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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, 02 December 11
DRY BULK CARRIERS BACK IN THE SPOTLIGHT AS MARKET SPEEDS UP - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the tanker and container markets suffering dearly, it seems that the tide has once again turned in favor of the dry bulk carriers, despite over ...
Thursday, 01 December 11
DRY BULK MARKET RISES TO NEW HEIGHTS ON RENEWED DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept on rising this week, with the industry’s benchmark, the Baltic Dry Index (BDI) climbing to 1,846 points on Wednes ...
Tuesday, 29 November 11
SOUTH AFRICAN COAL INTO CHINA, THE ACTIVITY WAS SLOW - BRS
Capesize
The Capesize market in Atlantic stayed pretty firm last week with transatlantic rounds being fixed in the high twenties. Sentiment was les ...
Tuesday, 29 November 11
GOLDEN GATE BRIDGE OF INDONESIA COLLAPSED AT KUKAR, EAST KALIMANTAN
COALspot.com - A suspension bridge in Indonesia’s east Kalimantan province over the Mahakam river collapsed on Saturday, killing at least elev ...
Tuesday, 29 November 11
BUKIT ASAM SCOUTS RP3 TRILLION PROFIT - INSIDER STORIES
The state-controlled coal miner PT Bukit Asam Tbk (PTBA) expects to post a Rp3 trillion net income this year, reaching its target which is 50% above ...
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- Cement Manufacturers Association - India
- SMG Consultants - Indonesia
- LBH Netherlands Bv - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- Intertek Mineral Services - Indonesia
- Tamil Nadu electricity Board
- Sarangani Energy Corporation, Philippines
- Vizag Seaport Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indika Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- CIMB Investment Bank - Malaysia
- Parliament of New Zealand
- Larsen & Toubro Limited - India
- Maheswari Brothers Coal Limited - India
- Sojitz Corporation - Japan
- India Bulls Power Limited - India
- Sindya Power Generating Company Private Ltd
- The State Trading Corporation of India Ltd
- Africa Commodities Group - South Africa
- Indogreen Group - Indonesia
- London Commodity Brokers - England
- Mintek Dendrill Indonesia
- Planning Commission, India
- Marubeni Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- SMC Global Power, Philippines
- Energy Development Corp, Philippines
- Makarim & Taira - Indonesia
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- Bhushan Steel Limited - India
- Billiton Holdings Pty Ltd - Australia
- Central Electricity Authority - India
- Ind-Barath Power Infra Limited - India
- Coastal Gujarat Power Limited - India
- Madhucon Powers Ltd - India
- Parry Sugars Refinery, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thiess Contractors Indonesia
- Interocean Group of Companies - India
- Miang Besar Coal Terminal - Indonesia
- Rio Tinto Coal - Australia
- Sical Logistics Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement - Thailand
- New Zealand Coal & Carbon
- Manunggal Multi Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Dalmia Cement Bharat India
- Videocon Industries ltd - India
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- Simpson Spence & Young - Indonesia
- Chamber of Mines of South Africa
- Borneo Indobara - Indonesia
- Edison Trading Spa - Italy
- AsiaOL BioFuels Corp., Philippines
- South Luzon Thermal Energy Corporation
- Medco Energi Mining Internasional
- Grasim Industreis Ltd - India
- PNOC Exploration Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- OPG Power Generation Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Standard Chartered Bank - UAE
- Xindia Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
- Merrill Lynch Commodities Europe
- Goldman Sachs - Singapore
- Formosa Plastics Group - Taiwan
- Latin American Coal - Colombia
- Australian Commodity Traders Exchange
- Barasentosa Lestari - Indonesia
- Bangladesh Power Developement Board
- The University of Queensland
- Carbofer General Trading SA - India
- Indonesian Coal Mining Association
- Kaltim Prima Coal - Indonesia
- Lanco Infratech Ltd - India
- Gujarat Sidhee Cement - India
- Georgia Ports Authority, United States
- Bharathi Cement Corporation - India
- Kepco SPC Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Tata Chemicals Ltd - India
- PowerSource Philippines DevCo
- Indo Tambangraya Megah - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement PLC, Thailand
- Electricity Generating Authority of Thailand
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- PTC India Limited - India
- GMR Energy Limited - India
- Pendopo Energi Batubara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Coal Council - USA
- Toyota Tsusho Corporation, Japan
- Sakthi Sugars Limited - India
- Metalloyd Limited - United Kingdom
- Singapore Mercantile Exchange
- International Coal Ventures Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Semirara Mining and Power Corporation, Philippines
- GVK Power & Infra Limited - India
- VISA Power Limited - India
- Straits Asia Resources Limited - Singapore
- Wood Mackenzie - Singapore
- IHS Mccloskey Coal Group - USA
- Kumho Petrochemical, South Korea
- Mjunction Services Limited - India
- Eastern Energy - Thailand
- IEA Clean Coal Centre - UK
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Aditya Birla Group - India
- Kartika Selabumi Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Timah Investasi Mineral - Indoneisa
- The Treasury - Australian Government
- Agrawal Coal Company - India
- Semirara Mining Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Oldendorff Carriers - Singapore
- Petron Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- ICICI Bank Limited - India
- Anglo American - United Kingdom
- Essar Steel Hazira Ltd - India
- Electricity Authority, New Zealand
- Globalindo Alam Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Mines - Canada
- Savvy Resources Ltd - HongKong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Oil Corporation Limited
- Energy Link Ltd, New Zealand
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- Riau Bara Harum - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Coalindo Energy - Indonesia
- Romanian Commodities Exchange
- Economic Council, Georgia
- Directorate General of MIneral and Coal - Indonesia
- Star Paper Mills Limited - India
- Jindal Steel & Power Ltd - India
- Price Waterhouse Coopers - Russia
- Port Waratah Coal Services - Australia
- Sree Jayajothi Cements Limited - India
- Kideco Jaya Agung - Indonesia
- TeaM Sual Corporation - Philippines
- Ministry of Transport, Egypt
- ASAPP Information Group - India
- Neyveli Lignite Corporation Ltd, - India
- Mercator Lines Limited - India
- MS Steel International - UAE
- Directorate Of Revenue Intelligence - India
- Independent Power Producers Association of India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Mining Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thai Mozambique Logistica
- Indian Energy Exchange, India
- Krishnapatnam Port Company Ltd. - India
- Therma Luzon, Inc, Philippines
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Salva Resources Pvt Ltd - India
- Coal and Oil Company - UAE
- Attock Cement Pakistan Limited
- Ministry of Finance - Indonesia
- White Energy Company Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Deloitte Consulting - India
- CNBM International Corporation - China
- Global Business Power Corporation, Philippines
- Central Java Power - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Altura Mining Limited, Indonesia
- Ambuja Cements Ltd - India
- Minerals Council of Australia
- Australian Coal Association
- Posco Energy - South Korea
- Vedanta Resources Plc - India
- Meralco Power Generation, Philippines
- Bayan Resources Tbk. - Indonesia
- Bhatia International Limited - India
- Mercuria Energy - Indonesia
- McConnell Dowell - Australia
- SN Aboitiz Power Inc, Philippines
- Wilmar Investment Holdings
- Iligan Light & Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
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