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