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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, 26 October 10
DRY BULK MARKET TO KEEP RISING THIS WEEK ON STRONG CHINESE IRON ORE AND THERMAL COAL DEMAND - HELLENIC SHIPPING
Overcapacitated or not, the dry bulk market keeps its positive momentum as we move forward this week, with the Baltic Dry Index (BDI) rising by 0.77 ...
Monday, 25 October 10
TWO CHINESE COMPANIES INK DEAL TO TAP AUSSIE COAL RESERVES
China Daily reportd that, two Chinese coal firms have teamed up to explore and develop coal resources in an area in Australia that has forecast rese ...
Monday, 25 October 10
DRY BULK MARKET STILL HEAVILY DEPENDENT ON CHINA, POSTS SMALL WEEKLY LOSS OF 1.27% - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With every twitch and turn from China’s metals industry, the dry bulk market is disproportionally affected, as evidenced by the course of the ...
Sunday, 24 October 10
SUPRAMAX VESSELS BEING FIXED AROUND $ 15 K PER DAY DELIVERY N. CHINA FOR TRIP VIA INDONESIA TO INDIA - VISTAAR SHIPPING
COALspot.com: The freight market this week remained almost at same levels with not much change. However the Far East/SE Asia market was quite soft w ...
Saturday, 23 October 10
HEAVY RAINS NO DAMPENER FOR 2010 COAL OUTPUT TARGET, MINISTRY SAYS - THE JAKARTA GLOBE
The Jakarta Globe reported that, National coal production would likely meet the target set by the Energy Ministry despite unusually heavy rain this ...
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- Kaltim Prima Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bhatia International Limited - India
- ASAPP Information Group - India
- Bangladesh Power Developement Board
- Global Green Power PLC Corporation, Philippines
- Altura Mining Limited, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Trasteel International SA, Italy
- Essar Steel Hazira Ltd - India
- Georgia Ports Authority, United States
- Economic Council, Georgia
- Indian Energy Exchange, India
- Heidelberg Cement - Germany
- Independent Power Producers Association of India
- Straits Asia Resources Limited - Singapore
- Energy Development Corp, Philippines
- Salva Resources Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Edison Trading Spa - Italy
- South Luzon Thermal Energy Corporation
- Sarangani Energy Corporation, Philippines
- Sakthi Sugars Limited - India
- Siam City Cement PLC, Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GMR Energy Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Globalindo Alam Lestari - Indonesia
- Wood Mackenzie - Singapore
- Jindal Steel & Power Ltd - India
- Bhoruka Overseas - Indonesia
- Metalloyd Limited - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Medco Energi Mining Internasional
- Power Finance Corporation Ltd., India
- Jorong Barutama Greston.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Madhucon Powers Ltd - India
- Meenaskhi Energy Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Marubeni Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- Pendopo Energi Batubara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mintek Dendrill Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Rashtriya Ispat Nigam Limited - India
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- Agrawal Coal Company - India
- Holcim Trading Pte Ltd - Singapore
- Sical Logistics Limited - India
- Planning Commission, India
- Larsen & Toubro Limited - India
- Riau Bara Harum - Indonesia
- Sindya Power Generating Company Private Ltd
- Australian Coal Association
- Manunggal Multi Energi - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- White Energy Company Limited
- Indian Oil Corporation Limited
- Electricity Authority, New Zealand
- Borneo Indobara - Indonesia
- The University of Queensland
- Rio Tinto Coal - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Parry Sugars Refinery, India
- Maharashtra Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- Central Java Power - Indonesia
- SN Aboitiz Power Inc, Philippines
- Grasim Industreis Ltd - India
- Port Waratah Coal Services - Australia
- New Zealand Coal & Carbon
- Africa Commodities Group - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Attock Cement Pakistan Limited
- PTC India Limited - India
- Commonwealth Bank - Australia
- Malabar Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Eastern Coal Council - USA
- Orica Mining Services - Indonesia
- Sree Jayajothi Cements Limited - India
- ICICI Bank Limited - India
- Lanco Infratech Ltd - India
- Global Business Power Corporation, Philippines
- Dalmia Cement Bharat India
- Karbindo Abesyapradhi - Indoneisa
- SMG Consultants - Indonesia
- Meralco Power Generation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- Maheswari Brothers Coal Limited - India
- Semirara Mining and Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Parliament of New Zealand
- Antam Resourcindo - Indonesia
- Indogreen Group - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- MS Steel International - UAE
- Cigading International Bulk Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Jaiprakash Power Ventures ltd
- Kepco SPC Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- GAC Shipping (India) Pvt Ltd
- VISA Power Limited - India
- Ministry of Finance - Indonesia
- Bayan Resources Tbk. - Indonesia
- Central Electricity Authority - India
- Tamil Nadu electricity Board
- Uttam Galva Steels Limited - India
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- Videocon Industries ltd - India
- Ind-Barath Power Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- European Bulk Services B.V. - Netherlands
- Romanian Commodities Exchange
- Wilmar Investment Holdings
- Neyveli Lignite Corporation Ltd, - India
- Kideco Jaya Agung - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bharathi Cement Corporation - India
- Standard Chartered Bank - UAE
- PNOC Exploration Corporation - Philippines
- Bhushan Steel Limited - India
- India Bulls Power Limited - India
- CNBM International Corporation - China
- Billiton Holdings Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- Posco Energy - South Korea
- Indo Tambangraya Megah - Indonesia
- Orica Australia Pty. Ltd.
- Directorate General of MIneral and Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Anglo American - United Kingdom
- McConnell Dowell - Australia
- Thiess Contractors Indonesia
- Mercator Lines Limited - India
- GVK Power & Infra Limited - India
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- Samtan Co., Ltd - South Korea
- Siam City Cement - Thailand
- Deloitte Consulting - India
- Energy Link Ltd, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indika Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Makarim & Taira - Indonesia
- Xindia Steels Limited - India
- IHS Mccloskey Coal Group - USA
- PowerSource Philippines DevCo
- Coastal Gujarat Power Limited - India
- Indonesian Coal Mining Association
- Karaikal Port Pvt Ltd - India
- Thai Mozambique Logistica
- San Jose City I Power Corp, Philippines
- Gujarat Sidhee Cement - India
- Tata Chemicals Ltd - India
- Star Paper Mills Limited - India
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
- Minerals Council of Australia
- Interocean Group of Companies - India
- Singapore Mercantile Exchange
- Formosa Plastics Group - Taiwan
- Merrill Lynch Commodities Europe
- Offshore Bulk Terminal Pte Ltd, Singapore
- Timah Investasi Mineral - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Coal and Oil Company - UAE
- Eastern Energy - Thailand
- Aboitiz Power Corporation - Philippines
- The Treasury - Australian Government
- Ministry of Transport, Egypt
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- Price Waterhouse Coopers - Russia
- Kumho Petrochemical, South Korea
- Barasentosa Lestari - Indonesia
- Petron Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Oldendorff Carriers - Singapore
- Semirara Mining Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Ambuja Cements Ltd - India
- Coalindo Energy - Indonesia
- Latin American Coal - Colombia
- Carbofer General Trading SA - India
- Vizag Seaport Private Limited - India
- Bukit Baiduri Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- London Commodity Brokers - England
- Intertek Mineral Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Binh Thuan Hamico - Vietnam
- Ministry of Mines - Canada
- Bukit Asam (Persero) Tbk - Indonesia
- Baramulti Group, Indonesia
- Banpu Public Company Limited - Thailand
- Renaissance Capital - South Africa
- Chettinad Cement Corporation Ltd - India
- Gujarat Electricity Regulatory Commission - India
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