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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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Monday, 08 November 10
INDONESIAN HBA HAS INCREASED TO $ 95.51 PER TON FOR NOVEMBER LOADING
COALspot.com: The Directorate General of Mineral, Coal and Geothermal of Indonesia has been publishing a monthly coal price reference (HBA) since Fe ...
Sunday, 07 November 10
THE SUPRAMAX INDEX IN THE FAR EAST CONTINUED TO BE UNDER PRESSURE - CAPT. REDDY
COALspot.com: The freight market continued to remain soft and all segments were down by almost about 6 pct.
The BDI and Cape Size index was down ...
Saturday, 06 November 10
DRY BULK MARKET LACKING SUPPORT TO SUSTAIN CURRENT LEVELS, BUT PANAMAX OWNERS ARE MORE FORTUNATE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Posting its fifth straight losing session, the dry bulk market benchmark, the BDI (Baltic Dry Index) was down yesterday by another 1.26% to 2510 poi ...
Friday, 05 November 10
RI COAL EXPORT PROSPECTS STILL BRIGHT - THE JAKARTA POST
The Jakarta Post reported that, Indonesia, already the world’s largest exporter of seaborne thermal coal since 2005, will continue to be a maj ...
Thursday, 04 November 10
CAPE SIZE SENTIMENT FOR THIS WEEK WAS NEGATIVE - FEARNBULK
Handy
The Atlantic markets remain flat and lackluster. High volume of tonnage availabi ...
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- Kepco SPC Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Deloitte Consulting - India
- GVK Power & Infra Limited - India
- Attock Cement Pakistan Limited
- Sical Logistics Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Edison Trading Spa - Italy
- Uttam Galva Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Iligan Light & Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- PTC India Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Thai Mozambique Logistica
- White Energy Company Limited
- Carbofer General Trading SA - India
- Billiton Holdings Pty Ltd - Australia
- Eastern Energy - Thailand
- Bulk Trading Sa - Switzerland
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- The University of Queensland
- Vizag Seaport Private Limited - India
- Directorate Of Revenue Intelligence - India
- Sakthi Sugars Limited - India
- Holcim Trading Pte Ltd - Singapore
- TeaM Sual Corporation - Philippines
- Grasim Industreis Ltd - India
- New Zealand Coal & Carbon
- Straits Asia Resources Limited - Singapore
- Goldman Sachs - Singapore
- The State Trading Corporation of India Ltd
- Tata Chemicals Ltd - India
- Africa Commodities Group - South Africa
- Energy Development Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- CNBM International Corporation - China
- Sinarmas Energy and Mining - Indonesia
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Latin American Coal - Colombia
- Salva Resources Pvt Ltd - India
- Tamil Nadu electricity Board
- Chettinad Cement Corporation Ltd - India
- Wood Mackenzie - Singapore
- Intertek Mineral Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Chamber of Mines of South Africa
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- IEA Clean Coal Centre - UK
- Coal and Oil Company - UAE
- SMG Consultants - Indonesia
- Binh Thuan Hamico - Vietnam
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coalindo Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Price Waterhouse Coopers - Russia
- Manunggal Multi Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Singapore Mercantile Exchange
- Indian Oil Corporation Limited
- Leighton Contractors Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Bangladesh Power Developement Board
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
- Ind-Barath Power Infra Limited - India
- Sojitz Corporation - Japan
- India Bulls Power Limited - India
- Australian Coal Association
- Thiess Contractors Indonesia
- Kideco Jaya Agung - Indonesia
- Oldendorff Carriers - Singapore
- Riau Bara Harum - Indonesia
- Alfred C Toepfer International GmbH - Germany
- South Luzon Thermal Energy Corporation
- Bhatia International Limited - India
- PetroVietnam Power Coal Import and Supply Company
- McConnell Dowell - Australia
- The Treasury - Australian Government
- Bhoruka Overseas - Indonesia
- Therma Luzon, Inc, Philippines
- Planning Commission, India
- International Coal Ventures Pvt Ltd - India
- Mintek Dendrill Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Antam Resourcindo - Indonesia
- Port Waratah Coal Services - Australia
- Meenaskhi Energy Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement - Thailand
- PowerSource Philippines DevCo
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- Ministry of Transport, Egypt
- ICICI Bank Limited - India
- Eastern Coal Council - USA
- Orica Mining Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Indo Tambangraya Megah - Indonesia
- Siam City Cement PLC, Thailand
- Aboitiz Power Corporation - Philippines
- Georgia Ports Authority, United States
- Orica Australia Pty. Ltd.
- MS Steel International - UAE
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- Ministry of Mines - Canada
- Formosa Plastics Group - Taiwan
- Star Paper Mills Limited - India
- Indogreen Group - Indonesia
- Commonwealth Bank - Australia
- Barasentosa Lestari - Indonesia
- Aditya Birla Group - India
- Global Green Power PLC Corporation, Philippines
- Central Electricity Authority - India
- Rio Tinto Coal - Australia
- SMC Global Power, Philippines
- Wilmar Investment Holdings
- Dalmia Cement Bharat India
- Minerals Council of Australia
- Global Coal Blending Company Limited - Australia
- Karaikal Port Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Global Business Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Marubeni Corporation - India
- Makarim & Taira - Indonesia
- San Jose City I Power Corp, Philippines
- London Commodity Brokers - England
- Borneo Indobara - Indonesia
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- Savvy Resources Ltd - HongKong
- Pipit Mutiara Jaya. PT, Indonesia
- Jindal Steel & Power Ltd - India
- Independent Power Producers Association of India
- Ceylon Electricity Board - Sri Lanka
- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- Parliament of New Zealand
- Kobexindo Tractors - Indoneisa
- Ministry of Finance - Indonesia
- Madhucon Powers Ltd - India
- Electricity Authority, New Zealand
- Australian Commodity Traders Exchange
- Pendopo Energi Batubara - Indonesia
- IHS Mccloskey Coal Group - USA
- Kumho Petrochemical, South Korea
- Larsen & Toubro Limited - India
- Trasteel International SA, Italy
- Vedanta Resources Plc - India
- Petrochimia International Co. Ltd.- Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Romanian Commodities Exchange
- Banpu Public Company Limited - Thailand
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- CIMB Investment Bank - Malaysia
- Bukit Baiduri Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Bhushan Steel Limited - India
- Sindya Power Generating Company Private Ltd
- Indonesian Coal Mining Association
- Bukit Makmur.PT - Indonesia
- Medco Energi Mining Internasional
- Essar Steel Hazira Ltd - India
- Merrill Lynch Commodities Europe
- Videocon Industries ltd - India
- Miang Besar Coal Terminal - Indonesia
- Economic Council, Georgia
- Mjunction Services Limited - India
- Cigading International Bulk Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Central Java Power - Indonesia
- Meralco Power Generation, Philippines
- ASAPP Information Group - India
- Standard Chartered Bank - UAE
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- LBH Netherlands Bv - Netherlands
- Indika Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- VISA Power Limited - India
- Posco Energy - South Korea
- Jaiprakash Power Ventures ltd
- Kaltim Prima Coal - Indonesia
- Indian Energy Exchange, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Heidelberg Cement - Germany
- Gujarat Sidhee Cement - India
- Interocean Group of Companies - India
- GMR Energy Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Agrawal Coal Company - India
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