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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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- Mercuria Energy - Indonesia
- Parry Sugars Refinery, India
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Antam Resourcindo - Indonesia
- Sakthi Sugars Limited - India
- Baramulti Group, Indonesia
- Intertek Mineral Services - Indonesia
- Posco Energy - South Korea
- Leighton Contractors Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Gujarat Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Aboitiz Power Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
- Jaiprakash Power Ventures ltd
- Sindya Power Generating Company Private Ltd
- Formosa Plastics Group - Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Global Coal Blending Company Limited - Australia
- Indika Energy - Indonesia
- Economic Council, Georgia
- Thai Mozambique Logistica
- Timah Investasi Mineral - Indoneisa
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
- Deloitte Consulting - India
- Energy Development Corp, Philippines
- TeaM Sual Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Sojitz Corporation - Japan
- Attock Cement Pakistan Limited
- Kartika Selabumi Mining - Indonesia
- Star Paper Mills Limited - India
- Meenaskhi Energy Private Limited - India
- Aditya Birla Group - India
- Karaikal Port Pvt Ltd - India
- Indogreen Group - Indonesia
- Meralco Power Generation, Philippines
- Sree Jayajothi Cements Limited - India
- SN Aboitiz Power Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Videocon Industries ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Vedanta Resources Plc - India
- Cement Manufacturers Association - India
- Heidelberg Cement - Germany
- Makarim & Taira - Indonesia
- McConnell Dowell - Australia
- Bayan Resources Tbk. - Indonesia
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- Mintek Dendrill Indonesia
- Rashtriya Ispat Nigam Limited - India
- Electricity Authority, New Zealand
- Dalmia Cement Bharat India
- South Luzon Thermal Energy Corporation
- Ministry of Finance - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Uttam Galva Steels Limited - India
- Latin American Coal - Colombia
- Power Finance Corporation Ltd., India
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- Price Waterhouse Coopers - Russia
- Merrill Lynch Commodities Europe
- Tata Chemicals Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Lanco Infratech Ltd - India
- Global Business Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Chettinad Cement Corporation Ltd - India
- Borneo Indobara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Vizag Seaport Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- VISA Power Limited - India
- Bangladesh Power Developement Board
- San Jose City I Power Corp, Philippines
- The University of Queensland
- Commonwealth Bank - Australia
- GAC Shipping (India) Pvt Ltd
- Bulk Trading Sa - Switzerland
- Billiton Holdings Pty Ltd - Australia
- Xindia Steels Limited - India
- Bhushan Steel Limited - India
- International Coal Ventures Pvt Ltd - India
- SMC Global Power, Philippines
- Manunggal Multi Energi - Indonesia
- Rio Tinto Coal - Australia
- ASAPP Information Group - India
- New Zealand Coal & Carbon
- Kideco Jaya Agung - Indonesia
- Therma Luzon, Inc, Philippines
- White Energy Company Limited
- Eastern Energy - Thailand
- Parliament of New Zealand
- Edison Trading Spa - Italy
- PTC India Limited - India
- Renaissance Capital - South Africa
- Independent Power Producers Association of India
- PowerSource Philippines DevCo
- Miang Besar Coal Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Vijayanagar Sugar Pvt Ltd - India
- Orica Mining Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- Kepco SPC Power Corporation, Philippines
- Georgia Ports Authority, United States
- Energy Link Ltd, New Zealand
- Coastal Gujarat Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Singapore Mercantile Exchange
- SMG Consultants - Indonesia
- Marubeni Corporation - India
- Trasteel International SA, Italy
- Savvy Resources Ltd - HongKong
- Kumho Petrochemical, South Korea
- Minerals Council of Australia
- Central Java Power - Indonesia
- Mjunction Services Limited - India
- GMR Energy Limited - India
- Port Waratah Coal Services - Australia
- Carbofer General Trading SA - India
- Essar Steel Hazira Ltd - India
- Coalindo Energy - Indonesia
- Grasim Industreis Ltd - India
- MS Steel International - UAE
- PNOC Exploration Corporation - Philippines
- Altura Mining Limited, Indonesia
- Ambuja Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Orica Australia Pty. Ltd.
- Thiess Contractors Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GVK Power & Infra Limited - India
- CIMB Investment Bank - Malaysia
- Ministry of Transport, Egypt
- CNBM International Corporation - China
- Barasentosa Lestari - Indonesia
- Goldman Sachs - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Romanian Commodities Exchange
- Bhatia International Limited - India
- AsiaOL BioFuels Corp., Philippines
- LBH Netherlands Bv - Netherlands
- Electricity Generating Authority of Thailand
- Sical Logistics Limited - India
- Toyota Tsusho Corporation, Japan
- Metalloyd Limited - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Riau Bara Harum - Indonesia
- Indonesian Coal Mining Association
- PetroVietnam Power Coal Import and Supply Company
- IEA Clean Coal Centre - UK
- Maheswari Brothers Coal Limited - India
- Semirara Mining and Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- Banpu Public Company Limited - Thailand
- Madhucon Powers Ltd - India
- Directorate Of Revenue Intelligence - India
- Alfred C Toepfer International GmbH - Germany
- Salva Resources Pvt Ltd - India
- ICICI Bank Limited - India
- Ceylon Electricity Board - Sri Lanka
- Agrawal Coal Company - India
- Global Green Power PLC Corporation, Philippines
- Africa Commodities Group - South Africa
- London Commodity Brokers - England
- Neyveli Lignite Corporation Ltd, - India
- The Treasury - Australian Government
- Bharathi Cement Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Oldendorff Carriers - Singapore
- Wood Mackenzie - Singapore
- Kaltim Prima Coal - Indonesia
- Semirara Mining Corp, Philippines
- Standard Chartered Bank - UAE
- Anglo American - United Kingdom
- Petron Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Samtan Co., Ltd - South Korea
- Gujarat Sidhee Cement - India
- Coal and Oil Company - UAE
- Karbindo Abesyapradhi - Indoneisa
- Jindal Steel & Power Ltd - India
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- Ministry of Mines - Canada
- Tamil Nadu electricity Board
- Indian Oil Corporation Limited
- Australian Coal Association
- Sinarmas Energy and Mining - Indonesia
- Eastern Coal Council - USA
- Wilmar Investment Holdings
- Siam City Cement - Thailand
- Chamber of Mines of South Africa
- Bukit Makmur.PT - Indonesia
- Interocean Group of Companies - India
- Kapuas Tunggal Persada - Indonesia
- Simpson Spence & Young - Indonesia
- Planning Commission, India
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