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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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Monday, 28 September 15
CAPESIZE FLEET INCREASES BY JUST 1 VESSEL DURING LAST 12 MONTHS, IN POSITIVE SIGN FOR DRY BULK SHIPPING MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
After a rather tumultuous period, the shipping industry and more particular the dry bulk market has started to adjust to the new realities of globa ...
Monday, 28 September 15
Q1'16 CFR SOUTH CHINA COAL SWAP ROSE 2.73 PER CENT M-M
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery moved upward US$ 1.45 (3.04 %) per ton month over month.
A commodity ...
Sunday, 27 September 15
THE PANAMAX INDEX FELL 1.19 PCT WEEK OVER WEEK
COALspot.com: The BDI closed Friday (25/09/2015) at 943 points, down by 17 points compared to previous Friday closing (18/09/2015). The BDI wa ...
Friday, 25 September 15
COAL PRODUCTION IN THE U.S. FOR THE WEEK ENDING SEPTEMBER 19 ROSE 2.5% PER CENT W-W
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 17.8 million shor ...
Wednesday, 23 September 15
CAPESIZE: SPOT RATES HAVE INCREASED MORE THAN 70 PER CENT DURING LAST WEEK
Dry Bulk owners, always look at September as the time that the market “signals” what lies ahead for the remainder of the year. The Chin ...
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- SN Aboitiz Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Anglo American - United Kingdom
- Vedanta Resources Plc - India
- Romanian Commodities Exchange
- Sical Logistics Limited - India
- Savvy Resources Ltd - HongKong
- Australian Coal Association
- Bangladesh Power Developement Board
- Barasentosa Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Ceylon Electricity Board - Sri Lanka
- McConnell Dowell - Australia
- The Treasury - Australian Government
- Trasteel International SA, Italy
- White Energy Company Limited
- Parliament of New Zealand
- Ind-Barath Power Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Antam Resourcindo - Indonesia
- Medco Energi Mining Internasional
- Petrochimia International Co. Ltd.- Taiwan
- Intertek Mineral Services - Indonesia
- Global Coal Blending Company Limited - Australia
- Indonesian Coal Mining Association
- Makarim & Taira - Indonesia
- Vizag Seaport Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- IHS Mccloskey Coal Group - USA
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Transport, Egypt
- Energy Link Ltd, New Zealand
- OPG Power Generation Pvt Ltd - India
- Thai Mozambique Logistica
- Billiton Holdings Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- Bukit Baiduri Energy - Indonesia
- Altura Mining Limited, Indonesia
- Mercuria Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Minerals Council of Australia
- Power Finance Corporation Ltd., India
- Singapore Mercantile Exchange
- Latin American Coal - Colombia
- Coalindo Energy - Indonesia
- Cement Manufacturers Association - India
- Ambuja Cements Ltd - India
- Metalloyd Limited - United Kingdom
- SMC Global Power, Philippines
- Planning Commission, India
- PowerSource Philippines DevCo
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Energy - Thailand
- Maheswari Brothers Coal Limited - India
- Electricity Authority, New Zealand
- Indika Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
- Straits Asia Resources Limited - Singapore
- Ministry of Mines - Canada
- Economic Council, Georgia
- Interocean Group of Companies - India
- Pendopo Energi Batubara - Indonesia
- Merrill Lynch Commodities Europe
- European Bulk Services B.V. - Netherlands
- Bhatia International Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Madhucon Powers Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Deloitte Consulting - India
- Price Waterhouse Coopers - Russia
- Posco Energy - South Korea
- Jorong Barutama Greston.PT - Indonesia
- GVK Power & Infra Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Attock Cement Pakistan Limited
- Iligan Light & Power Inc, Philippines
- Dalmia Cement Bharat India
- GMR Energy Limited - India
- Energy Development Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meralco Power Generation, Philippines
- Chamber of Mines of South Africa
- Aboitiz Power Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Rashtriya Ispat Nigam Limited - India
- Oldendorff Carriers - Singapore
- AsiaOL BioFuels Corp., Philippines
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- Sakthi Sugars Limited - India
- San Jose City I Power Corp, Philippines
- Indian Energy Exchange, India
- Directorate Of Revenue Intelligence - India
- New Zealand Coal & Carbon
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- Tata Chemicals Ltd - India
- Chettinad Cement Corporation Ltd - India
- MS Steel International - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sinarmas Energy and Mining - Indonesia
- Sarangani Energy Corporation, Philippines
- Africa Commodities Group - South Africa
- Kaltim Prima Coal - Indonesia
- Grasim Industreis Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Bulk Trading Sa - Switzerland
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Videocon Industries ltd - India
- Wilmar Investment Holdings
- Agrawal Coal Company - India
- VISA Power Limited - India
- Uttam Galva Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bharathi Cement Corporation - India
- Orica Australia Pty. Ltd.
