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