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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, 14 August 12
SAKARI SIGNS HEADS OF AGREEMENT TO ACQUIRE SIX COAL CONCESSIONS IN INDONESIA
COALspot.com - Sakari has signed a Heads of Agreement (HOA) to acquire a 100% interest in up to six IUPs, covering an area of over 29,000 hectares, ...
Tuesday, 14 August 12
UNCERTAIN FUTURE FOR DRY BULK PANAMAX SHIPS - DREWRY / HELLENIC SHIPPING
The dry bulk shipping market is in a poor state, with the Capesize segment the worst of all. Unfortunately, the latest analysis from Drewry Maritime ...
Monday, 13 August 12
5TH VIETNAM PORTS AND LOGISTICS 2012
Press Release - Co-hosted by VINAMARINE, the 5th Vietnam Ports and Logistics2012 will feature dedicated sessions on port and transport infrastructur ...
Monday, 13 August 12
ACTIVE DRY BULK FLEET INCREASES BY 8% SO FAR IN 2012 IN TERMS OF TONNAGE CAPACITY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
It’s no wonder that the dry bulk market has been tethering since the start of the year. the overflow of tonnage has been so enormous, that eve ...
Sunday, 12 August 12
COAL FREIGHT RATES FALL FLAT TO SOFT ON OVERSUPPLY, WEAK DEMAND - VISTAAR SINGAPROE
COALspot.com - The BDI continued its fall 10th August.
This week all segments were down including BDI down by 9.15 pct closing at 774 points .The ...
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Samtan Co., Ltd - South Korea
- Edison Trading Spa - Italy
- SMC Global Power, Philippines
- Indian Oil Corporation Limited
- Singapore Mercantile Exchange
- Iligan Light & Power Inc, Philippines
- Mjunction Services Limited - India
- Siam City Cement - Thailand
- PNOC Exploration Corporation - Philippines
- Eastern Coal Council - USA
- Coastal Gujarat Power Limited - India
- South Luzon Thermal Energy Corporation
- Kaltim Prima Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- London Commodity Brokers - England
- Merrill Lynch Commodities Europe
- Wilmar Investment Holdings
- Jorong Barutama Greston.PT - Indonesia
- Goldman Sachs - Singapore
- AsiaOL BioFuels Corp., Philippines
- Mintek Dendrill Indonesia
- Sakthi Sugars Limited - India
- Aboitiz Power Corporation - Philippines
- Gujarat Sidhee Cement - India
- Minerals Council of Australia
- Salva Resources Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Bhushan Steel Limited - India
- McConnell Dowell - Australia
- GVK Power & Infra Limited - India
- Electricity Generating Authority of Thailand
- Krishnapatnam Port Company Ltd. - India
- Bukit Asam (Persero) Tbk - Indonesia
- Global Business Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- Ind-Barath Power Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Lanco Infratech Ltd - India
- Xindia Steels Limited - India
- Bhoruka Overseas - Indonesia
- Sarangani Energy Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Thai Mozambique Logistica
- Tamil Nadu electricity Board
- PetroVietnam Power Coal Import and Supply Company
- Bukit Makmur.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Antam Resourcindo - Indonesia
- Ambuja Cements Ltd - India
- Kumho Petrochemical, South Korea
- Indogreen Group - Indonesia
- Latin American Coal - Colombia
- Georgia Ports Authority, United States
- Uttam Galva Steels Limited - India
- Banpu Public Company Limited - Thailand
- Standard Chartered Bank - UAE
- Electricity Authority, New Zealand
- Kepco SPC Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- GMR Energy Limited - India
- Australian Coal Association
- White Energy Company Limited
- Cement Manufacturers Association - India
- Energy Development Corp, Philippines
- San Jose City I Power Corp, Philippines
- Interocean Group of Companies - India
- Petrochimia International Co. Ltd.- Taiwan
- Jaiprakash Power Ventures ltd
- Deloitte Consulting - India
- GAC Shipping (India) Pvt Ltd
- European Bulk Services B.V. - Netherlands
- Port Waratah Coal Services - Australia
- Heidelberg Cement - Germany
- Marubeni Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Independent Power Producers Association of India
- The University of Queensland
