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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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Sunday, 15 September 19
SUPRAMAX / ULTRAMAX: MORE STEMS WERE NOTICED GOING TO VIETNAM FROM INDONESIA - BALTIC BRIEFING
Capesize
Overall it was a negative week for the Capesize market, with many routes losing ground. A limited amount of time charter appeare ...
Wednesday, 11 September 19
THE INDONESIAN COAL PRICE REFERENCE FELL HEAVILY IN SEPTEMBER
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Wednesday, 11 September 19
SHIPPING MARKET INSIGHT - INTERMODAL
We are going through one of the rare instances where we see optimism building in the dry bulk industry and, as the momentum is still going, the bel ...
Monday, 09 September 19
INDIAN COMPANIES READY TO INVEST IN DEVELOPMENT OF NEW COAL DEPOSITS IN RUSSIA'S YAKUTIA - TASS
Indian metallurgical companies, which received trial batches of coal from Kolmar mining company, are satisfied with the quality of the products and ...
Monday, 09 September 19
COLOMBIA COAL OUTPUT DOWN YEAR-ON-YEAR IN 2ND QUARTER - REUTERS
Colombia, the world’s fifth-largest exporter of coal, produced 18.9 million tonnes of the fuel in the second quarter, down 4.5% from the same ...
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- Meenaskhi Energy Private Limited - India
- Vizag Seaport Private Limited - India
- Makarim & Taira - Indonesia
- Lanco Infratech Ltd - India
- Africa Commodities Group - South Africa
- MS Steel International - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Bhoruka Overseas - Indonesia
- Siam City Cement PLC, Thailand
- Semirara Mining and Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- Bangladesh Power Developement Board
- VISA Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- Latin American Coal - Colombia
- Energy Development Corp, Philippines
- Trasteel International SA, Italy
- Salva Resources Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Siam City Cement - Thailand
- Australian Commodity Traders Exchange
- Bayan Resources Tbk. - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Renaissance Capital - South Africa
- Minerals Council of Australia
- London Commodity Brokers - England
- Madhucon Powers Ltd - India
- Goldman Sachs - Singapore
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Indian Energy Exchange, India
- Sree Jayajothi Cements Limited - India
- Interocean Group of Companies - India
- Neyveli Lignite Corporation Ltd, - India
- Thiess Contractors Indonesia
- Bharathi Cement Corporation - India
- McConnell Dowell - Australia
- IHS Mccloskey Coal Group - USA
- Simpson Spence & Young - Indonesia
- Sojitz Corporation - Japan
- Sindya Power Generating Company Private Ltd
- Parliament of New Zealand
- Savvy Resources Ltd - HongKong
- CNBM International Corporation - China
- Economic Council, Georgia
- Coalindo Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Tamil Nadu electricity Board
- Ceylon Electricity Board - Sri Lanka
- Indo Tambangraya Megah - Indonesia
- Star Paper Mills Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Alfred C Toepfer International GmbH - Germany
- TeaM Sual Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Chettinad Cement Corporation Ltd - India
- Essar Steel Hazira Ltd - India
- Independent Power Producers Association of India
- Sakthi Sugars Limited - India
- Merrill Lynch Commodities Europe
- Manunggal Multi Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Indian Oil Corporation Limited
- Tata Chemicals Ltd - India
- Anglo American - United Kingdom
- Mercator Lines Limited - India
- Metalloyd Limited - United Kingdom
- Wood Mackenzie - Singapore
- Medco Energi Mining Internasional
- Iligan Light & Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Wilmar Investment Holdings
- Sarangani Energy Corporation, Philippines
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- Global Green Power PLC Corporation, Philippines
- White Energy Company Limited
- CIMB Investment Bank - Malaysia
- TNB Fuel Sdn Bhd - Malaysia
- Marubeni Corporation - India
- Global Coal Blending Company Limited - Australia
- Jorong Barutama Greston.PT - Indonesia
- Singapore Mercantile Exchange
- Borneo Indobara - Indonesia
- Eastern Coal Council - USA
- Directorate General of MIneral and Coal - Indonesia
- Indogreen Group - Indonesia
- Ind-Barath Power Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Baramulti Group, Indonesia
- The Treasury - Australian Government
- Ministry of Transport, Egypt
- San Jose City I Power Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Bukit Baiduri Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- Petron Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Electricity Authority, New Zealand
- ICICI Bank Limited - India
- Heidelberg Cement - Germany
- Globalindo Alam Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Asmin Koalindo Tuhup - Indonesia
- Jaiprakash Power Ventures ltd
- Sinarmas Energy and Mining - Indonesia
- Ministry of Mines - Canada
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhatia International Limited - India
- LBH Netherlands Bv - Netherlands
- Bhushan Steel Limited - India
- Coal and Oil Company - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Parry Sugars Refinery, India
- Holcim Trading Pte Ltd - Singapore
- Oldendorff Carriers - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Agrawal Coal Company - India
- Antam Resourcindo - Indonesia
- SMC Global Power, Philippines
- India Bulls Power Limited - India
- Uttam Galva Steels Limited - India
- Thai Mozambique Logistica
- Aboitiz Power Corporation - Philippines
- GVK Power & Infra Limited - India
- Jindal Steel & Power Ltd - India
- Timah Investasi Mineral - Indoneisa
- Kumho Petrochemical, South Korea
- Indika Energy - Indonesia
- IEA Clean Coal Centre - UK
- Riau Bara Harum - Indonesia
- Ministry of Finance - Indonesia
- New Zealand Coal & Carbon
- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- The University of Queensland
- Mercuria Energy - Indonesia
- Australian Coal Association
- Karaikal Port Pvt Ltd - India
- Dalmia Cement Bharat India
- Vijayanagar Sugar Pvt Ltd - India
- Grasim Industreis Ltd - India
- Commonwealth Bank - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- Banpu Public Company Limited - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Global Business Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Deloitte Consulting - India
- Central Electricity Authority - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GMR Energy Limited - India
- Energy Link Ltd, New Zealand
- Billiton Holdings Pty Ltd - Australia
- Xindia Steels Limited - India
- Rio Tinto Coal - Australia
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- Videocon Industries ltd - India
- Planning Commission, India
- Directorate Of Revenue Intelligence - India
- Bahari Cakrawala Sebuku - Indonesia
- The State Trading Corporation of India Ltd
- Kalimantan Lumbung Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- SN Aboitiz Power Inc, Philippines
- Carbofer General Trading SA - India
- Binh Thuan Hamico - Vietnam
- Bulk Trading Sa - Switzerland
- ASAPP Information Group - India
- GAC Shipping (India) Pvt Ltd
- Power Finance Corporation Ltd., India
- Malabar Cements Ltd - India
- Ambuja Cements Ltd - India
- Mintek Dendrill Indonesia
- Kapuas Tunggal Persada - Indonesia
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- Larsen & Toubro Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Sical Logistics Limited - India
- Romanian Commodities Exchange
- Cement Manufacturers Association - India
- PTC India Limited - India
- Attock Cement Pakistan Limited
- Port Waratah Coal Services - Australia
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Edison Trading Spa - Italy
- PowerSource Philippines DevCo
- PNOC Exploration Corporation - Philippines
- Standard Chartered Bank - UAE
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