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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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Tuesday, 30 October 12
NEW BUILDING ORDERING ACTIVITY KEEPS ON RETREATING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Ship owners have refrained from placing any new orders of vessels during the course of the past few days, according to shipbroker reports. According ...
Monday, 29 October 12
US COAL EXPORTS ARE EXPECTED TO REACH 125 MILLION TONS THIS YEAR - EIA
COALspot.com - US coal exports are expected to reach 125 million tons this year, surpassing the old record of about 113 million tons set in 1981, sa ...
Sunday, 28 October 12
SUB-BIT INDONESIA COAL SWAPS (FOB ) FOR DECEMBER 2012 DELIVERY STAYED FLAT D-D
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for December 2012 delivery flat on D-D but gained 0.38 percent on W-W on Friday, 26 October 2012, ...
Sunday, 28 October 12
INDONESIA TO INDIA SUPRAMAX FREIGHT MARKET FAIRLY STEADY - VISTAAR
COALspot.com - The Cape size sector continued to remain active with iron ore movement being steady. All other sectors were down.
The BDI was up b ...
Friday, 26 October 12
SHIPPING MARKETS HEADING FOR DIVISION AND MULTI-TIER WILL BECOME THE NORM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
It seems that something is expected to be fundamentally different in the way that the shipping markets will be operating in the future, according to ...
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- Bulk Trading Sa - Switzerland
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Georgia Ports Authority, United States
- Kepco SPC Power Corporation, Philippines
- Eastern Energy - Thailand
- Manunggal Multi Energi - Indonesia
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- Antam Resourcindo - Indonesia
- Alfred C Toepfer International GmbH - Germany
- PowerSource Philippines DevCo
- Renaissance Capital - South Africa
- Kapuas Tunggal Persada - Indonesia
- Global Business Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- PNOC Exploration Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- India Bulls Power Limited - India
- Dalmia Cement Bharat India
- ASAPP Information Group - India
- LBH Netherlands Bv - Netherlands
- CIMB Investment Bank - Malaysia
- Madhucon Powers Ltd - India
- PTC India Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Sinarmas Energy and Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Coal and Oil Company - UAE
- Directorate General of MIneral and Coal - Indonesia
- Kaltim Prima Coal - Indonesia
- Sojitz Corporation - Japan
- Bukit Baiduri Energy - Indonesia
- VISA Power Limited - India
- Central Java Power - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- McConnell Dowell - Australia
- Medco Energi Mining Internasional
- Borneo Indobara - Indonesia
- Romanian Commodities Exchange
- Maharashtra Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Kobexindo Tractors - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Kartika Selabumi Mining - Indonesia
- Deloitte Consulting - India
- Tata Chemicals Ltd - India
- San Jose City I Power Corp, Philippines
- New Zealand Coal & Carbon
- Parliament of New Zealand
- Altura Mining Limited, Indonesia
- Chamber of Mines of South Africa
- PetroVietnam Power Coal Import and Supply Company
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
- IEA Clean Coal Centre - UK
- Formosa Plastics Group - Taiwan
- Makarim & Taira - Indonesia
- Indian Energy Exchange, India
- Merrill Lynch Commodities Europe
- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Bhoruka Overseas - Indonesia
- Meralco Power Generation, Philippines
- Wilmar Investment Holdings
- Toyota Tsusho Corporation, Japan
- Gujarat Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Xindia Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Kohat Cement Company Ltd. - Pakistan
- Bharathi Cement Corporation - India
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aboitiz Power Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Finance - Indonesia
- Intertek Mineral Services - Indonesia
- Indika Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Ministry of Transport, Egypt
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Commonwealth Bank - Australia
- Wood Mackenzie - Singapore
- Ambuja Cements Ltd - India
- The State Trading Corporation of India Ltd
- Gujarat Mineral Development Corp Ltd - India
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
- Gujarat Sidhee Cement - India
- White Energy Company Limited
- Independent Power Producers Association of India
- Ministry of Mines - Canada
- Electricity Generating Authority of Thailand
- Parry Sugars Refinery, India
- Energy Link Ltd, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Lanco Infratech Ltd - India
- Aditya Birla Group - India
- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- Latin American Coal - Colombia
- Malabar Cements Ltd - India
- Carbofer General Trading SA - India
- Holcim Trading Pte Ltd - Singapore
- Energy Development Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Standard Chartered Bank - UAE
- Mintek Dendrill Indonesia
- Orica Australia Pty. Ltd.
- Baramulti Group, Indonesia
- Marubeni Corporation - India
- Bhushan Steel Limited - India
- Singapore Mercantile Exchange
- Edison Trading Spa - Italy
- European Bulk Services B.V. - Netherlands
- Mjunction Services Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Indonesian Coal Mining Association
- Power Finance Corporation Ltd., India
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- Barasentosa Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bukit Asam (Persero) Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Anglo American - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Siam City Cement PLC, Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Thai Mozambique Logistica
- Attock Cement Pakistan Limited
- Africa Commodities Group - South Africa
- Therma Luzon, Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Simpson Spence & Young - Indonesia
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- Rashtriya Ispat Nigam Limited - India
- Kumho Petrochemical, South Korea
- Economic Council, Georgia
- Australian Coal Association
- Larsen & Toubro Limited - India
- Trasteel International SA, Italy
- Bahari Cakrawala Sebuku - Indonesia
- Straits Asia Resources Limited - Singapore
- GAC Shipping (India) Pvt Ltd
- Bangladesh Power Developement Board
- Jaiprakash Power Ventures ltd
- Semirara Mining and Power Corporation, Philippines
- SMC Global Power, Philippines
- Australian Commodity Traders Exchange
- Indo Tambangraya Megah - Indonesia
- Sindya Power Generating Company Private Ltd
- Siam City Cement - Thailand
- Sree Jayajothi Cements Limited - India
- Minerals Council of Australia
- Jorong Barutama Greston.PT - Indonesia
- Central Electricity Authority - India
- Indogreen Group - Indonesia
- Metalloyd Limited - United Kingdom
- London Commodity Brokers - England
- ICICI Bank Limited - India
- GMR Energy Limited - India
- MS Steel International - UAE
- Tamil Nadu electricity Board
- Global Green Power PLC Corporation, Philippines
- The Treasury - Australian Government
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Karaikal Port Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Port Waratah Coal Services - Australia
- Rio Tinto Coal - Australia
- The University of Queensland
- Petron Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Eastern Coal Council - USA
- Oldendorff Carriers - Singapore
- Mercuria Energy - Indonesia
- Uttam Galva Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Coalindo Energy - Indonesia
- Agrawal Coal Company - India
- Savvy Resources Ltd - HongKong
- Planning Commission, India
- Vizag Seaport Private Limited - India
- Vedanta Resources Plc - India
- Price Waterhouse Coopers - Russia
- Karbindo Abesyapradhi - Indoneisa
- Electricity Authority, New Zealand
- Sakthi Sugars Limited - India
- Essar Steel Hazira Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- Bayan Resources Tbk. - Indonesia
- Posco Energy - South Korea
- Chettinad Cement Corporation Ltd - India
- Videocon Industries ltd - India
- Sical Logistics Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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