- Formosa Plastics Group - Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Port Waratah Coal Services - Australia
- Central Electricity Authority - India
- Karbindo Abesyapradhi - Indoneisa
- Jaiprakash Power Ventures ltd
- The University of Queensland
- Goldman Sachs - Singapore
- TeaM Sual Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Marubeni Corporation - India
- Australian Commodity Traders Exchange
- Kalimantan Lumbung Energi - Indonesia
- Mjunction Services Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Lanco Infratech Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Electricity Generating Authority of Thailand
- Toyota Tsusho Corporation, Japan
- Renaissance Capital - South Africa
- Standard Chartered Bank - UAE
- Banpu Public Company Limited - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Kumho Petrochemical, South Korea
- Kepco SPC Power Corporation, Philippines
- Indian Oil Corporation Limited
- Asmin Koalindo Tuhup - Indonesia
- Bhoruka Overseas - Indonesia
- Baramulti Group, Indonesia
- Eastern Coal Council - USA
- Indogreen Group - Indonesia
- Timah Investasi Mineral - Indoneisa
- The State Trading Corporation of India Ltd
- Rio Tinto Coal - Australia
- Larsen & Toubro Limited - India
- Globalindo Alam Lestari - Indonesia
- Bhushan Steel Limited - India
- Central Java Power - Indonesia
- Georgia Ports Authority, United States
- Miang Besar Coal Terminal - Indonesia
- ASAPP Information Group - India
- LBH Netherlands Bv - Netherlands
- Tamil Nadu electricity Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Simpson Spence & Young - Indonesia
- Thiess Contractors Indonesia
- Siam City Cement - Thailand
- Meenaskhi Energy Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- Salva Resources Pvt Ltd - India
- Malabar Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Sojitz Corporation - Japan
- Commonwealth Bank - Australia
- SMG Consultants - Indonesia
- Krishnapatnam Port Company Ltd. - India
- London Commodity Brokers - England
- Star Paper Mills Limited - India
- Xindia Steels Limited - India
- Kobexindo Tractors - Indoneisa
- PNOC Exploration Corporation - Philippines
- Mintek Dendrill Indonesia
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- International Coal Ventures Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- PTC India Limited - India
- Mercator Lines Limited - India
- Parry Sugars Refinery, India
- CIMB Investment Bank - Malaysia
- CNBM International Corporation - China
- Siam City Cement PLC, Thailand
- Semirara Mining Corp, Philippines
- IEA Clean Coal Centre - UK
- Global Business Power Corporation, Philippines
- Petron Corporation, Philippines
- ICICI Bank Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Therma Luzon, Inc, Philippines
- Orica Mining Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Coal and Oil Company - UAE
- Riau Bara Harum - Indonesia
- Essar Steel Hazira Ltd - India
- Samtan Co., Ltd - South Korea
- Aditya Birla Group - India
- Gujarat Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Edison Trading Spa - Italy
- Borneo Indobara - Indonesia
- India Bulls Power Limited - India
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