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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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Wednesday, 08 June 16
THE DRY BULK MARKET KEPT MOVING SIDEWAYS LAST WEEK; SECOND HAND PURCHASES MOVING NORTH - INTERMODAL
Once again its Posidonia time and the biannual exhibition takes place during a very warm June here in Athens, as if the performance of the dry bulk ...
Tuesday, 07 June 16
CS COAL INDEX ROSE FOR SECOND STRAIGHT WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin was up 0.38 percent week over week to averaging $39.16 per ton this past week, shows ...
Monday, 06 June 16
BDI GAINED ON A STRONGER DEMAND FOR CAPESIZE SHIPS
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities rose this past week on a stronger demand for Capesize ves ...
Friday, 03 June 16
DRY BULK VESSEL DELIVERIES COULD BE LESS THAN 50 MILLION DWT IN 2016, AS OWNERS DELAY OR CANCEL NEWBUILDING ORDERS
The dry bulk market has been caught between a rock and a hard place over the course of the past couple of years, as on one hand demand has plunged, ...
Friday, 03 June 16
U.S WEEKLY COAL PRODUCTION SLIDES 1.3% - EIA
COALspot.com – U.S the world’s second largest coal producer has produced approximately totaled an estimated 11.5 million short tons (mm ...
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- Ind-Barath Power Infra Limited - India
- Makarim & Taira - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Ambuja Cements Ltd - India
- The State Trading Corporation of India Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mjunction Services Limited - India
- Posco Energy - South Korea
- Jaiprakash Power Ventures ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Planning Commission, India
- PowerSource Philippines DevCo
- Goldman Sachs - Singapore
- Barasentosa Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Attock Cement Pakistan Limited
- Global Coal Blending Company Limited - Australia
- Riau Bara Harum - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Grasim Industreis Ltd - India
- Parliament of New Zealand
- International Coal Ventures Pvt Ltd - India
- Xindia Steels Limited - India
- Madhucon Powers Ltd - India
- Baramulti Group, Indonesia
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- Siam City Cement - Thailand
- Orica Mining Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Interocean Group of Companies - India
- Krishnapatnam Port Company Ltd. - India
- Vedanta Resources Plc - India
- Tamil Nadu electricity Board
- Maheswari Brothers Coal Limited - India
- ICICI Bank Limited - India
- Aboitiz Power Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Coalindo Energy - Indonesia
- Petron Corporation, Philippines
- Kumho Petrochemical, South Korea
- Africa Commodities Group - South Africa
- Kapuas Tunggal Persada - Indonesia
- LBH Netherlands Bv - Netherlands
- Commonwealth Bank - Australia
- Minerals Council of Australia
- AsiaOL BioFuels Corp., Philippines
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Dalmia Cement Bharat India
- Kideco Jaya Agung - Indonesia
- ASAPP Information Group - India
- Global Green Power PLC Corporation, Philippines
- Thiess Contractors Indonesia
- Australian Coal Association
- Medco Energi Mining Internasional
- Timah Investasi Mineral - Indoneisa
- TeaM Sual Corporation - Philippines
- Metalloyd Limited - United Kingdom
- PNOC Exploration Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Standard Chartered Bank - UAE
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- Mercuria Energy - Indonesia
- The Treasury - Australian Government
- London Commodity Brokers - England
- Gujarat Mineral Development Corp Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- Cement Manufacturers Association - India
- Central Java Power - Indonesia
- Coastal Gujarat Power Limited - India
- Sree Jayajothi Cements Limited - India
- SMC Global Power, Philippines
- Thai Mozambique Logistica
- Romanian Commodities Exchange
- Indian Energy Exchange, India
- Bulk Trading Sa - Switzerland
- Energy Development Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Bahari Cakrawala Sebuku - Indonesia
- OPG Power Generation Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Indian Oil Corporation Limited
- SMG Consultants - Indonesia
- Pendopo Energi Batubara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kaltim Prima Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Price Waterhouse Coopers - Russia
- New Zealand Coal & Carbon
- Heidelberg Cement - Germany
- Banpu Public Company Limited - Thailand
- Directorate Of Revenue Intelligence - India
- Independent Power Producers Association of India
- Malabar Cements Ltd - India
- Simpson Spence & Young - Indonesia
- Bukit Baiduri Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- CNBM International Corporation - China
- Salva Resources Pvt Ltd - India
- MS Steel International - UAE
- Kartika Selabumi Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Australian Commodity Traders Exchange
- VISA Power Limited - India
- GMR Energy Limited - India
- White Energy Company Limited
- Intertek Mineral Services - Indonesia
- San Jose City I Power Corp, Philippines
- Wood Mackenzie - Singapore
- Carbofer General Trading SA - India
- Renaissance Capital - South Africa
- Economic Council, Georgia
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Singapore Mercantile Exchange
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- India Bulls Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Therma Luzon, Inc, Philippines
- Videocon Industries ltd - India
- Bhushan Steel Limited - India
- Edison Trading Spa - Italy
- Karbindo Abesyapradhi - Indoneisa
- Chamber of Mines of South Africa
- Mercator Lines Limited - India
- CIMB Investment Bank - Malaysia
- Holcim Trading Pte Ltd - Singapore
- PTC India Limited - India
- Kepco SPC Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- IEA Clean Coal Centre - UK
- The University of Queensland
- Altura Mining Limited, Indonesia
- Energy Link Ltd, New Zealand
- Wilmar Investment Holdings
- Indogreen Group - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Coal Council - USA
- Borneo Indobara - Indonesia
- Parry Sugars Refinery, India
- Bangladesh Power Developement Board
- Sojitz Corporation - Japan
- GVK Power & Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kobexindo Tractors - Indoneisa
- Larsen & Toubro Limited - India
- Tata Chemicals Ltd - India
- Merrill Lynch Commodities Europe
- Marubeni Corporation - India
- Aditya Birla Group - India
- Semirara Mining Corp, Philippines
- European Bulk Services B.V. - Netherlands
- McConnell Dowell - Australia
- Indonesian Coal Mining Association
- Latin American Coal - Colombia
- SN Aboitiz Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Meralco Power Generation, Philippines
- Rio Tinto Coal - Australia
- Bhatia International Limited - India
- Anglo American - United Kingdom
- Samtan Co., Ltd - South Korea
- Sindya Power Generating Company Private Ltd
- IHS Mccloskey Coal Group - USA
- Ministry of Mines - Canada
- Sakthi Sugars Limited - India
- Semirara Mining and Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Electricity Authority, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Indika Energy - Indonesia
- Vizag Seaport Private Limited - India
- Deloitte Consulting - India
- Coal and Oil Company - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Port Waratah Coal Services - Australia
- Karaikal Port Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Oldendorff Carriers - Singapore
- Global Business Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Electricity Generating Authority of Thailand
- Maharashtra Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Chettinad Cement Corporation Ltd - India
- Agrawal Coal Company - India
- PetroVietnam Power Coal Import and Supply Company
- Jindal Steel & Power Ltd - India
- Ministry of Finance - Indonesia
- Indo Tambangraya Megah - Indonesia
- South Luzon Thermal Energy Corporation
- Sical Logistics Limited - India
- Bayan Resources Tbk. - Indonesia
- Trasteel International SA, Italy
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