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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, 07 January 15
FUEL EFFICIENT SHIPS MAKE LESS SENSE IN LOWER BUNKER PRICE MARKET, BUT FUEL COSTS ARE BOUND TO RISE AGAIN
The shipping industry entered 2015 on mixed emotions, as a relatively buoyant tanker market is met by a rather lackluster dry bulk market. Still, a ...
Wednesday, 07 January 15
2015 IS RIDDLED WITH CHALLENGES FOR THE SHIPPING SECTOR, MOST NOTABLY THE DRY BULK MARKET - HELLENIC SHIPPING NEWS
As the new year has now set foot for real, many are still looking to detect what’s in store for the various shipping markets, with the first ...
Tuesday, 06 January 15
SHIPPING MUST ADOPT CAN-DO ATTITUDE IN 2015 - MOORE STEPHENS
Shipping needs to adopt a can-do attitude in order to successfully meet the challenges which are likely to come its way in 2015.
Shipping part ...
Tuesday, 06 January 15
Q4' 15 FOB INDONESIA COAL SWAP CLOSED 1.81% HIGHER COMPARED TO Q1' 15 CLOSING
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 lost month on month and week over week.
The Q1 swap has lost US$ 0.74 (-1.51%) m ...
Tuesday, 06 January 15
FOB RICHARDS BAY COAL SWAPS LOST W-O-W AND M-O-M, SGX DATA SHOWS
COALspot.com: API 4 FOB Richards Bay Coal for delivery Q1' 2015 lost month on month and week over week.
The Q1 swap has lost US$ 3.52 (-5. ...
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- Bharathi Cement Corporation - India
- Global Coal Blending Company Limited - Australia
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- Mjunction Services Limited - India
- Bhushan Steel Limited - India
- Mintek Dendrill Indonesia
- Lanco Infratech Ltd - India
- Siam City Cement PLC, Thailand
- Kepco SPC Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- GAC Shipping (India) Pvt Ltd
- Krishnapatnam Port Company Ltd. - India
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- Bayan Resources Tbk. - Indonesia
- OPG Power Generation Pvt Ltd - India
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- Jaiprakash Power Ventures ltd
- GN Power Mariveles Coal Plant, Philippines
- Marubeni Corporation - India
- South Luzon Thermal Energy Corporation
- Semirara Mining Corp, Philippines
- Medco Energi Mining Internasional
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Economic Council, Georgia
- Africa Commodities Group - South Africa
- AsiaOL BioFuels Corp., Philippines
- Alfred C Toepfer International GmbH - Germany
- Sical Logistics Limited - India
- Interocean Group of Companies - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- The University of Queensland
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- Sindya Power Generating Company Private Ltd
- Mercator Lines Limited - India
- Metalloyd Limited - United Kingdom
- Minerals Council of Australia
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- TeaM Sual Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- SMG Consultants - Indonesia
- Rio Tinto Coal - Australia
- Eastern Coal Council - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Trasteel International SA, Italy
- Iligan Light & Power Inc, Philippines
- Ministry of Mines - Canada
- Riau Bara Harum - Indonesia
- Sarangani Energy Corporation, Philippines
- IEA Clean Coal Centre - UK
- Sojitz Corporation - Japan
- CIMB Investment Bank - Malaysia
- IHS Mccloskey Coal Group - USA
- Madhucon Powers Ltd - India
- Grasim Industreis Ltd - India
- Orica Mining Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Merrill Lynch Commodities Europe
- Vijayanagar Sugar Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Timah Investasi Mineral - Indoneisa
- Petron Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement - Thailand
- Altura Mining Limited, Indonesia
- Independent Power Producers Association of India
- PTC India Limited - India
- Dalmia Cement Bharat India
- Posco Energy - South Korea
- Power Finance Corporation Ltd., India
- ICICI Bank Limited - India
- Carbofer General Trading SA - India
- CNBM International Corporation - China
- Aditya Birla Group - India
- Australian Coal Association
- McConnell Dowell - Australia
- Essar Steel Hazira Ltd - India
- India Bulls Power Limited - India
- Baramulti Group, Indonesia
- Indonesian Coal Mining Association
- Borneo Indobara - Indonesia
- Heidelberg Cement - Germany
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- Indian Energy Exchange, India
- Port Waratah Coal Services - Australia
- Samtan Co., Ltd - South Korea
- ASAPP Information Group - India
- Central Java Power - Indonesia
- LBH Netherlands Bv - Netherlands
- GMR Energy Limited - India
- Uttam Galva Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Kartika Selabumi Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Videocon Industries ltd - India
- White Energy Company Limited
- Coal and Oil Company - UAE
- Semirara Mining and Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Singapore Mercantile Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Generating Authority of Thailand
- Ministry of Transport, Egypt
- Gujarat Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Indo Tambangraya Megah - Indonesia
- Deloitte Consulting - India
- Manunggal Multi Energi - Indonesia
- Australian Commodity Traders Exchange
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Star Paper Mills Limited - India
- Energy Link Ltd, New Zealand
- Vedanta Resources Plc - India
- Neyveli Lignite Corporation Ltd, - India
- Parliament of New Zealand
- SMC Global Power, Philippines
- Antam Resourcindo - Indonesia
- New Zealand Coal & Carbon
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- Wood Mackenzie - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Directorate Of Revenue Intelligence - India
- Bukit Baiduri Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Salva Resources Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- San Jose City I Power Corp, Philippines
- Ambuja Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bhatia International Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Edison Trading Spa - Italy
- Commonwealth Bank - Australia
- Malabar Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Thiess Contractors Indonesia
- The State Trading Corporation of India Ltd
- Standard Chartered Bank - UAE
- Bukit Makmur.PT - Indonesia
- VISA Power Limited - India
- Coastal Gujarat Power Limited - India
- PowerSource Philippines DevCo
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- Maharashtra Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Tata Chemicals Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Indika Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Thai Mozambique Logistica
- International Coal Ventures Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Larsen & Toubro Limited - India
- Energy Development Corp, Philippines
- Electricity Authority, New Zealand
- Jindal Steel & Power Ltd - India
- London Commodity Brokers - England
- Parry Sugars Refinery, India
- Indogreen Group - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Therma Luzon, Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Kapuas Tunggal Persada - Indonesia
- Orica Australia Pty. Ltd.
- Latin American Coal - Colombia
- Toyota Tsusho Corporation, Japan
- Anglo American - United Kingdom
- Agrawal Coal Company - India
- Kobexindo Tractors - Indoneisa
- Attock Cement Pakistan Limited
- European Bulk Services B.V. - Netherlands
- Indian Oil Corporation Limited
- Ind-Barath Power Infra Limited - India
- Central Electricity Authority - India
- Tamil Nadu electricity Board
- Eastern Energy - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kumho Petrochemical, South Korea
- The Treasury - Australian Government
- Global Business Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Savvy Resources Ltd - HongKong
- GVK Power & Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Chamber of Mines of South Africa
- Georgia Ports Authority, United States
- Kalimantan Lumbung Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Xindia Steels Limited - India
- Oldendorff Carriers - Singapore
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
- Meenaskhi Energy Private Limited - India
- Ministry of Finance - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Vizag Seaport Private Limited - India
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