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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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Friday, 01 November 13
DRY BULK MARKET IN FIRST POSITIVE SIGN IN DAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Owners of dry bulk carriers are well aware of the rollercoaster ride that has been the market for their vessels over the past few years. This trend ...
Thursday, 31 October 13
HANDY: ACTIVE; PANAMAX: QUIET; CAPESIZE: NO LIGHT
Handy
The handy market had an active week however not directly translated into the rates we´ve seen in the Pacific. We see more coal and baux ...
Wednesday, 30 October 13
INDONESIAN STATE OWNED COAL MINER HAS EXPORTED 7.02 MILLION TONS OF COAL IN 9 MONTHS
COALspot.com : PT. Bukit Asam, Indonesian state owned coal miner has sold 13.24 million tons of coal for the period January - September 2013. Accord ...
Wednesday, 30 October 13
DRY BULK MARKET HAS LOST FURTHER GROUND THIS PAST WEEK - INTERMODAL
Chartering (Wet: Firm+ / Dry: Stable-)
The Dry Bulk market has lost further ground this past week, as de-creased activity in both basins for both C ...
Wednesday, 30 October 13
CAPESIZE: DOWNWARD; SUPRAS AND HANDIES: STABLE - INTERMODAL
The Dry Bulk market has resumed its downward movement, noting another dip for a third week in a row. The larger size segments were responsible for p ...
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- Essar Steel Hazira Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- The University of Queensland
- Samtan Co., Ltd - South Korea
- Siam City Cement PLC, Thailand
- Vedanta Resources Plc - India
- Energy Link Ltd, New Zealand
- Sree Jayajothi Cements Limited - India
- Jaiprakash Power Ventures ltd
- Sojitz Corporation - Japan
- Interocean Group of Companies - India
- Mercuria Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Marubeni Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Heidelberg Cement - Germany
- AsiaOL BioFuels Corp., Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Oldendorff Carriers - Singapore
- The State Trading Corporation of India Ltd
- Gujarat Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Attock Cement Pakistan Limited
- Kepco SPC Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Energy Development Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Indika Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Makarim & Taira - Indonesia
- Antam Resourcindo - Indonesia
- Xindia Steels Limited - India
- Australian Commodity Traders Exchange
- Ind-Barath Power Infra Limited - India
- Jindal Steel & Power Ltd - India
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Globalindo Alam Lestari - Indonesia
- Electricity Authority, New Zealand
- PTC India Limited - India
- Africa Commodities Group - South Africa
- TeaM Sual Corporation - Philippines
- Bhatia International Limited - India
- Tata Chemicals Ltd - India
- Bulk Trading Sa - Switzerland
- Georgia Ports Authority, United States
- Salva Resources Pvt Ltd - India
- Lanco Infratech Ltd - India
- Aditya Birla Group - India
- Central Java Power - Indonesia
- Wilmar Investment Holdings
- Mjunction Services Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Iligan Light & Power Inc, Philippines
- Ministry of Finance - Indonesia
- Videocon Industries ltd - India
- MS Steel International - UAE
- Ambuja Cements Ltd - India
- Gujarat Sidhee Cement - India
- Bangladesh Power Developement Board
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Central Electricity Authority - India
- Australian Coal Association
- Siam City Cement - Thailand
- Independent Power Producers Association of India
- Chamber of Mines of South Africa
- Toyota Tsusho Corporation, Japan
- Commonwealth Bank - Australia
- Indonesian Coal Mining Association
- International Coal Ventures Pvt Ltd - India
- Agrawal Coal Company - India
- Riau Bara Harum - Indonesia
- Binh Thuan Hamico - Vietnam
- Orica Australia Pty. Ltd.
- Bhushan Steel Limited - India
- Kobexindo Tractors - Indoneisa
- Latin American Coal - Colombia
- Romanian Commodities Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Star Paper Mills Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Goldman Sachs - Singapore
- SMC Global Power, Philippines
- Rio Tinto Coal - Australia
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Global Business Power Corporation, Philippines
- Baramulti Group, Indonesia
- Maheswari Brothers Coal Limited - India
- ASAPP Information Group - India
- Mercator Lines Limited - India
- Savvy Resources Ltd - HongKong
- Simpson Spence & Young - Indonesia
- Sakthi Sugars Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Meralco Power Generation, Philippines
- Standard Chartered Bank - UAE
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining and Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- Neyveli Lignite Corporation Ltd, - India
- Pendopo Energi Batubara - Indonesia
- Sical Logistics Limited - India
- Altura Mining Limited, Indonesia
- Ministry of Mines - Canada
- Madhucon Powers Ltd - India
- Renaissance Capital - South Africa
- Bukit Makmur.PT - Indonesia
- Bharathi Cement Corporation - India
- Formosa Plastics Group - Taiwan
- The Treasury - Australian Government
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- South Luzon Thermal Energy Corporation
- Manunggal Multi Energi - Indonesia
- White Energy Company Limited
- Deloitte Consulting - India
- Coalindo Energy - Indonesia
- Uttam Galva Steels Limited - India
- Minerals Council of Australia
- VISA Power Limited - India
- Power Finance Corporation Ltd., India
- SN Aboitiz Power Inc, Philippines
- Singapore Mercantile Exchange
- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- Planning Commission, India
- Eastern Energy - Thailand
- Directorate Of Revenue Intelligence - India
- Bhoruka Overseas - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cement Manufacturers Association - India
- Indian Oil Corporation Limited
- Malabar Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- Parry Sugars Refinery, India
- London Commodity Brokers - England
- Kalimantan Lumbung Energi - Indonesia
- Wood Mackenzie - Singapore
- Straits Asia Resources Limited - Singapore
- LBH Netherlands Bv - Netherlands
- Global Coal Blending Company Limited - Australia
- Miang Besar Coal Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
- IHS Mccloskey Coal Group - USA
- Meenaskhi Energy Private Limited - India
- New Zealand Coal & Carbon
- Merrill Lynch Commodities Europe
- Carbofer General Trading SA - India
- Sarangani Energy Corporation, Philippines
- GMR Energy Limited - India
- Kapuas Tunggal Persada - Indonesia
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- Global Green Power PLC Corporation, Philippines
- Parliament of New Zealand
- Medco Energi Mining Internasional
- Banpu Public Company Limited - Thailand
- Port Waratah Coal Services - Australia
- San Jose City I Power Corp, Philippines
- Grasim Industreis Ltd - India
- Trasteel International SA, Italy
- Intertek Mineral Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Thiess Contractors Indonesia
- Krishnapatnam Port Company Ltd. - India
- CNBM International Corporation - China
- Posco Energy - South Korea
- India Bulls Power Limited - India
- Coastal Gujarat Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Thai Mozambique Logistica
- Kumho Petrochemical, South Korea
- Chettinad Cement Corporation Ltd - India
- Metalloyd Limited - United Kingdom
- Indo Tambangraya Megah - Indonesia
- SMG Consultants - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Larsen & Toubro Limited - India
- European Bulk Services B.V. - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Anglo American - United Kingdom
- Price Waterhouse Coopers - Russia
- McConnell Dowell - Australia
- Indian Energy Exchange, India
- Mintek Dendrill Indonesia
- Borneo Indobara - Indonesia
- Economic Council, Georgia
- Dalmia Cement Bharat India
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- Eastern Coal Council - USA
- ICICI Bank Limited - India
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