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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, 24 March 11
DRY BULK MARKET RISES, CAPESIZES GAIN BUT REMAIN LOW EARNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market posted modest gains on Wednesday, with the Baltic Dry Index rising to 1,565 points, up by 1.43 percent on the day, led by gains ...
Wednesday, 23 March 11
INDIAS TNPL RECEIVED 1.120 MMTS OF COAL AGAINST ITS 160K MT INQUIRY
COALspot.com - Tamil Nadu Newsprint and Papers Ltd. has closed its inquiry today.
Seven Indian coal traders have submitted price bid to sup ...
Tuesday, 22 March 11
MONNET ISPAT & ENERGY LIMITED ACQUIRES INDONESIAN COAL COMPANY THROUGH ITS SUBSIDIARY MONNET GLOBAL LIMITED
Monnet Global Limited (MGL) acquires PT Sarwa Sembada Karya Bumi, Sumatra & on part exploration the reserves of 65 million tonne on Thermal Coal ...
Tuesday, 22 March 11
RI COAL EXPORTS TO JAPAN MAY BE DIVERTED TO OTHER COUNTRIES - THE JAKARTA POST
The Jakarta Post reported that, Indonesia’s coal exports to Japan will likely be diverted to other countries for several months after the rece ...
Tuesday, 22 March 11
KRISHNAPATNAM PORT SETS ALL INDIA RECORD FOR COAL DISCHARGING
COALspot.com - "Krishnapatnam Port has set an all India record for discharging 71,587 tons of steam coal in just 24 hrs using the conventional ...
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- Neyveli Lignite Corporation Ltd, - India
- Mjunction Services Limited - India
- Australian Coal Association
- Chamber of Mines of South Africa
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- Coal and Oil Company - UAE
- Jaiprakash Power Ventures ltd
- San Jose City I Power Corp, Philippines
- Meralco Power Generation, Philippines
- Lanco Infratech Ltd - India
- Siam City Cement PLC, Thailand
- TeaM Sual Corporation - Philippines
- Grasim Industreis Ltd - India
- Dalmia Cement Bharat India
- Gujarat Sidhee Cement - India
- Electricity Generating Authority of Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement - Thailand
- Vedanta Resources Plc - India
- New Zealand Coal & Carbon
- Bukit Makmur.PT - Indonesia
- Oldendorff Carriers - Singapore
- Pendopo Energi Batubara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Orica Australia Pty. Ltd.
- Madhucon Powers Ltd - India
- Deloitte Consulting - India
- Parry Sugars Refinery, India
- Petron Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Bhatia International Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Central Electricity Authority - India
- Kobexindo Tractors - Indoneisa
- Bangladesh Power Developement Board
- Riau Bara Harum - Indonesia
- Essar Steel Hazira Ltd - India
- LBH Netherlands Bv - Netherlands
- IHS Mccloskey Coal Group - USA
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- SMC Global Power, Philippines
- Interocean Group of Companies - India
- MS Steel International - UAE
- Straits Asia Resources Limited - Singapore
- McConnell Dowell - Australia
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- Global Green Power PLC Corporation, Philippines
- Star Paper Mills Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Power Finance Corporation Ltd., India
- Attock Cement Pakistan Limited
- Merrill Lynch Commodities Europe
- Larsen & Toubro Limited - India
- Heidelberg Cement - Germany
- Aboitiz Power Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Carbofer General Trading SA - India
- ICICI Bank Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Vizag Seaport Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Kideco Jaya Agung - Indonesia
- Eastern Energy - Thailand
- White Energy Company Limited
- Formosa Plastics Group - Taiwan
- Bharathi Cement Corporation - India
- Toyota Tsusho Corporation, Japan
- Indian Energy Exchange, India
- Ambuja Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Central Java Power - Indonesia
- Videocon Industries ltd - India
- Posco Energy - South Korea
- Jindal Steel & Power Ltd - India
- Antam Resourcindo - Indonesia
- Makarim & Taira - Indonesia
- Manunggal Multi Energi - Indonesia
- Agrawal Coal Company - India
- Renaissance Capital - South Africa
- Krishnapatnam Port Company Ltd. - India
- Indo Tambangraya Megah - Indonesia
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Electricity Authority, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Sical Logistics Limited - India
- Coastal Gujarat Power Limited - India
- Timah Investasi Mineral - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Kumho Petrochemical, South Korea
- European Bulk Services B.V. - Netherlands
- Rio Tinto Coal - Australia
- GMR Energy Limited - India
- Rashtriya Ispat Nigam Limited - India
- CIMB Investment Bank - Malaysia
- Ministry of Finance - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Australian Commodity Traders Exchange
- IEA Clean Coal Centre - UK
- Thiess Contractors Indonesia
- PNOC Exploration Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Ministry of Mines - Canada
- Mintek Dendrill Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Mercator Lines Limited - India
- Tata Chemicals Ltd - India
- SN Aboitiz Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Kartika Selabumi Mining - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Bhushan Steel Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Romanian Commodities Exchange
- Karaikal Port Pvt Ltd - India
- Trasteel International SA, Italy
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Standard Chartered Bank - UAE
- Planning Commission, India
- Energy Development Corp, Philippines
- Wood Mackenzie - Singapore
- Eastern Coal Council - USA
- CNBM International Corporation - China
- Uttam Galva Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Aditya Birla Group - India
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- Parliament of New Zealand
- VISA Power Limited - India
- Indika Energy - Indonesia
- Singapore Mercantile Exchange
- GVK Power & Infra Limited - India
- Energy Link Ltd, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Medco Energi Mining Internasional
- Binh Thuan Hamico - Vietnam
- The Treasury - Australian Government
- Samtan Co., Ltd - South Korea
- PTC India Limited - India
- Wilmar Investment Holdings
- The State Trading Corporation of India Ltd
- Global Coal Blending Company Limited - Australia
- TNB Fuel Sdn Bhd - Malaysia
- The University of Queensland
- Tamil Nadu electricity Board
- Iligan Light & Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Maheswari Brothers Coal Limited - India
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- ASAPP Information Group - India
- Baramulti Group, Indonesia
- Anglo American - United Kingdom
- SMG Consultants - Indonesia
- Globalindo Alam Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Savvy Resources Ltd - HongKong
- Altura Mining Limited, Indonesia
- Marubeni Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Economic Council, Georgia
- Xindia Steels Limited - India
- Indian Oil Corporation Limited
- Semirara Mining Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Kohat Cement Company Ltd. - Pakistan
- Kepco SPC Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sakthi Sugars Limited - India
- Africa Commodities Group - South Africa
- India Bulls Power Limited - India
- Orica Mining Services - Indonesia
- Intertek Mineral Services - Indonesia
- Thai Mozambique Logistica
- Borneo Indobara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- South Luzon Thermal Energy Corporation
- Port Waratah Coal Services - Australia
- Latin American Coal - Colombia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jorong Barutama Greston.PT - Indonesia
- London Commodity Brokers - England
- Global Business Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Kapuas Tunggal Persada - Indonesia
- PowerSource Philippines DevCo
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