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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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Saturday, 08 August 09
TWO / THREE YEAR CHARTER RATES FOR SUPRAMAX IS AROUND US$ 15,000-16,000 PER DAY - CAPT. REDDY
COALspot.com (Singapore): The dry bulk market tumbled this week and the BDI dropped by almost 17% and closed at 2,772 points.
The cape and panam ...
Saturday, 08 August 09
SULTAN MINING SIGNS P8-BILLION, 10-YEAR COAL-SUPPLY CONTRACT WITH KEPCO POWER CORP.
COAL developer Sultan Mining and Energy Development Corp. (SMEDC) reported on Thursday that its subsidiary MG Mining and Energy Corp. signed an P8-b ...
Friday, 07 August 09
NEED TO HIKE DOMESTIC PRICES - COAL INDIA
WSJ reported that, The chairman of Coal India Ltd., the country's biggest coal producer, Friday said there was a need to hike domestic coal prices ...
Friday, 07 August 09
INDONESIA COAL NEWS UPDATES
PTBA to Produce 13 Million Tons
President Director of Tambang Batubara Bukit Asam (PTBA), Sukrisno has estimated coal production of the company th ...
Friday, 07 August 09
BALTIC DRY INDEX HAS WORST WEEK SINCE OCTOBER AS DEMAND SLOWS
Bloomberg reported that, The Baltic Dry Index, a measure of shipping costs for commodities, had its worst week since October as Chinese demand for s ...
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- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Directorate Of Revenue Intelligence - India
- International Coal Ventures Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Billiton Holdings Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Attock Cement Pakistan Limited
- South Luzon Thermal Energy Corporation
- Ambuja Cements Ltd - India
- Edison Trading Spa - Italy
- Tamil Nadu electricity Board
- Cement Manufacturers Association - India
- Makarim & Taira - Indonesia
- Deloitte Consulting - India
- Indonesian Coal Mining Association
- Coastal Gujarat Power Limited - India
- Grasim Industreis Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Anglo American - United Kingdom
- Rio Tinto Coal - Australia
- Indo Tambangraya Megah - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Iligan Light & Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Larsen & Toubro Limited - India
- Sakthi Sugars Limited - India
- Coalindo Energy - Indonesia
- Tata Chemicals Ltd - India
- New Zealand Coal & Carbon
- Singapore Mercantile Exchange
- Indian Energy Exchange, India
- Maharashtra Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- Africa Commodities Group - South Africa
- Maheswari Brothers Coal Limited - India
- Latin American Coal - Colombia
- Pendopo Energi Batubara - Indonesia
- Posco Energy - South Korea
- Trasteel International SA, Italy
- PNOC Exploration Corporation - Philippines
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- Australian Coal Association
- Bayan Resources Tbk. - Indonesia
- Bhoruka Overseas - Indonesia
- Kapuas Tunggal Persada - Indonesia
- The State Trading Corporation of India Ltd
- Romanian Commodities Exchange
- San Jose City I Power Corp, Philippines
- Chamber of Mines of South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Transport, Egypt
- Gujarat Sidhee Cement - India
- Leighton Contractors Pty Ltd - Australia
- Indogreen Group - Indonesia
- Karaikal Port Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Electricity Authority, New Zealand
- Intertek Mineral Services - Indonesia
- Salva Resources Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Central Java Power - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- ICICI Bank Limited - India
- Xindia Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement - Thailand
- Sree Jayajothi Cements Limited - India
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Ind-Barath Power Infra Limited - India
- Parry Sugars Refinery, India
- LBH Netherlands Bv - Netherlands
- CNBM International Corporation - China
- Mintek Dendrill Indonesia
- Mercator Lines Limited - India
- Kideco Jaya Agung - Indonesia
- Dalmia Cement Bharat India
- Bangladesh Power Developement Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meenaskhi Energy Private Limited - India
- European Bulk Services B.V. - Netherlands
- SMG Consultants - Indonesia
- Straits Asia Resources Limited - Singapore
- Medco Energi Mining Internasional
- Global Coal Blending Company Limited - Australia
- Oldendorff Carriers - Singapore
- Sical Logistics Limited - India
- Wood Mackenzie - Singapore
- London Commodity Brokers - England
- Central Electricity Authority - India
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Ministry of Mines - Canada
- Lanco Infratech Ltd - India
- Global Business Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Jindal Steel & Power Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thiess Contractors Indonesia
- Binh Thuan Hamico - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- PowerSource Philippines DevCo
- Vedanta Resources Plc - India
- SN Aboitiz Power Inc, Philippines
- VISA Power Limited - India
- Essar Steel Hazira Ltd - India
- Commonwealth Bank - Australia
- Bhushan Steel Limited - India
- Mercuria Energy - Indonesia
- Parliament of New Zealand
- Toyota Tsusho Corporation, Japan
- Eastern Energy - Thailand
- GVK Power & Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- GMR Energy Limited - India
- Bhatia International Limited - India
- Holcim Trading Pte Ltd - Singapore
- Ministry of Finance - Indonesia
- Eastern Coal Council - USA
- MS Steel International - UAE
- PTC India Limited - India
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- The University of Queensland
- Cigading International Bulk Terminal - Indonesia
- Heidelberg Cement - Germany
- Altura Mining Limited, Indonesia
- Star Paper Mills Limited - India
- Wilmar Investment Holdings
- Sojitz Corporation - Japan
- Videocon Industries ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- ASAPP Information Group - India
- Miang Besar Coal Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Renaissance Capital - South Africa
- Marubeni Corporation - India
- Coal and Oil Company - UAE
- Merrill Lynch Commodities Europe
- Samtan Co., Ltd - South Korea
- Madhucon Powers Ltd - India
- Economic Council, Georgia
- Global Green Power PLC Corporation, Philippines
- SMC Global Power, Philippines
- Aditya Birla Group - India
- Electricity Generating Authority of Thailand
- India Bulls Power Limited - India
- Petron Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Chettinad Cement Corporation Ltd - India
- Metalloyd Limited - United Kingdom
- Therma Luzon, Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- White Energy Company Limited
- Kobexindo Tractors - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Minerals Council of Australia
- Siam City Cement PLC, Thailand
- Barasentosa Lestari - Indonesia
- Energy Link Ltd, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Kumho Petrochemical, South Korea
- OPG Power Generation Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Savvy Resources Ltd - HongKong
- Interocean Group of Companies - India
- Alfred C Toepfer International GmbH - Germany
- Goldman Sachs - Singapore
- Vizag Seaport Private Limited - India
- Australian Commodity Traders Exchange
- Price Waterhouse Coopers - Russia
- Riau Bara Harum - Indonesia
- Timah Investasi Mineral - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- CIMB Investment Bank - Malaysia
- Orica Mining Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Meralco Power Generation, Philippines
- Bukit Makmur.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Indika Energy - Indonesia
- The Treasury - Australian Government
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- Banpu Public Company Limited - Thailand
- Carbofer General Trading SA - India
- Indian Oil Corporation Limited
- Jaiprakash Power Ventures ltd
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Thai Mozambique Logistica
- Standard Chartered Bank - UAE
- Mjunction Services Limited - India
- Kepco SPC Power Corporation, Philippines
- Independent Power Producers Association of India
- Agrawal Coal Company - India
- McConnell Dowell - Australia
- Sindya Power Generating Company Private Ltd
- IEA Clean Coal Centre - UK
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bulk Trading Sa - Switzerland
- Planning Commission, India
- Antam Resourcindo - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Aboitiz Power Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Kaltim Prima Coal - Indonesia
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