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