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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, 16 November 12
SHIP OWNERS KEEP ON INVESTING IN SECOND HAND VESSELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Priced attractively, modern and with prompt delivery dates, second hand vessels are proving to be rather popular among cash-rich ship owners these d ...
Friday, 16 November 12
HANDY : IRON ORE WAS QUIET AND RATES FROM INDIA TO CHINA AROUND USD 5500
Handy
The Atlantic was weak with more supply of ships. Rates from Continent/ Feast at USD 9000 and from USG/China at USD 15k. The Pacific market re ...
Wednesday, 14 November 12
AUSTRALIAN NEWCASTLE PORT HAS LOADED 11.14 PERCENT MORE COAL W-W
COALspot.com - Newcastle port in Australia has loaded 3,100,686 MT of thermal and coking coal for week ended – 0700 hours 12 November 2012, Ne ...
Tuesday, 13 November 12
INITIAL COAL PRODUCTION AT KATINGAN RIA ON TRACK FOR 2013 FOLLOWING GRANTING OF 'IN PRINCIPLE' FORESTRY PERMIT, INDONESIA
Realm Resources Ltd (“Realm” or the “Company” - ASX: RRP) has announced that its application to upgrade its exploration fore ...
Tuesday, 13 November 12
BULK PORTS & TECHNOLOGY ASIA 2013
Press Release - TOC Events are pleased to announce a new addition to our global portfolio with the launch of the inaugural Bulk Ports & Technolo ...
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- Jindal Steel & Power Ltd - India
- Mintek Dendrill Indonesia
- Aboitiz Power Corporation - Philippines
- Wood Mackenzie - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Altura Mining Limited, Indonesia
- Pendopo Energi Batubara - Indonesia
- Directorate Of Revenue Intelligence - India
- Coalindo Energy - Indonesia
- Grasim Industreis Ltd - India
- Ministry of Finance - Indonesia
- Edison Trading Spa - Italy
- Indogreen Group - Indonesia
- London Commodity Brokers - England
- Savvy Resources Ltd - HongKong
- Bulk Trading Sa - Switzerland
- Borneo Indobara - Indonesia
- LBH Netherlands Bv - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Coal and Oil Company - UAE
- Eastern Energy - Thailand
- Timah Investasi Mineral - Indoneisa
- Parry Sugars Refinery, India
- Interocean Group of Companies - India
- Bhatia International Limited - India
- Bhushan Steel Limited - India
- PowerSource Philippines DevCo
- Sical Logistics Limited - India
- Bayan Resources Tbk. - Indonesia
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- Indika Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Marubeni Corporation - India
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Standard Chartered Bank - UAE
- Indian Energy Exchange, India
- Agrawal Coal Company - India
- Merrill Lynch Commodities Europe
- Carbofer General Trading SA - India
- Directorate General of MIneral and Coal - Indonesia
- Attock Cement Pakistan Limited
- Neyveli Lignite Corporation Ltd, - India
- CIMB Investment Bank - Malaysia
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Australian Commodity Traders Exchange
- Tata Chemicals Ltd - India
- Economic Council, Georgia
- Salva Resources Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Leighton Contractors Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- IHS Mccloskey Coal Group - USA
- Posco Energy - South Korea
- Iligan Light & Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Dalmia Cement Bharat India
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ind-Barath Power Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Pipit Mutiara Jaya. PT, Indonesia
- SMC Global Power, Philippines
- Global Business Power Corporation, Philippines
- Aditya Birla Group - India
- Miang Besar Coal Terminal - Indonesia
- Thai Mozambique Logistica
- Bangladesh Power Developement Board
- TNB Fuel Sdn Bhd - Malaysia
- AsiaOL BioFuels Corp., Philippines
- GVK Power & Infra Limited - India
- Samtan Co., Ltd - South Korea
- Rio Tinto Coal - Australia
- Gujarat Sidhee Cement - India
- Mjunction Services Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Sinarmas Energy and Mining - Indonesia
- VISA Power Limited - India
- GMR Energy Limited - India
- Bukit Makmur.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement - Thailand
- White Energy Company Limited
- Billiton Holdings Pty Ltd - Australia
- Georgia Ports Authority, United States
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- Malabar Cements Ltd - India
- Petron Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Star Paper Mills Limited - India
- Intertek Mineral Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Makarim & Taira - Indonesia
- Electricity Authority, New Zealand
- Wilmar Investment Holdings
- Ambuja Cements Ltd - India
- Sojitz Corporation - Japan
- Minerals Council of Australia
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
- Kepco SPC Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- CNBM International Corporation - China
- Indian Oil Corporation Limited
- Parliament of New Zealand
- Trasteel International SA, Italy
- MS Steel International - UAE
- Kartika Selabumi Mining - Indonesia
- Barasentosa Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Medco Energi Mining Internasional
- Riau Bara Harum - Indonesia
- International Coal Ventures Pvt Ltd - India
- Independent Power Producers Association of India
- Maheswari Brothers Coal Limited - India
- Energy Link Ltd, New Zealand
- Vedanta Resources Plc - India
- India Bulls Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Power Finance Corporation Ltd., India
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- Central Electricity Authority - India
- Orica Mining Services - Indonesia
- Bhoruka Overseas - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Straits Asia Resources Limited - Singapore
- Holcim Trading Pte Ltd - Singapore
- South Luzon Thermal Energy Corporation
- Electricity Generating Authority of Thailand
- San Jose City I Power Corp, Philippines
- Thiess Contractors Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Larsen & Toubro Limited - India
- Sarangani Energy Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Tamil Nadu electricity Board
- Australian Coal Association
- Meralco Power Generation, Philippines
- Bukit Baiduri Energy - Indonesia
- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Mercator Lines Limited - India
- Cigading International Bulk Terminal - Indonesia
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Deloitte Consulting - India
- Ministry of Mines - Canada
- SMG Consultants - Indonesia
- PTC India Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- Indonesian Coal Mining Association
- TeaM Sual Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- New Zealand Coal & Carbon
- Uttam Galva Steels Limited - India
- Formosa Plastics Group - Taiwan
- Eastern Coal Council - USA
- Oldendorff Carriers - Singapore
- ASAPP Information Group - India
- The State Trading Corporation of India Ltd
- Africa Commodities Group - South Africa
- Lanco Infratech Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Globalindo Alam Lestari - Indonesia
- Planning Commission, India
- Orica Australia Pty. Ltd.
- Commonwealth Bank - Australia
- Meenaskhi Energy Private Limited - India
- Binh Thuan Hamico - Vietnam
- Goldman Sachs - Singapore
- Kaltim Prima Coal - Indonesia
- McConnell Dowell - Australia
- Latin American Coal - Colombia
- Videocon Industries ltd - India
- Siam City Cement PLC, Thailand
- Xindia Steels Limited - India
- Kobexindo Tractors - Indoneisa
- Mercuria Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Jorong Barutama Greston.PT - Indonesia
- Renaissance Capital - South Africa
- Global Coal Blending Company Limited - Australia
- Asmin Koalindo Tuhup - Indonesia
- Kideco Jaya Agung - Indonesia
- Port Waratah Coal Services - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bharathi Cement Corporation - India
- Chamber of Mines of South Africa
- Kapuas Tunggal Persada - Indonesia
- IEA Clean Coal Centre - UK
- PetroVietnam Power Coal Import and Supply Company
- Energy Development Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Sindya Power Generating Company Private Ltd
- Baramulti Group, Indonesia
- PNOC Exploration Corporation - Philippines
- Romanian Commodities Exchange
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