asia Resources Limited - Singapore
- Pendopo Energi Batubara - Indonesia
- Sakthi Sugars Limited - India
- Therma Luzon, Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- India Bulls Power Limited - India
- Karaikal Port Pvt Ltd - India
- Wilmar Investment Holdings
- Krishnapatnam Port Company Ltd. - India
- Coal and Oil Company - UAE
- Bukit Baiduri Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Sindya Power Generating Company Private Ltd
- Power Finance Corporation Ltd., India
- Metalloyd Limited - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- Semirara Mining Corp, Philippines
- PTC India Limited - India
- Goldman Sachs - Singapore
- GAC Shipping (India) Pvt Ltd
- Rio Tinto Coal - Australia
- Indo Tambangraya Megah - Indonesia
- VISA Power Limited - India
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- Australian Commodity Traders Exchange
- White Energy Company Limited
- Cement Manufacturers Association - India
- Orica Mining Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Posco Energy - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Asmin Koalindo Tuhup - Indonesia
- Trasteel International SA, Italy
- MS Steel International - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Singapore Mercantile Exchange
- Indian Energy Exchange, India
- Deloitte Consulting - India
- Indika Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Coastal Gujarat Power Limited - India
- Heidelberg Cement - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Dalmia Cement Bharat India
- Mintek Dendrill Indonesia
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