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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, 04 May 12
DEMOLITION KEY FOR DRY BULK MARKET RECOVERY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The overflow of newbuilding vessels which “spilled over” into 2012 from 2011 brought the dry bulk market to a near collapse level at the ...
Thursday, 03 May 12
DRY BULK MARKET REMAINS INACTIVE, POSTING MILD DECREASE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept retreating this week, although at a very low pace, on the back of a lull in demand. The industry's benchmark, th ...
Thursday, 03 May 12
MINERS DEMAND LEGAL CERTAINTY ON PRE-BAN INTERIM POLICY - THE JAKARTA POST
The Jakarta Post reported that, Mining companies represented by the Indonesian Mining Association (IMA) welcomed the government’s plan to impo ...
Thursday, 03 May 12
HANDY EAST COAST INDIA - CHINA AROUND USD 7000 - FEARNLEYS AS
Handy - Stable demand in the Atlantic offered good rates for the tonnage.
USG/Cont was worth USD 17500 and more. Baltic and Black Sea appeared to ...
Wednesday, 02 May 12
CHINA BLACKOUTS HIGHLIGHT PRICING POLICY WEAKNESS - FITCH
Fitch reported that, the likelihood of further electricity blackouts in China this summer underlines Fitch's view of the basic problem f ...
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- Romanian Commodities Exchange
- Latin American Coal - Colombia
- Sree Jayajothi Cements Limited - India
- AsiaOL BioFuels Corp., Philippines
- Central Java Power - Indonesia
- Aboitiz Power Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Aditya Birla Group - India
- Trasteel International SA, Italy
- Jindal Steel & Power Ltd - India
- Chamber of Mines of South Africa
- Pendopo Energi Batubara - Indonesia
- Anglo American - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Baiduri Energy - Indonesia
- Marubeni Corporation - India
- Thiess Contractors Indonesia
- Baramulti Group, Indonesia
- SN Aboitiz Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- PTC India Limited - India
- Toyota Tsusho Corporation, Japan
- Minerals Council of Australia
- Siam City Cement - Thailand
- Standard Chartered Bank - UAE
- SMC Global Power, Philippines
- Savvy Resources Ltd - HongKong
- Iligan Light & Power Inc, Philippines
- Orica Mining Services - Indonesia
- Coal and Oil Company - UAE
- Global Green Power PLC Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- Commonwealth Bank - Australia
- Intertek Mineral Services - Indonesia
- Borneo Indobara - Indonesia
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- Bangladesh Power Developement Board
- Xindia Steels Limited - India
- Orica Australia Pty. Ltd.
- Kideco Jaya Agung - Indonesia
- GMR Energy Limited - India
- Kartika Selabumi Mining - Indonesia
- Sical Logistics Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Bharathi Cement Corporation - India
- White Energy Company Limited
- Renaissance Capital - South Africa
- Indogreen Group - Indonesia
- Vedanta Resources Plc - India
- Bayan Resources Tbk. - Indonesia
- McConnell Dowell - Australia
- Madhucon Powers Ltd - India
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- Banpu Public Company Limited - Thailand
- Ambuja Cements Ltd - India
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
- Samtan Co., Ltd - South Korea
- The University of Queensland
- Power Finance Corporation Ltd., India
- Independent Power Producers Association of India
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Transport, Egypt
- Planning Commission, India
- Mjunction Services Limited - India
- Energy Link Ltd, New Zealand
- Global Coal Blending Company Limited - Australia
- Wilmar Investment Holdings
- Sojitz Corporation - Japan
- Attock Cement Pakistan Limited
- Karaikal Port Pvt Ltd - India
- Agrawal Coal Company - India
- Kohat Cement Company Ltd. - Pakistan
- Neyveli Lignite Corporation Ltd, - India
- Kapuas Tunggal Persada - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- GAC Shipping (India) Pvt Ltd
- Coalindo Energy - Indonesia
- Central Electricity Authority - India
- Mintek Dendrill Indonesia
- Star Paper Mills Limited - India
- Dalmia Cement Bharat India
- Posco Energy - South Korea
- Grasim Industreis Ltd - India
- Riau Bara Harum - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
- Energy Development Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Petron Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Economic Council, Georgia
- Goldman Sachs - Singapore
- Rio Tinto Coal - Australia
- Indo Tambangraya Megah - Indonesia
- Australian Coal Association
- Malabar Cements Ltd - India
- Carbofer General Trading SA - India
- Cement Manufacturers Association - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Merrill Lynch Commodities Europe
- CIMB Investment Bank - Malaysia
- Mercuria Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Gujarat Sidhee Cement - India
- Africa Commodities Group - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Indonesian Coal Mining Association
- Semirara Mining Corp, Philippines
- Oldendorff Carriers - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- CNBM International Corporation - China
- Sinarmas Energy and Mining - Indonesia
- Altura Mining Limited, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Formosa Plastics Group - Taiwan
- Wood Mackenzie - Singapore
- Electricity Authority, New Zealand
- PNOC Exploration Corporation - Philippines
- Port Waratah Coal Services - Australia
- Eastern Energy - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Singapore Mercantile Exchange
- Edison Trading Spa - Italy
- The State Trading Corporation of India Ltd
- Sindya Power Generating Company Private Ltd
- Karbindo Abesyapradhi - Indoneisa
- South Luzon Thermal Energy Corporation
- Georgia Ports Authority, United States
- GVK Power & Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Vizag Seaport Private Limited - India
- Mercator Lines Limited - India
- Jaiprakash Power Ventures ltd
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
- Videocon Industries ltd - India
- ASAPP Information Group - India
- Simpson Spence & Young - Indonesia
- Straits Asia Resources Limited - Singapore
- TeaM Sual Corporation - Philippines
- The Treasury - Australian Government
- Electricity Generating Authority of Thailand
- Meenaskhi Energy Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Parliament of New Zealand
- Cigading International Bulk Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Interocean Group of Companies - India
- London Commodity Brokers - England
- Salva Resources Pvt Ltd - India
- VISA Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Manunggal Multi Energi - Indonesia
- Thai Mozambique Logistica
- Tamil Nadu electricity Board
- Globalindo Alam Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Sakthi Sugars Limited - India
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- Barasentosa Lestari - Indonesia
- Makarim & Taira - Indonesia
- Kaltim Prima Coal - Indonesia
- Larsen & Toubro Limited - India
- Binh Thuan Hamico - Vietnam
- Parry Sugars Refinery, India
- Bahari Cakrawala Sebuku - Indonesia
- International Coal Ventures Pvt Ltd - India
- Global Business Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Meralco Power Generation, Philippines
- Rashtriya Ispat Nigam Limited - India
- GN Power Mariveles Coal Plant, Philippines
- New Zealand Coal & Carbon
- Offshore Bulk Terminal Pte Ltd, Singapore
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Indian Energy Exchange, India
- TNB Fuel Sdn Bhd - Malaysia
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
- Metalloyd Limited - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Lanco Infratech Ltd - India
- Indika Energy - Indonesia
- India Bulls Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Indian Oil Corporation Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- MS Steel International - UAE
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
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