- Indian Energy Exchange, India
- Commonwealth Bank - Australia
- Sical Logistics Limited - India
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- Thiess Contractors Indonesia
- Grasim Industreis Ltd - India
- Orica Mining Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Eastern Energy - Thailand
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Romanian Commodities Exchange
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Directorate Of Revenue Intelligence - India
- Malabar Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Kohat Cement Company Ltd. - Pakistan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Madhucon Powers Ltd - India
- Sree Jayajothi Cements Limited - India
- Price Waterhouse Coopers - Russia
- Parry Sugars Refinery, India
- CIMB Investment Bank - Malaysia
- Vedanta Resources Plc - India
- Sojitz Corporation - Japan
- Indika Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Global Green Power PLC Corporation, Philippines
- Renaissance Capital - South Africa
- Mercuria Energy - Indonesia
- India Bulls Power Limited - India
- Attock Cement Pakistan Limited
- PTC India Limited - India
- Australian Commodity Traders Exchange
- Semirara Mining Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- Anglo American - United Kingdom
- CNBM International Corporation - China
- Agrawal Coal Company - India
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Medco Energi Mining Internasional
- Toyota Tsusho Corporation, Japan
- Intertek Mineral Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- VISA Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- ASAPP Information Group - India
- Barasentosa Lestari - Indonesia
- Larsen & Toubro Limited - India
- Central Electricity Authority - India
- IEA Clean Coal Centre - UK
- Makarim & Taira - Indonesia
- Sindya Power Generating Company Private Ltd
- Energy Link Ltd, New Zealand
- SN Aboitiz Power Inc, Philippines
- Economic Council, Georgia
- Meralco Power Generation, Philippines
- Aditya Birla Group - India
- Vizag Seaport Private Limited - India
- Posco Energy - South Korea
- Kideco Jaya Agung - Indonesia
- Essar Steel Hazira Ltd - India
- Star Paper Mills Limited - India
- Wood Mackenzie - Singapore
- International Coal Ventures Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Miang Besar Coal Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Kapuas Tunggal Persada - Indonesia
- Orica Australia Pty. Ltd.
- PowerSource Philippines DevCo
- Ministry of Mines - Canada
- Bangladesh Power Developement Board
- New Zealand Coal & Carbon
- Indo Tambangraya Megah - Indonesia
- SMG Consultants - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- Simpson Spence & Young - Indonesia
- Bharathi Cement Corporation - India
- Bulk Trading Sa - Switzerland
- Tata Chemicals Ltd - India
- Siam City Cement PLC, Thailand
- Indonesian Coal Mining Association
- LBH Netherlands Bv - Netherlands
- Altura Mining Limited, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Videocon Industries ltd - India
- Petron Corporation, Philippines
- Ministry of Transport, Egypt
- Straits Asia Resources Limited - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Mineral Development Corp Ltd - India
- Mercator Lines Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Oldendorff Carriers - Singapore
- Bhatia International Limited - India
- Coal and Oil Company - UAE
- Gujarat Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Baramulti Group, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- TeaM Sual Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Binh Thuan Hamico - Vietnam
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- Planning Commission, India
- Riau Bara Harum - Indonesia
- Maheswari Brothers Coal Limited - India
- Borneo Indobara - Indonesia
- Trasteel International SA, Italy
- Coalindo Energy - Indonesia
- Ministry of Finance - Indonesia
- ICICI Bank Limited - India
- MS Steel International - UAE
- Jindal Steel & Power Ltd - India
- Savvy Resources Ltd - HongKong
- Offshore Bulk Terminal Pte Ltd, Singapore
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