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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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- Latin American Coal - Colombia
- Georgia Ports Authority, United States
- Indogreen Group - Indonesia
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- Sindya Power Generating Company Private Ltd
- Kartika Selabumi Mining - Indonesia
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Parry Sugars Refinery, India
- Thiess Contractors Indonesia
- Energy Development Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Orica Australia Pty. Ltd.
- Antam Resourcindo - Indonesia
- Trasteel International SA, Italy
- Rio Tinto Coal - Australia
- Sojitz Corporation - Japan
- Indonesian Coal Mining Association
- Renaissance Capital - South Africa
- New Zealand Coal & Carbon
- Siam City Cement PLC, Thailand
- Therma Luzon, Inc, Philippines
- Central Java Power - Indonesia
- London Commodity Brokers - England
- Leighton Contractors Pty Ltd - Australia
- Independent Power Producers Association of India
- Australian Coal Association
- Directorate General of MIneral and Coal - Indonesia
- TeaM Sual Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Ministry of Finance - Indonesia
- Formosa Plastics Group - Taiwan
- LBH Netherlands Bv - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Coalindo Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- Holcim Trading Pte Ltd - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- VISA Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- SN Aboitiz Power Inc, Philippines
- Singapore Mercantile Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Minerals Council of Australia
- Xindia Steels Limited - India
- Thai Mozambique Logistica
- Larsen & Toubro Limited - India
- Timah Investasi Mineral - Indoneisa
- Coastal Gujarat Power Limited - India
- Savvy Resources Ltd - HongKong
- GAC Shipping (India) Pvt Ltd
- OPG Power Generation Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- CNBM International Corporation - China
- White Energy Company Limited
- Madhucon Powers Ltd - India
- Africa Commodities Group - South Africa
- Riau Bara Harum - Indonesia
- Vizag Seaport Private Limited - India
- Borneo Indobara - Indonesia
- Electricity Generating Authority of Thailand
- Price Waterhouse Coopers - Russia
- Ceylon Electricity Board - Sri Lanka
- GMR Energy Limited - India
- Electricity Authority, New Zealand
- PNOC Exploration Corporation - Philippines
- ASAPP Information Group - India
- Essar Steel Hazira Ltd - India
- Coal and Oil Company - UAE
- Kaltim Prima Coal - Indonesia
- Carbofer General Trading SA - India
- Mjunction Services Limited - India
- Anglo American - United Kingdom
- IEA Clean Coal Centre - UK
- Global Green Power PLC Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Mercuria Energy - Indonesia
- Siam City Cement - Thailand
- Malabar Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Edison Trading Spa - Italy
- Bhatia International Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Sidhee Cement - India
- Chettinad Cement Corporation Ltd - India
- IHS Mccloskey Coal Group - USA
- Cement Manufacturers Association - India
- Kepco SPC Power Corporation, Philippines
- Posco Energy - South Korea
- Ind-Barath Power Infra Limited - India
- Economic Council, Georgia
- Eastern Coal Council - USA
- Tata Chemicals Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Altura Mining Limited, Indonesia
- Ministry of Transport, Egypt
- AsiaOL BioFuels Corp., Philippines
- Australian Commodity Traders Exchange
- The University of Queensland
- San Jose City I Power Corp, Philippines
- Sakthi Sugars Limited - India
- Bukit Baiduri Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Attock Cement Pakistan Limited
- Sinarmas Energy and Mining - Indonesia
- PTC India Limited - India
- Bhushan Steel Limited - India
- Indika Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Eastern Energy - Thailand
- ICICI Bank Limited - India
- Videocon Industries ltd - India
- Sarangani Energy Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Baramulti Group, Indonesia
- Toyota Tsusho Corporation, Japan
- Bulk Trading Sa - Switzerland
- Kapuas Tunggal Persada - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Goldman Sachs - Singapore
- Kumho Petrochemical, South Korea
- Central Electricity Authority - India
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Standard Chartered Bank - UAE
- Port Waratah Coal Services - Australia
- Kobexindo Tractors - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dalmia Cement Bharat India
- Ministry of Mines - Canada
- Samtan Co., Ltd - South Korea
- Parliament of New Zealand
- CIMB Investment Bank - Malaysia
- Sree Jayajothi Cements Limited - India
- Mintek Dendrill Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Indian Oil Corporation Limited
- Petrochimia International Co. Ltd.- Taiwan
- Wood Mackenzie - Singapore
- PowerSource Philippines DevCo
- Asmin Koalindo Tuhup - Indonesia
- The State Trading Corporation of India Ltd
- Kideco Jaya Agung - Indonesia
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Agrawal Coal Company - India
- Planning Commission, India
- Energy Link Ltd, New Zealand
- European Bulk Services B.V. - Netherlands
- Metalloyd Limited - United Kingdom
- Oldendorff Carriers - Singapore
- Binh Thuan Hamico - Vietnam
- Jaiprakash Power Ventures ltd
- GVK Power & Infra Limited - India
- Meralco Power Generation, Philippines
- Deloitte Consulting - India
- Mercator Lines Limited - India
- Ambuja Cements Ltd - India
- Heidelberg Cement - Germany
- Sical Logistics Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Petron Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Medco Energi Mining Internasional
- Semirara Mining Corp, Philippines
- MS Steel International - UAE
- Chamber of Mines of South Africa
- Jindal Steel & Power Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
- India Bulls Power Limited - India
- Global Coal Blending Company Limited - Australia
- Simpson Spence & Young - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Global Business Power Corporation, Philippines
- Indian Energy Exchange, India
- Grasim Industreis Ltd - India
- Aditya Birla Group - India
- Banpu Public Company Limited - Thailand
- Star Paper Mills Limited - India
- Uttam Galva Steels Limited - India
- McConnell Dowell - Australia
- Makarim & Taira - Indonesia
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- SMG Consultants - Indonesia
- Bharathi Cement Corporation - India
- Bukit Makmur.PT - Indonesia
- Wilmar Investment Holdings
- Tamil Nadu electricity Board
- The Treasury - Australian Government
- TNB Fuel Sdn Bhd - Malaysia
- Bangladesh Power Developement Board
- Lanco Infratech Ltd - India
- Commonwealth Bank - Australia
- Aboitiz Power Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
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