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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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Friday, 07 January 11
DRY BULK MARKET ON A FREEFALL, AS THE NEW YEAR EARLY DAYS DONT BRING MANY CHEERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market is facing its worst slump in more than two years, falling by 4.75% yesterday to reach 1,544 points, on top of an additional 4.2% ...
Thursday, 06 January 11
OVERSEAS & GENERAL SIGNS AGREEMENT TO EXPAND FOOTPRINT ON COAL LEASE IN INDONESIA - PROACTIVE INVESTORS
Proactive Investors reported that, Overseas & General (ASX: OGL) has entered into a joint operating agreement on the Jambi Coal Lease in Sumatra ...
Thursday, 06 January 11
BANPU EXPECTS ROSY 2011 AS COAL PRICES SKYROCKET - BANGKOK POST
Bangkok Post reported that, Banpu Plc, Asean's largest coal miner, expects minimal impact from the production stoppage at its Daning mine in China ...
Thursday, 06 January 11
COKING COAL CONTRACT PRICE MAY RISE 33% ON AUSTRALIAN FLOODS - BLOOMBERG
Bloomberg reported that, Steelmakers in Asia may be forced to pay as much as 33 percent more for hard coking coal after the worst floods in 50 years ...
Wednesday, 05 January 11
HIGHER COAL PRICES LIFT UP COAL STOCKS
Thermal coal price this month has gone up 5.63% to US$127.70 per ton today from mid last month at US$120.89 per ton.
Thermal coal price for next ...
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- Borneo Indobara - Indonesia
- Kobexindo Tractors - Indoneisa
- LBH Netherlands Bv - Netherlands
- Aditya Birla Group - India
- Xindia Steels Limited - India
- Coastal Gujarat Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Kartika Selabumi Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- The Treasury - Australian Government
- Parry Sugars Refinery, India
- Savvy Resources Ltd - HongKong
- Altura Mining Limited, Indonesia
- Ambuja Cements Ltd - India
- Romanian Commodities Exchange
- Vizag Seaport Private Limited - India
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- Gujarat Sidhee Cement - India
- IHS Mccloskey Coal Group - USA
- Metalloyd Limited - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Formosa Plastics Group - Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- ICICI Bank Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Renaissance Capital - South Africa
- Chettinad Cement Corporation Ltd - India
- Ministry of Mines - Canada
- Global Green Power PLC Corporation, Philippines
- Lanco Infratech Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMC Global Power, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bhatia International Limited - India
- Jindal Steel & Power Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Neyveli Lignite Corporation Ltd, - India
- The University of Queensland
- Bharathi Cement Corporation - India
- Coalindo Energy - Indonesia
- Wood Mackenzie - Singapore
- Jaiprakash Power Ventures ltd
- Independent Power Producers Association of India
- PetroVietnam Power Coal Import and Supply Company
- Meralco Power Generation, Philippines
- Central Electricity Authority - India
- Riau Bara Harum - Indonesia
- Siam City Cement - Thailand
- Petron Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Bahari Cakrawala Sebuku - Indonesia
- CNBM International Corporation - China
- The State Trading Corporation of India Ltd
- SMG Consultants - Indonesia
- Merrill Lynch Commodities Europe
- Star Paper Mills Limited - India
- Electricity Authority, New Zealand
- Indogreen Group - Indonesia
- Bulk Trading Sa - Switzerland
- Videocon Industries ltd - India
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- Aboitiz Power Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Port Waratah Coal Services - Australia
- Cement Manufacturers Association - India
- Essar Steel Hazira Ltd - India
- Bukit Baiduri Energy - Indonesia
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- Attock Cement Pakistan Limited
- Leighton Contractors Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Indian Oil Corporation Limited
- Gujarat Mineral Development Corp Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Singapore Mercantile Exchange
- Timah Investasi Mineral - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Bangladesh Power Developement Board
- Directorate Of Revenue Intelligence - India
- Eastern Coal Council - USA
- SN Aboitiz Power Inc, Philippines
- Carbofer General Trading SA - India
- ASAPP Information Group - India
- Orica Australia Pty. Ltd.
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Goldman Sachs - Singapore
- Thiess Contractors Indonesia
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- Coal and Oil Company - UAE
- Commonwealth Bank - Australia
- Central Java Power - Indonesia
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Georgia Ports Authority, United States
- Uttam Galva Steels Limited - India
- GVK Power & Infra Limited - India
- Malabar Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Anglo American - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Deloitte Consulting - India
- Mercator Lines Limited - India
- Miang Besar Coal Terminal - Indonesia
- Madhucon Powers Ltd - India
- Sical Logistics Limited - India
- VISA Power Limited - India
- Mercuria Energy - Indonesia
- Electricity Generating Authority of Thailand
- Meenaskhi Energy Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Agrawal Coal Company - India
- Dalmia Cement Bharat India
- Asmin Koalindo Tuhup - Indonesia
- Eastern Energy - Thailand
- Parliament of New Zealand
- Semirara Mining Corp, Philippines
- Mintek Dendrill Indonesia
- Tamil Nadu electricity Board
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Maharashtra Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Sree Jayajothi Cements Limited - India
- Heidelberg Cement - Germany
- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- McConnell Dowell - Australia
- Straits Asia Resources Limited - Singapore
- San Jose City I Power Corp, Philippines
- Orica Mining Services - Indonesia
- Banpu Public Company Limited - Thailand
- Antam Resourcindo - Indonesia
- MS Steel International - UAE
- GAC Shipping (India) Pvt Ltd
- Ceylon Electricity Board - Sri Lanka
- Global Business Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Sojitz Corporation - Japan
- PNOC Exploration Corporation - Philippines
- Tata Chemicals Ltd - India
- Binh Thuan Hamico - Vietnam
- London Commodity Brokers - England
- IEA Clean Coal Centre - UK
- Global Coal Blending Company Limited - Australia
- Bukit Makmur.PT - Indonesia
- Siam City Cement PLC, Thailand
- Indian Energy Exchange, India
- Posco Energy - South Korea
- Interocean Group of Companies - India
- Makarim & Taira - Indonesia
- Barasentosa Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Kapuas Tunggal Persada - Indonesia
- Chamber of Mines of South Africa
- Rio Tinto Coal - Australia
- Kumho Petrochemical, South Korea
- PTC India Limited - India
- Edison Trading Spa - Italy
- Minerals Council of Australia
- Intertek Mineral Services - Indonesia
- Wilmar Investment Holdings
- Australian Commodity Traders Exchange
- Oldendorff Carriers - Singapore
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Bhushan Steel Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Marubeni Corporation - India
- Indika Energy - Indonesia
- India Bulls Power Limited - India
- Toyota Tsusho Corporation, Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Larsen & Toubro Limited - India
- Standard Chartered Bank - UAE
- Manunggal Multi Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Latin American Coal - Colombia
- Kohat Cement Company Ltd. - Pakistan
- Economic Council, Georgia
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- Semirara Mining and Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Grasim Industreis Ltd - India
- South Luzon Thermal Energy Corporation
- White Energy Company Limited
- Vedanta Resources Plc - India
- Ministry of Finance - Indonesia
- Karaikal Port Pvt Ltd - India
- Ministry of Transport, Egypt
- Sinarmas Energy and Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Planning Commission, India
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