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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, 20 April 12
PANAMAXES LEAD DRY BULK MARKET TO HIGHER GROUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A rebound of demand for smaller dry bulk carriers has led the industry’s benchmark, the BDI (Baltic Dry Index) above the 1,000-point mark for ...
Friday, 20 April 12
BUMA HAS PRODUCED 2.6 MILLION TONS OF COAL IN MARCH 2012
COALspot.com - BUMA has removed 28.0 million bcm (+6.4% YoY) of overburden in March 2012 while coal production was at 2.6 million tons (+1.3% YoY).
...
Thursday, 19 April 12
FRESH COAL SALES FROM JATENERGYS JONGKANG MINES
COALspot.com - Energy company Jatenergy Ltd (ASX code JAT) announced today that it had signed a contract for an 11,000 tonne coal sale due for shipm ...
Thursday, 19 April 12
HANDY - 'POSITIVE TREND', PANAMAX - 'A FIRMER TENDENCY', CAPESIZE - 'AGAIN NEGATIVE'
Handy
The positive trend from last week continued, with more cargoes entering the market. Skaw/Passero del fixed tick above USD 4000 for US Gulf di ...
Thursday, 19 April 12
WILLIS MARINE MARKET REVIEW FORECASTS ANOTHER DIFFICULT YEAR - WILLIS GLOBAL MARINE / HELLENIC SHIPPING
After an inauspicious start, 2012 could well be "another difficult and uncertain year for the maritime industry faced with the aftermath of the ...
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- India Bulls Power Limited - India
- Africa Commodities Group - South Africa
- Semirara Mining and Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Indian Oil Corporation Limited
- Singapore Mercantile Exchange
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- Parliament of New Zealand
- Indian Energy Exchange, India
- TeaM Sual Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Indo Tambangraya Megah - Indonesia
- San Jose City I Power Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Intertek Mineral Services - Indonesia
- Bhatia International Limited - India
- Coal and Oil Company - UAE
- Bukit Baiduri Energy - Indonesia
- Trasteel International SA, Italy
- PowerSource Philippines DevCo
- ICICI Bank Limited - India
- SMG Consultants - Indonesia
- Carbofer General Trading SA - India
- LBH Netherlands Bv - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Mjunction Services Limited - India
- Kapuas Tunggal Persada - Indonesia
- Tata Chemicals Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- European Bulk Services B.V. - Netherlands
- ASAPP Information Group - India
- Sojitz Corporation - Japan
- Savvy Resources Ltd - HongKong
- Barasentosa Lestari - Indonesia
- Georgia Ports Authority, United States
- Power Finance Corporation Ltd., India
- Pipit Mutiara Jaya. PT, Indonesia
- Bhushan Steel Limited - India
- Energy Development Corp, Philippines
- Ind-Barath Power Infra Limited - India
- GMR Energy Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Sidhee Cement - India
- Orica Australia Pty. Ltd.
