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