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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, 13 November 14
MODERN DRY BULK SHIPS' PRICES START FIRMING UP - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
While the main story of the past few weeks has been the rebound of the dry bulk market, which has been a result of increased Chinese iron ore impor ...
Wednesday, 12 November 14
PANAMAX: WITNESSED A FAIRLY STABLE MARKET IN THE ATLANTIC
COALspot.com: Despite the fact that the Dry Bulk market noted another weekly increase, clouds of uncertainty returned mid-week onwards, as the mini ...
Wednesday, 12 November 14
SHIPPING MARKET INSIGHT - CHRISTOPHER T. WHITTY
COALspot.com: The fight continues between the low-cost iron ore producers and the big three: Vale, Rio Tinto and BHP Billiton. We are moving into a ...
Tuesday, 11 November 14
FACING CHALLENGES AND MEETING OPPORTUNITIES - INTERNATIONAL EPC CONFERENCE & EXHIBITION
Press Release: SKYCONNECTION and TRANSEVENT, which is fully supported by the Institution of Engineers Indonesia and Ministry of Industry of the Rep ...
Tuesday, 11 November 14
NEWCASTLE COAL SWAP CLOSED AT $ 52.65 FOR Q1' 15 DELIVERY
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery decreased US$ 2.83 (-5.10%) month over month and US$ 1.35 (-2.50%) week ove ...
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- Sree Jayajothi Cements Limited - India
- Attock Cement Pakistan Limited
- Renaissance Capital - South Africa
- Orica Mining Services - Indonesia
- Medco Energi Mining Internasional
- Price Waterhouse Coopers - Russia
- Altura Mining Limited, Indonesia
- Agrawal Coal Company - India
- Karbindo Abesyapradhi - Indoneisa
- Global Business Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- Indonesian Coal Mining Association
- Lanco Infratech Ltd - India
- TeaM Sual Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cement Manufacturers Association - India
- Baramulti Group, Indonesia
- Intertek Mineral Services - Indonesia
- Toyota Tsusho Corporation, Japan
- SMG Consultants - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Merrill Lynch Commodities Europe
- Minerals Council of Australia
- PetroVietnam Power Coal Import and Supply Company
- Jindal Steel & Power Ltd - India
- Sindya Power Generating Company Private Ltd
- Essar Steel Hazira Ltd - India
- Power Finance Corporation Ltd., India
- Barasentosa Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Bangladesh Power Developement Board
- Petron Corporation, Philippines
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Tata Chemicals Ltd - India
- Wilmar Investment Holdings
- Standard Chartered Bank - UAE
- Tamil Nadu electricity Board
- Marubeni Corporation - India
- Formosa Plastics Group - Taiwan
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Salva Resources Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Karaikal Port Pvt Ltd - India
- ASAPP Information Group - India
- Straits Asia Resources Limited - Singapore
- Ministry of Mines - Canada
- IEA Clean Coal Centre - UK
- Jorong Barutama Greston.PT - Indonesia
- Thai Mozambique Logistica
- Kumho Petrochemical, South Korea
- Latin American Coal - Colombia
- Africa Commodities Group - South Africa
- Indika Energy - Indonesia
- Makarim & Taira - Indonesia
- Coal and Oil Company - UAE
- Semirara Mining Corp, Philippines
- Madhucon Powers Ltd - India
- Sojitz Corporation - Japan
- Meralco Power Generation, Philippines
- Bulk Trading Sa - Switzerland
- PTC India Limited - India
- Bukit Baiduri Energy - Indonesia
- Eastern Energy - Thailand
- VISA Power Limited - India
- Bhushan Steel Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Authority, New Zealand
- Kapuas Tunggal Persada - Indonesia
- McConnell Dowell - Australia
- Parry Sugars Refinery, India
- Parliament of New Zealand
- PNOC Exploration Corporation - Philippines
- Ambuja Cements Ltd - India
- Mercuria Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Manunggal Multi Energi - Indonesia
- Electricity Generating Authority of Thailand
- Coastal Gujarat Power Limited - India
- Dalmia Cement Bharat India
- Sical Logistics Limited - India
- Uttam Galva Steels Limited - India
- Therma Luzon, Inc, Philippines
- Vizag Seaport Private Limited - India
- Banpu Public Company Limited - Thailand
