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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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- Bharathi Cement Corporation - India
- Kepco SPC Power Corporation, Philippines
- Posco Energy - South Korea
- Gujarat Sidhee Cement - India
- Sojitz Corporation - Japan
- Makarim & Taira - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Singapore Mercantile Exchange
- Semirara Mining and Power Corporation, Philippines
- Aditya Birla Group - India
- The Treasury - Australian Government
- India Bulls Power Limited - India
- Straits Asia Resources Limited - Singapore
- Thiess Contractors Indonesia
- Power Finance Corporation Ltd., India
- Manunggal Multi Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- Central Electricity Authority - India
- SMG Consultants - Indonesia
- TeaM Sual Corporation - Philippines
- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- Planning Commission, India
- Lanco Infratech Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Economic Council, Georgia
- Kideco Jaya Agung - Indonesia
- Simpson Spence & Young - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- Coalindo Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Ministry of Mines - Canada
- Commonwealth Bank - Australia
- Neyveli Lignite Corporation Ltd, - India
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- Aboitiz Power Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Chamber of Mines of South Africa
- Goldman Sachs - Singapore
- IHS Mccloskey Coal Group - USA
- Electricity Generating Authority of Thailand
- Ambuja Cements Ltd - India
- GMR Energy Limited - India
- Metalloyd Limited - United Kingdom
- Borneo Indobara - Indonesia
- Sarangani Energy Corporation, Philippines
- Independent Power Producers Association of India
- Globalindo Alam Lestari - Indonesia
- Ministry of Finance - Indonesia
- Indo Tambangraya Megah - Indonesia
- Cement Manufacturers Association - India
- Altura Mining Limited, Indonesia
- Romanian Commodities Exchange
- Attock Cement Pakistan Limited
- Australian Commodity Traders Exchange
- CNBM International Corporation - China
- Pendopo Energi Batubara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Chettinad Cement Corporation Ltd - India
- Indian Oil Corporation Limited
- Timah Investasi Mineral - Indoneisa
- Eastern Energy - Thailand
- Mintek Dendrill Indonesia
- Xindia Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- Energy Development Corp, Philippines
- Meralco Power Generation, Philippines
- SMC Global Power, Philippines
- Africa Commodities Group - South Africa
- Kumho Petrochemical, South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Baramulti Group, Indonesia
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Intertek Mineral Services - Indonesia
- PowerSource Philippines DevCo
- Kobexindo Tractors - Indoneisa
- Indogreen Group - Indonesia
- Bukit Baiduri Energy - Indonesia
- Minerals Council of Australia
- Parliament of New Zealand
- Malabar Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- ICICI Bank Limited - India
- Global Coal Blending Company Limited - Australia
- Samtan Co., Ltd - South Korea
- Electricity Authority, New Zealand
- Price Waterhouse Coopers - Russia
- European Bulk Services B.V. - Netherlands
- Heidelberg Cement - Germany
- Merrill Lynch Commodities Europe
- Jaiprakash Power Ventures ltd
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- London Commodity Brokers - England
- Maharashtra Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Leighton Contractors Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- Renaissance Capital - South Africa
- White Energy Company Limited
- Directorate Of Revenue Intelligence - India
- Parry Sugars Refinery, India
- Bangladesh Power Developement Board
- Savvy Resources Ltd - HongKong
- IEA Clean Coal Centre - UK
- Energy Link Ltd, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Makmur.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Carbofer General Trading SA - India
- Central Java Power - Indonesia
- Mercator Lines Limited - India
- Tamil Nadu electricity Board
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- GAC Shipping (India) Pvt Ltd
- SN Aboitiz Power Inc, Philippines
- VISA Power Limited - India
- Karaikal Port Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- South Luzon Thermal Energy Corporation
- LBH Netherlands Bv - Netherlands
- Mercuria Energy - Indonesia
- Latin American Coal - Colombia
- Salva Resources Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- The University of Queensland
- Riau Bara Harum - Indonesia
- Anglo American - United Kingdom
- Global Business Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- The State Trading Corporation of India Ltd
- Asmin Koalindo Tuhup - Indonesia
- International Coal Ventures Pvt Ltd - India
- Videocon Industries ltd - India
- Semirara Mining Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Medco Energi Mining Internasional
- PetroVietnam Power Coal Import and Supply Company
- Global Green Power PLC Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Alfred C Toepfer International GmbH - Germany
- GVK Power & Infra Limited - India
- Petron Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Bulk Trading Sa - Switzerland
- Sindya Power Generating Company Private Ltd
- Interocean Group of Companies - India
- Banpu Public Company Limited - Thailand
- Cigading International Bulk Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- PTC India Limited - India
- Port Waratah Coal Services - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Trasteel International SA, Italy
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Transport, Egypt
- Bhatia International Limited - India
- Meenaskhi Energy Private Limited - India
- Bhoruka Overseas - Indonesia
- Wilmar Investment Holdings
- Indian Energy Exchange, India
- Australian Coal Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rio Tinto Coal - Australia
- CIMB Investment Bank - Malaysia
- Sakthi Sugars Limited - India
- Dalmia Cement Bharat India
- Therma Luzon, Inc, Philippines
- McConnell Dowell - Australia
- ASAPP Information Group - India
- Siam City Cement PLC, Thailand
- Mjunction Services Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Deloitte Consulting - India
- Orica Australia Pty. Ltd.
- Edison Trading Spa - Italy
- Grasim Industreis Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Eastern Coal Council - USA
- Standard Chartered Bank - UAE
- Vizag Seaport Private Limited - India
- MS Steel International - UAE
- Directorate General of MIneral and Coal - Indonesia
- Wood Mackenzie - Singapore
- Krishnapatnam Port Company Ltd. - India
- Maheswari Brothers Coal Limited - India
- Siam City Cement - Thailand
- Antam Resourcindo - Indonesia
- Ind-Barath Power Infra Limited - India
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- San Jose City I Power Corp, Philippines
- Oldendorff Carriers - Singapore
- AsiaOL BioFuels Corp., Philippines
- Marubeni Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- Uttam Galva Steels Limited - India
- Orica Mining Services - Indonesia
- Kartika Selabumi Mining - Indonesia
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