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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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Thursday, 12 February 15
DRY BULK OWNERS SCRAP MORE VESSELS, AS MARKET REACHES HISTORICAL LOWS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has reached historical lows this week, with the Baltic Dry Index (BDI) now trading at levels below operating expense levels for ...
Thursday, 12 February 15
INDONESIAN COAL PRICE REFERENCE INCHED DOWN 1.44% IN FEBRUARY
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down Indonesian coal bench mark price this month to US$ 62.92 pe ...
Thursday, 12 February 15
NEWBUILDING ORDERING ACTIVITY DRAGS ON, AS OWNERS ARE LOOKING FOR LOWER PRICES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Ship owners appear to be waiting for lower prices in their dealings with Asian shipyards, as the dry bulk market is at historical lows. According t ...
Wednesday, 11 February 15
DRY BULK MARKET REMAINED UNDER PRESSURE : STABILIZING CAPE MARKET HARDLY HELPED SENTIMENT
COALspot.com: The Dry Bulk market remained under pressure last week, while the stabilizing Cape market hardly helped sentiment.
Greece based s ...
Wednesday, 11 February 15
BDI HITTING THE ALL-TIME LOW; FFA MARKETS NOT SHOWING ANY POSITIVE SIGNS
With the BDI hitting the all-time low and with FFA markets not showing any positive signs for a possible recovery in the near future, pessimism is ...
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- Therma Luzon, Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Madhucon Powers Ltd - India
- Central Java Power - Indonesia
- Kepco SPC Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Vedanta Resources Plc - India
- Kumho Petrochemical, South Korea
- Krishnapatnam Port Company Ltd. - India
- Sical Logistics Limited - India
- Global Business Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Kideco Jaya Agung - Indonesia
- Port Waratah Coal Services - Australia
- Sakthi Sugars Limited - India
- Altura Mining Limited, Indonesia
- Wilmar Investment Holdings
- PetroVietnam Power Coal Import and Supply Company
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- Barasentosa Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- GVK Power & Infra Limited - India
- MS Steel International - UAE
- IHS Mccloskey Coal Group - USA
- Bhushan Steel Limited - India
- Standard Chartered Bank - UAE
- SMG Consultants - Indonesia
- Savvy Resources Ltd - HongKong
- Economic Council, Georgia
- PTC India Limited - India
- Mercuria Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Latin American Coal - Colombia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Deloitte Consulting - India
- Ambuja Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Globalindo Alam Lestari - Indonesia
- Georgia Ports Authority, United States
- Siam City Cement - Thailand
- GMR Energy Limited - India
- Power Finance Corporation Ltd., India
- Electricity Generating Authority of Thailand
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- London Commodity Brokers - England
- Thai Mozambique Logistica
- LBH Netherlands Bv - Netherlands
- Coastal Gujarat Power Limited - India
- Bhatia International Limited - India
- Aboitiz Power Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Sarangani Energy Corporation, Philippines
- The Treasury - Australian Government
- Parliament of New Zealand
- Price Waterhouse Coopers - Russia
- Borneo Indobara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Indogreen Group - Indonesia
- Manunggal Multi Energi - Indonesia
- Eastern Energy - Thailand
- Petron Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Salva Resources Pvt Ltd - India
- Anglo American - United Kingdom
- Edison Trading Spa - Italy
- PowerSource Philippines DevCo
- Ceylon Electricity Board - Sri Lanka
- ICICI Bank Limited - India
- Central Electricity Authority - India
- Sinarmas Energy and Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Aditya Birla Group - India
- Attock Cement Pakistan Limited
- PNOC Exploration Corporation - Philippines
- Eastern Coal Council - USA
- Alfred C Toepfer International GmbH - Germany
- Maheswari Brothers Coal Limited - India
- Energy Link Ltd, New Zealand
- Renaissance Capital - South Africa
- Straits Asia Resources Limited - Singapore
- Makarim & Taira - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- TeaM Sual Corporation - Philippines
- Electricity Authority, New Zealand
- San Jose City I Power Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- OPG Power Generation Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- White Energy Company Limited
- Oldendorff Carriers - Singapore
- Karaikal Port Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Ministry of Finance - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Singapore Mercantile Exchange
- Coal and Oil Company - UAE
- Australian Coal Association
- Larsen & Toubro Limited - India
- Thiess Contractors Indonesia
- Kobexindo Tractors - Indoneisa
- Posco Energy - South Korea
- Bharathi Cement Corporation - India
- Cement Manufacturers Association - India
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- CNBM International Corporation - China
- Marubeni Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Toyota Tsusho Corporation, Japan
- Merrill Lynch Commodities Europe
- Independent Power Producers Association of India
- Star Paper Mills Limited - India
- AsiaOL BioFuels Corp., Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Australian Commodity Traders Exchange
- Ministry of Transport, Egypt
- Iligan Light & Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Heidelberg Cement - Germany
- Videocon Industries ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Mines - Canada
- Grasim Industreis Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- Tamil Nadu electricity Board
- Dalmia Cement Bharat India
- Essar Steel Hazira Ltd - India
- Minerals Council of Australia
- Gujarat Sidhee Cement - India
- ASAPP Information Group - India
- Agrawal Coal Company - India
- Sindya Power Generating Company Private Ltd
- Meralco Power Generation, Philippines
- Kaltim Prima Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Sojitz Corporation - Japan
- South Luzon Thermal Energy Corporation
- Gujarat Mineral Development Corp Ltd - India
- Lanco Infratech Ltd - India
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- Billiton Holdings Pty Ltd - Australia
- Romanian Commodities Exchange
- Parry Sugars Refinery, India
- Africa Commodities Group - South Africa
- Medco Energi Mining Internasional
- Xindia Steels Limited - India
- Coalindo Energy - Indonesia
- Orica Australia Pty. Ltd.
- Orica Mining Services - Indonesia
- Bhoruka Overseas - Indonesia
- CIMB Investment Bank - Malaysia
- GAC Shipping (India) Pvt Ltd
- Petrochimia International Co. Ltd.- Taiwan
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
- Wood Mackenzie - Singapore
- SMC Global Power, Philippines
- Leighton Contractors Pty Ltd - Australia
- New Zealand Coal & Carbon
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Mintek Dendrill Indonesia
- Timah Investasi Mineral - Indoneisa
- Malabar Cements Ltd - India
- Bangladesh Power Developement Board
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- Rio Tinto Coal - Australia
- Planning Commission, India
- Tata Chemicals Ltd - India
- Pendopo Energi Batubara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Uttam Galva Steels Limited - India
- Bulk Trading Sa - Switzerland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vizag Seaport Private Limited - India
- Siam City Cement PLC, Thailand
- Semirara Mining Corp, Philippines
- Intertek Mineral Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- McConnell Dowell - Australia
- Neyveli Lignite Corporation Ltd, - India
- Indonesian Coal Mining Association
- Baramulti Group, Indonesia
- VISA Power Limited - India
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- Mjunction Services Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kartika Selabumi Mining - Indonesia
- Energy Development Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Jindal Steel & Power Ltd - India
- IEA Clean Coal Centre - UK
- Riau Bara Harum - Indonesia
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