- Salva Resources Pvt Ltd - India
- MS Steel International - UAE
- Global Green Power PLC Corporation, Philippines
- Cement Manufacturers Association - India
- Binh Thuan Hamico - Vietnam
- Toyota Tsusho Corporation, Japan
- Baramulti Group, Indonesia
- Wood Mackenzie - Singapore
- Indonesian Coal Mining Association
- Port Waratah Coal Services - Australia
- Kobexindo Tractors - Indoneisa
- Global Coal Blending Company Limited - Australia
- Merrill Lynch Commodities Europe
- Price Waterhouse Coopers - Russia
- International Coal Ventures Pvt Ltd - India
- Coalindo Energy - Indonesia
- Goldman Sachs - Singapore
- Videocon Industries ltd - India
- Edison Trading Spa - Italy
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining Corp, Philippines
- Anglo American - United Kingdom
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- Heidelberg Cement - Germany
- Bangladesh Power Developement Board
- Electricity Generating Authority of Thailand
- Uttam Galva Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
- Aboitiz Power Corporation - Philippines
- Xindia Steels Limited - India
- Economic Council, Georgia
- The Treasury - Australian Government
- Leighton Contractors Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Commonwealth Bank - Australia
- CIMB Investment Bank - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Electricity Authority, New Zealand
- Banpu Public Company Limited - Thailand
- Rio Tinto Coal - Australia
- Sinarmas Energy and Mining - Indonesia
- Sarangani Energy Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- McConnell Dowell - Australia
- Lanco Infratech Ltd - India
- SN Aboitiz Power Inc, Philippines
- White Energy Company Limited
- Posco Energy - South Korea
- Bhoruka Overseas - Indonesia
- Agrawal Coal Company - India
- VISA Power Limited - India
- GVK Power & Infra Limited - India
- Central Electricity Authority - India
- Standard Chartered Bank - UAE
- Thai Mozambique Logistica
- Bayan Resources Tbk. - Indonesia
- Chettinad Cement Corporation Ltd - India
- Mercuria Energy - Indonesia
- The University of Queensland
- SMC Global Power, Philippines
- Australian Commodity Traders Exchange
- Makarim & Taira - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Minerals Council of Australia
- Samtan Co., Ltd - South Korea
- CNBM International Corporation - China
- Vizag Seaport Private Limited - India
- South Luzon Thermal Energy Corporation
- Formosa Plastics Group - Taiwan
- Interocean Group of Companies - India
- Kaltim Prima Coal - Indonesia
- Mintek Dendrill Indonesia
- Holcim Trading Pte Ltd - Singapore
- Globalindo Alam Lestari - Indonesia
- Indogreen Group - Indonesia
- Siam City Cement - Thailand
- Dalmia Cement Bharat India
- PTC India Limited - India
- Thiess Contractors Indonesia
- Alfred C Toepfer International GmbH - Germany
- PNOC Exploration Corporation - Philippines
- Bharathi Cement Corporation - India
- OPG Power Generation Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Vijayanagar Sugar Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Karbindo Abesyapradhi - Indoneisa
- Wilmar Investment Holdings
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- Maheswari Brothers Coal Limited - India
- Vedanta Resources Plc - India
- Madhucon Powers Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- GN Power Mariveles Coal Plant, Philippines
- Larsen & Toubro Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Coal Association
- Independent Power Producers Association of India
- Miang Besar Coal Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Therma Luzon, Inc, Philippines
- New Zealand Coal & Carbon
- Neyveli Lignite Corporation Ltd, - India
- Metalloyd Limited - United Kingdom
- Meenaskhi Energy Private Limited - India
- Riau Bara Harum - Indonesia
- Coastal Gujarat Power Limited - India
- Indika Energy - Indonesia
- Renaissance Capital - South Africa
- IEA Clean Coal Centre - UK
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Kideco Jaya Agung - Indonesia
- Malabar Cements Ltd - India
- The State Trading Corporation of India Ltd
- London Commodity Brokers - England
- Simpson Spence & Young - Indonesia
- Borneo Indobara - Indonesia
- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- Rashtriya Ispat Nigam Limited - India
- Tamil Nadu electricity Board
- Karaikal Port Pvt Ltd - India
- Mercator Lines Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate Of Revenue Intelligence - India
- Energy Link Ltd, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- Jaiprakash Power Ventures ltd
- Medco Energi Mining Internasional
- Kartika Selabumi Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Central Java Power - Indonesia
- Aditya Birla Group - India
- Krishnapatnam Port Company Ltd. - India
- Chamber of Mines of South Africa
- Latin American Coal - Colombia
- Antam Resourcindo - Indonesia
- Altura Mining Limited, Indonesia
- Deloitte Consulting - India
- Iligan Light & Power Inc, Philippines
- Planning Commission, India
- Attock Cement Pakistan Limited
- Petron Corporation, Philippines
- Sical Logistics Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Grasim Industreis Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- Sakthi Sugars Limited - India
- Global Business Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Marubeni Corporation - India
- Ministry of Transport, Egypt
- Meralco Power Generation, Philippines
- Essar Steel Hazira Ltd - India
- Parry Sugars Refinery, India
- Bukit Makmur.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Asmin Koalindo Tuhup - Indonesia
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