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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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Thursday, 26 February 15
DRY BULK MARKET LOOKING FOR POSITIVE MOMENTUM, BUT PROSPECTS REMAIN DIM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
As the Baltic Dry Index (BDI) inched a bit higher over the past couple of sessions and the Chinese are returning to the market after a week long hi ...
Wednesday, 25 February 15
PORT OF NEWCASTLE SHIPPED 13.16MT OF COAL IN JANUARY; DECLINED 16.70% FROM A MONTH AGO
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $1.15 billio ...
Wednesday, 25 February 15
BDI SLIPPING ONCE MORE TO FRESH HISTORICAL LOWS
COALspot.com: With the BDI slipping once more to fresh historical lows and the Chinese holidays underway, signs for a positive reversal in the Dry ...
Tuesday, 24 February 15
FOB INDONESIA COAL SWAP SET TO RALLY
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 rose week over week and month on month.
The Q2 swap increased US$ 3.30 (+7.30%) ...
Tuesday, 24 February 15
Q3' FOB RICHARDS BAY COAL SWAP CLOSED $59.80 W/E 20 FEB
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 surge month over month and decline week on week.
The Q2 swap has soar ...
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- Indian Energy Exchange, India
- TeaM Sual Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Trasteel International SA, Italy
- Kumho Petrochemical, South Korea
- Carbofer General Trading SA - India
- South Luzon Thermal Energy Corporation
- Petron Corporation, Philippines
- Siam City Cement - Thailand
- CNBM International Corporation - China
- Kalimantan Lumbung Energi - Indonesia
- Anglo American - United Kingdom
- Siam City Cement PLC, Thailand
- Bulk Trading Sa - Switzerland
- Global Green Power PLC Corporation, Philippines
- Thiess Contractors Indonesia
- Xindia Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Bukit Baiduri Energy - Indonesia
- Cement Manufacturers Association - India
- Tata Chemicals Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- IEA Clean Coal Centre - UK
- Antam Resourcindo - Indonesia
- San Jose City I Power Corp, Philippines
- Madhucon Powers Ltd - India
- Grasim Industreis Ltd - India
- Formosa Plastics Group - Taiwan
- Pendopo Energi Batubara - Indonesia
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Malabar Cements Ltd - India
- Coastal Gujarat Power Limited - India
- London Commodity Brokers - England
- Ministry of Mines - Canada
- Bangladesh Power Developement Board
- New Zealand Coal & Carbon
- MS Steel International - UAE
- GAC Shipping (India) Pvt Ltd
- Australian Coal Association
- Bhatia International Limited - India
- Therma Luzon, Inc, Philippines
- Salva Resources Pvt Ltd - India
- Sojitz Corporation - Japan
- Riau Bara Harum - Indonesia
- European Bulk Services B.V. - Netherlands
- Independent Power Producers Association of India
- Electricity Generating Authority of Thailand
- Price Waterhouse Coopers - Russia
- Latin American Coal - Colombia
- ASAPP Information Group - India
- Alfred C Toepfer International GmbH - Germany
- Metalloyd Limited - United Kingdom
- Mjunction Services Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bukit Makmur.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- ICICI Bank Limited - India
- Ministry of Transport, Egypt
- Global Business Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Maheswari Brothers Coal Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- Videocon Industries ltd - India
- The Treasury - Australian Government
- Billiton Holdings Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Singapore Mercantile Exchange
- Parliament of New Zealand
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- Barasentosa Lestari - Indonesia
- Tamil Nadu electricity Board
- Sarangani Energy Corporation, Philippines
- Parry Sugars Refinery, India
- Wilmar Investment Holdings
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Central Java Power - Indonesia
- Borneo Indobara - Indonesia
- Bhushan Steel Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Sree Jayajothi Cements Limited - India
- Marubeni Corporation - India
- Makarim & Taira - Indonesia
- Sindya Power Generating Company Private Ltd
- Medco Energi Mining Internasional
- Africa Commodities Group - South Africa
- Agrawal Coal Company - India
- Miang Besar Coal Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Aboitiz Power Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- McConnell Dowell - Australia
- PowerSource Philippines DevCo
- The University of Queensland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Ind-Barath Power Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Commonwealth Bank - Australia
- Heidelberg Cement - Germany
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- VISA Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Energy Development Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Mintek Dendrill Indonesia
- Aditya Birla Group - India
- Orica Australia Pty. Ltd.
- Vizag Seaport Private Limited - India
- Posco Energy - South Korea
- Savvy Resources Ltd - HongKong
- Holcim Trading Pte Ltd - Singapore
- Uttam Galva Steels Limited - India
- Jaiprakash Power Ventures ltd
- Kobexindo Tractors - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
- Sical Logistics Limited - India
- Directorate Of Revenue Intelligence - India
- CIMB Investment Bank - Malaysia
- India Bulls Power Limited - India
- Gujarat Sidhee Cement - India
- Attock Cement Pakistan Limited
- Indika Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Meenaskhi Energy Private Limited - India
- LBH Netherlands Bv - Netherlands
- Chettinad Cement Corporation Ltd - India
- White Energy Company Limited
- Indonesian Coal Mining Association
- Edison Trading Spa - Italy
- Coal and Oil Company - UAE
- Indo Tambangraya Megah - Indonesia
- Thai Mozambique Logistica
- SN Aboitiz Power Inc, Philippines
- Interocean Group of Companies - India
- Goldman Sachs - Singapore
- PTC India Limited - India
- Samtan Co., Ltd - South Korea
- Baramulti Group, Indonesia
- Coalindo Energy - Indonesia
- Indogreen Group - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- GVK Power & Infra Limited - India
- Economic Council, Georgia
- Standard Chartered Bank - UAE
- Ceylon Electricity Board - Sri Lanka
- Orica Mining Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Lanco Infratech Ltd - India
- Georgia Ports Authority, United States
- Bukit Asam (Persero) Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Iligan Light & Power Inc, Philippines
- Romanian Commodities Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Authority, New Zealand
- Larsen & Toubro Limited - India
- Renaissance Capital - South Africa
- Minerals Council of Australia
- Merrill Lynch Commodities Europe
- SMG Consultants - Indonesia
- Dalmia Cement Bharat India
- Eastern Energy - Thailand
- Bharathi Cement Corporation - India
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- The State Trading Corporation of India Ltd
- Rio Tinto Coal - Australia
- Mercator Lines Limited - India
- Central Electricity Authority - India
- Power Finance Corporation Ltd., India
- Ambuja Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Planning Commission, India
- Mercuria Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Global Coal Blending Company Limited - Australia
- Port Waratah Coal Services - Australia
- Ministry of Finance - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- OPG Power Generation Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- Star Paper Mills Limited - India
- Wood Mackenzie - Singapore
- AsiaOL BioFuels Corp., Philippines
- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
- Binh Thuan Hamico - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Australian Commodity Traders Exchange
- SMC Global Power, Philippines
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- Deloitte Consulting - India
- Sakthi Sugars Limited - India
- Globalindo Alam Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
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