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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, 27 March 12
DRY BULK MARKET KEEP RISING FOLLOWING THE SAME TREND OF LAST WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept its upward momentum this week, on the same reasons of those last week. That is, the smaller ship types are still on the ris ...
Monday, 26 March 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The Baltic Dry Index follows its upward incline for fourth consecutive week by rising to more than 900 points, up by 37% from the bottom low in the ...
Monday, 26 March 12
GOLDEN MINES FY11 REVENUE JUMPS 209% - INSIDER STORIES
Insider Stories reported that, coal miner PT Golden Energy Mines Tbk (GEMS), that is controlled by Sinar Mas Group, recorded a 209% jump in revenue ...
Saturday, 24 March 12
AUSTRALIA'S MINERAL TAX : BENCHMARK FOR OTHER COUNTRIES - SUNIL K KUMBHAT
COALspot.com - Natural resources rich counties like Australia , Indonesia , South Africa , Brazil etc are going through a spectacular resources boom ...
Saturday, 24 March 12
THE AVERAGE CHARTER RATES WAS AT CAPESIZE $ 4,546 PER DAY VS SUPRAMAX / $ 10,819 PER DAY - VISTAAR
COALspot.com - The BDI crossed 900 points this week closing at 908 points up by 3.89 pct. All other sectors were up except for cape index whic ...
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- White Energy Company Limited
- Indika Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- Global Business Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- LBH Netherlands Bv - Netherlands
- TeaM Sual Corporation - Philippines
- Marubeni Corporation - India
- Alfred C Toepfer International GmbH - Germany
- Tamil Nadu electricity Board
- Cement Manufacturers Association - India
- Indonesian Coal Mining Association
- Barasentosa Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Energy Development Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Standard Chartered Bank - UAE
- Indian Oil Corporation Limited
- Port Waratah Coal Services - Australia
- Siam City Cement PLC, Thailand
- Asmin Koalindo Tuhup - Indonesia
- IEA Clean Coal Centre - UK
- Commonwealth Bank - Australia
- Kobexindo Tractors - Indoneisa
- Parry Sugars Refinery, India
- Coastal Gujarat Power Limited - India
- Singapore Mercantile Exchange
- Petron Corporation, Philippines
- Mintek Dendrill Indonesia
- Latin American Coal - Colombia
- Directorate General of MIneral and Coal - Indonesia
- Wood Mackenzie - Singapore
- Xindia Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Bharathi Cement Corporation - India
- Kepco SPC Power Corporation, Philippines
- GMR Energy Limited - India
- Banpu Public Company Limited - Thailand
- Bukit Makmur.PT - Indonesia
- South Luzon Thermal Energy Corporation
- SMG Consultants - Indonesia
- Malabar Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- Medco Energi Mining Internasional
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- Miang Besar Coal Terminal - Indonesia
- ASAPP Information Group - India
- Planning Commission, India
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- MS Steel International - UAE
- The University of Queensland
- Mercuria Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Maheswari Brothers Coal Limited - India
- The Treasury - Australian Government
- Intertek Mineral Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- Aboitiz Power Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Madhucon Powers Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Sical Logistics Limited - India
- Australian Commodity Traders Exchange
- The State Trading Corporation of India Ltd
- Attock Cement Pakistan Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- London Commodity Brokers - England
- Baramulti Group, Indonesia
- Ministry of Finance - Indonesia
- PTC India Limited - India
- New Zealand Coal & Carbon
- Rashtriya Ispat Nigam Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Eastern Coal Council - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indo Tambangraya Megah - Indonesia
- OPG Power Generation Pvt Ltd - India
- Minerals Council of Australia
- Deloitte Consulting - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Merrill Lynch Commodities Europe
- Toyota Tsusho Corporation, Japan
- Agrawal Coal Company - India
- Therma Luzon, Inc, Philippines
- PowerSource Philippines DevCo
- Indogreen Group - Indonesia
- Coal and Oil Company - UAE
- European Bulk Services B.V. - Netherlands
- VISA Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Krishnapatnam Port Company Ltd. - India
- Power Finance Corporation Ltd., India
- GVK Power & Infra Limited - India
- Kaltim Prima Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bhatia International Limited - India
- Chamber of Mines of South Africa
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- Gujarat Sidhee Cement - India
- Thiess Contractors Indonesia
- Thai Mozambique Logistica
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- Cigading International Bulk Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Coalindo Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Straits Asia Resources Limited - Singapore
- Anglo American - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Sindya Power Generating Company Private Ltd
- Riau Bara Harum - Indonesia
- Independent Power Producers Association of India
- Holcim Trading Pte Ltd - Singapore
- Central Java Power - Indonesia
- Grasim Industreis Ltd - India
- Borneo Indobara - Indonesia
- Aditya Birla Group - India
- Edison Trading Spa - Italy
- Ministry of Transport, Egypt
- Antam Resourcindo - Indonesia
- Vedanta Resources Plc - India
- Timah Investasi Mineral - Indoneisa
- Manunggal Multi Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Bhushan Steel Limited - India
- International Coal Ventures Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Meralco Power Generation, Philippines
- Economic Council, Georgia
- Ministry of Mines - Canada
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Sakthi Sugars Limited - India
- Kohat Cement Company Ltd. - Pakistan
- McConnell Dowell - Australia
- Neyveli Lignite Corporation Ltd, - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Renaissance Capital - South Africa
- Australian Coal Association
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- AsiaOL BioFuels Corp., Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Indian Energy Exchange, India
- Orica Mining Services - Indonesia
- Ind-Barath Power Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Rio Tinto Coal - Australia
- Interocean Group of Companies - India
- Goldman Sachs - Singapore
- SN Aboitiz Power Inc, Philippines
- Tata Chemicals Ltd - India
- Star Paper Mills Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Kumho Petrochemical, South Korea
- Makarim & Taira - Indonesia
- Bhoruka Overseas - Indonesia
- ICICI Bank Limited - India
- Global Green Power PLC Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wilmar Investment Holdings
- Sinarmas Energy and Mining - Indonesia
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- India Bulls Power Limited - India
- Orica Australia Pty. Ltd.
- Posco Energy - South Korea
- Trasteel International SA, Italy
- San Jose City I Power Corp, Philippines
- Siam City Cement - Thailand
- Bangladesh Power Developement Board
- Bayan Resources Tbk. - Indonesia
- Electricity Generating Authority of Thailand
- Sarangani Energy Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Central Electricity Authority - India
- Meenaskhi Energy Private Limited - India
- Savvy Resources Ltd - HongKong
- Uttam Galva Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Energy Link Ltd, New Zealand
- Eastern Energy - Thailand
- Price Waterhouse Coopers - Russia
- Sojitz Corporation - Japan
- Lanco Infratech Ltd - India
- IHS Mccloskey Coal Group - USA
- Karaikal Port Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Authority, New Zealand
- Parliament of New Zealand
- Bulk Trading Sa - Switzerland
- Romanian Commodities Exchange
- Karbindo Abesyapradhi - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Larsen & Toubro Limited - India
- Mercator Lines Limited - India
- Mjunction Services Limited - India
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