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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, 22 November 12
HANDY: INDO-INDIA, LARGE ECO SUPRA NOW FIXED AT USD 12500 - FEARNRESEARCH
Handy
The north Continent is seeing plenty of tonnages but lack of cargoes. TA business are around 11k and fronthaul is around 17k.Tonnages has tig ...
Thursday, 22 November 12
DRY BULK MARKET RISE, BUT OUTLOOK SEEN DIM ON THE BACK OF RECORD NEW BUILDING DELIVERIES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has been under hefty pressure since the start of the year, as a result of record newbuilding deliveries and below-par demand for ...
Wednesday, 21 November 12
LITTLE IMPACT FROM DISSOLUTION OF BP MIGAS ON INDONESIAN OIL & GAS COMPANIES - FITCH
Fitch Ratings has said that the recent court order to abolish the Indonesian upstream oil and gas regulator, BP Migas, has minimal immediate impact ...
Wednesday, 21 November 12
ORPHEUS ENERGY SECURES FIRST COAL OFF TAKE CONTRACT
COALspot.com - Orpheus Energy Limited (ASX:OEG) has announced that it has signed a coal sales contract with an Indonesian steel manufacturing compan ...
Tuesday, 20 November 12
AUSTRALIAN NEWCASTLE PORT HAS LOADED 13.18 PERCENT LESS COAL W-W
COALspot.com - Newcastle port in Australia has loaded 2,691,731 MT of thermal and coking coal for week ended 0700 hours 19 November 2012, Newc ...
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- Energy Development Corp, Philippines
- PTC India Limited - India
- ASAPP Information Group - India
- GMR Energy Limited - India
- Power Finance Corporation Ltd., India
- Indian Energy Exchange, India
- Central Java Power - Indonesia
- Binh Thuan Hamico - Vietnam
- Karaikal Port Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Ministry of Finance - Indonesia
- Videocon Industries ltd - India
- Bhoruka Overseas - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- PNOC Exploration Corporation - Philippines
- PowerSource Philippines DevCo
- Parry Sugars Refinery, India
- MS Steel International - UAE
- Vedanta Resources Plc - India
- SMC Global Power, Philippines
- Aboitiz Power Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Indian Oil Corporation Limited
- Rashtriya Ispat Nigam Limited - India
- India Bulls Power Limited - India
- Latin American Coal - Colombia
- Baramulti Group, Indonesia
- Uttam Galva Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Global Green Power PLC Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Tamil Nadu electricity Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Makarim & Taira - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- Chettinad Cement Corporation Ltd - India
- Carbofer General Trading SA - India
- Kumho Petrochemical, South Korea
- GAC Shipping (India) Pvt Ltd
- Semirara Mining Corp, Philippines
- Australian Coal Association
- Petrochimia International Co. Ltd.- Taiwan
- New Zealand Coal & Carbon
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Mines - Canada
- IHS Mccloskey Coal Group - USA
- Metalloyd Limited - United Kingdom
- Madhucon Powers Ltd - India
- Coastal Gujarat Power Limited - India
- Samtan Co., Ltd - South Korea
- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Transport, Egypt
- Cigading International Bulk Terminal - Indonesia
- Economic Council, Georgia
- Eastern Energy - Thailand
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- Barasentosa Lestari - Indonesia
- Mintek Dendrill Indonesia
- SMG Consultants - Indonesia
- Siam City Cement - Thailand
- European Bulk Services B.V. - Netherlands
- Salva Resources Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Africa Commodities Group - South Africa
- Krishnapatnam Port Company Ltd. - India
- Edison Trading Spa - Italy
- Savvy Resources Ltd - HongKong
- Medco Energi Mining Internasional
- Wilmar Investment Holdings
- Gujarat Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Simpson Spence & Young - Indonesia
- Aditya Birla Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Heidelberg Cement - Germany
- Anglo American - United Kingdom
- Sakthi Sugars Limited - India
- Sinarmas Energy and Mining - Indonesia
- Malabar Cements Ltd - India
- Planning Commission, India
- The University of Queensland
- Coal and Oil Company - UAE
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- Antam Resourcindo - Indonesia
- Price Waterhouse Coopers - Russia
- Standard Chartered Bank - UAE
- Star Paper Mills Limited - India
- Bayan Resources Tbk. - Indonesia
- Siam City Cement PLC, Thailand
- Bukit Makmur.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Trasteel International SA, Italy
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Indogreen Group - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Singapore Mercantile Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Commodity Traders Exchange
- Xindia Steels Limited - India
- Mercuria Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Ceylon Electricity Board - Sri Lanka
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
- Interocean Group of Companies - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- International Coal Ventures Pvt Ltd - India
- Deloitte Consulting - India
- Meenaskhi Energy Private Limited - India
- Agrawal Coal Company - India
- Intertek Mineral Services - Indonesia
- Global Coal Blending Company Limited - Australia
- Sree Jayajothi Cements Limited - India
- Coalindo Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Link Ltd, New Zealand
- Electricity Authority, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Dalmia Cement Bharat India
- Essar Steel Hazira Ltd - India
- LBH Netherlands Bv - Netherlands
- Wood Mackenzie - Singapore
- Therma Luzon, Inc, Philippines
- Altura Mining Limited, Indonesia
- OPG Power Generation Pvt Ltd - India
- ICICI Bank Limited - India
- Parliament of New Zealand
- Kaltim Prima Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Minerals Council of Australia
- Semirara Mining and Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Larsen & Toubro Limited - India
- Jindal Steel & Power Ltd - India
- IEA Clean Coal Centre - UK
- Pendopo Energi Batubara - Indonesia
- Goldman Sachs - Singapore
- Georgia Ports Authority, United States
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- CIMB Investment Bank - Malaysia
- Mjunction Services Limited - India
- Port Waratah Coal Services - Australia
- Global Business Power Corporation, Philippines
- White Energy Company Limited
- Kalimantan Lumbung Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- London Commodity Brokers - England
- Orica Australia Pty. Ltd.
- Bhushan Steel Limited - India
- Orica Mining Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Cement Manufacturers Association - India
- AsiaOL BioFuels Corp., Philippines
- Maharashtra Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- Bukit Baiduri Energy - Indonesia
- Independent Power Producers Association of India
- PetroVietnam Power Coal Import and Supply Company
- Sindya Power Generating Company Private Ltd
- Rio Tinto Coal - Australia
- Indika Energy - Indonesia
- Chamber of Mines of South Africa
- TeaM Sual Corporation - Philippines
- Vizag Seaport Private Limited - India
- Sical Logistics Limited - India
- Manunggal Multi Energi - Indonesia
- Electricity Generating Authority of Thailand
- Kartika Selabumi Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Commonwealth Bank - Australia
- Lanco Infratech Ltd - India
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- Bharathi Cement Corporation - India
- Mercator Lines Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Indo Tambangraya Megah - Indonesia
- Thiess Contractors Indonesia
- Romanian Commodities Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Central Electricity Authority - India
- Sarangani Energy Corporation, Philippines
- Indonesian Coal Mining Association
- Eastern Coal Council - USA
- Borneo Indobara - Indonesia
- Jaiprakash Power Ventures ltd
- CNBM International Corporation - China
- Bangladesh Power Developement Board
- Attock Cement Pakistan Limited
- Meralco Power Generation, Philippines
- Petron Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Alfred C Toepfer International GmbH - Germany
- VISA Power Limited - India
- Grasim Industreis Ltd - India
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