- Bhoruka Overseas - Indonesia
- Mintek Dendrill Indonesia
- Kideco Jaya Agung - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bayan Resources Tbk. - Indonesia
- Globalindo Alam Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Gujarat Sidhee Cement - India
- Miang Besar Coal Terminal - Indonesia
- Central Java Power - Indonesia
- Singapore Mercantile Exchange
- Interocean Group of Companies - India
- Gujarat Mineral Development Corp Ltd - India
- Kaltim Prima Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Carbofer General Trading SA - India
- New Zealand Coal & Carbon
- Commonwealth Bank - Australia
- Coalindo Energy - Indonesia
- Economic Council, Georgia
- Directorate Of Revenue Intelligence - India
- Planning Commission, India
- Ministry of Transport, Egypt
- GN Power Mariveles Coal Plant, Philippines
- Kepco SPC Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Kartika Selabumi Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- SMC Global Power, Philippines
- Bhatia International Limited - India
- Global Coal Blending Company Limited - Australia
- Goldman Sachs - Singapore
- GAC Shipping (India) Pvt Ltd
- White Energy Company Limited
- Binh Thuan Hamico - Vietnam
- Aboitiz Power Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Deloitte Consulting - India
- Indian Energy Exchange, India
- Samtan Co., Ltd - South Korea
- International Coal Ventures Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Thiess Contractors Indonesia
- MS Steel International - UAE
- PowerSource Philippines DevCo
- Krishnapatnam Port Company Ltd. - India
- European Bulk Services B.V. - Netherlands
- Grasim Industreis Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Savvy Resources Ltd - HongKong
- Xindia Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Indian Oil Corporation Limited
- Oldendorff Carriers - Singapore
- Kobexindo Tractors - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Sinarmas Energy and Mining - Indonesia
- Antam Resourcindo - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CIMB Investment Bank - Malaysia
- San Jose City I Power Corp, Philippines
- Central Electricity Authority - India
- CNBM International Corporation - China
- Edison Trading Spa - Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Heidelberg Cement - Germany
- Rio Tinto Coal - Australia
- Energy Development Corp, Philippines
- Videocon Industries ltd - India
- Independent Power Producers Association of India
- Meenaskhi Energy Private Limited - India
- Malabar Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Ind-Barath Power Infra Limited - India
- The State Trading Corporation of India Ltd
- Aditya Birla Group - India
- OPG Power Generation Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Larsen & Toubro Limited - India
- London Commodity Brokers - England
- Trasteel International SA, Italy
- Vedanta Resources Plc - India
- Sakthi Sugars Limited - India
- Rashtriya Ispat Nigam Limited - India
- Anglo American - United Kingdom
- Georgia Ports Authority, United States
- Australian Commodity Traders Exchange
- Bharathi Cement Corporation - India
- Ministry of Finance - Indonesia
- Global Green Power PLC Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SN Aboitiz Power Inc, Philippines
- The University of Queensland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GVK Power & Infra Limited - India
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- South Luzon Thermal Energy Corporation
- Mjunction Services Limited - India
- Jaiprakash Power Ventures ltd
- Orica Australia Pty. Ltd.
- Maheswari Brothers Coal Limited - India
- Mercator Lines Limited - India
- Sarangani Energy Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Wood Mackenzie - Singapore
- ICICI Bank Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Australian Coal Association
- Chettinad Cement Corporation Ltd - India
- Star Paper Mills Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Indogreen Group - Indonesia
- Eastern Coal Council - USA
- Romanian Commodities Exchange
- Riau Bara Harum - Indonesia
- Gujarat Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Posco Energy - South Korea
- Neyveli Lignite Corporation Ltd, - India
- India Bulls Power Limited - India
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