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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, 02 October 14
CAPESIZE - DULL AND WITHOUT MUCH DIRECTION AS IRON ORE AND COAL VOLUMES FAIL TO LIVE UP EXPECTATIONS
Handy
After the recent weeks´ rate increase in the Atlantic we see Panamaxes snapping up handymax and Supra cargoes at much lower levels, p ...
Wednesday, 01 October 14
ASIAN THERMAL COAL PRICES TO REMAIN WEAK ON OVERSUPPLY - FITCH
COALspot.com: The thermal coal market in Asia will remain oversupplied in the next 12 months, in spite of on-going rationalisation of production, a ...
Wednesday, 01 October 14
PANAMAXES: DEFENSIVE, STRUGGLING TO KEEP ANY FURTHER DECREASES - INTERMODAL
COALspot.com: The Dry Bulk market seemed unable to shake off the trend of the week prior and the BDI remained on a downward slope for the bigger pa ...
Wednesday, 01 October 14
FITCH: GLOBAL ECONOMY FACES MULTI-SPEED RECOVERY, MULTIPLE RISKS
Fitch Ratings says in its latest Global Economic Outlook (GEO) that global growth will pick up in 2015 and 2016, but risks are weighted to the down ...
Tuesday, 30 September 14
COALVIEW TO PARTICIPATE AT MET COKE WORLD SUMMIT 2014 IN CHICAGO
COALspot.com: Coalview Ltd., LLC(“Coalview”) America's leading fully integrated coal technology and fine coal recovery company prov ...
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- GN Power Mariveles Coal Plant, Philippines
- Straits Asia Resources Limited - Singapore
- Merrill Lynch Commodities Europe
- Sree Jayajothi Cements Limited - India
- Australian Coal Association
- Lanco Infratech Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Neyveli Lignite Corporation Ltd, - India
- Australian Commodity Traders Exchange
- Kapuas Tunggal Persada - Indonesia
- Economic Council, Georgia
- Heidelberg Cement - Germany
- Billiton Holdings Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Malabar Cements Ltd - India
- Standard Chartered Bank - UAE
- GVK Power & Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Sakthi Sugars Limited - India
- SMC Global Power, Philippines
- Africa Commodities Group - South Africa
- Altura Mining Limited, Indonesia
- Salva Resources Pvt Ltd - India
- Bhatia International Limited - India
- McConnell Dowell - Australia
- Rio Tinto Coal - Australia
- Singapore Mercantile Exchange
- Indonesian Coal Mining Association
- Electricity Generating Authority of Thailand
- Directorate General of MIneral and Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- ICICI Bank Limited - India
- Borneo Indobara - Indonesia
- Makarim & Taira - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Sindya Power Generating Company Private Ltd
- Jorong Barutama Greston.PT - Indonesia
- Mjunction Services Limited - India
- Jaiprakash Power Ventures ltd
- Xindia Steels Limited - India
- Gujarat Sidhee Cement - India
- The Treasury - Australian Government
- Madhucon Powers Ltd - India
- Intertek Mineral Services - Indonesia
- TeaM Sual Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Indo Tambangraya Megah - Indonesia
- Marubeni Corporation - India
- Vizag Seaport Private Limited - India
- Ambuja Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- Minerals Council of Australia
- Romanian Commodities Exchange
- Maheswari Brothers Coal Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Chamber of Mines of South Africa
- Independent Power Producers Association of India
- Medco Energi Mining Internasional
- IHS Mccloskey Coal Group - USA
- Planning Commission, India
- PowerSource Philippines DevCo
- VISA Power Limited - India
- Price Waterhouse Coopers - Russia
- Krishnapatnam Port Company Ltd. - India
- Parry Sugars Refinery, India
- Dalmia Cement Bharat India
- Barasentosa Lestari - Indonesia
- Tamil Nadu electricity Board
- CNBM International Corporation - China
- Siam City Cement PLC, Thailand
- Antam Resourcindo - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aditya Birla Group - India
- Global Business Power Corporation, Philippines
- ASAPP Information Group - India
- Indogreen Group - Indonesia
- Manunggal Multi Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Vedanta Resources Plc - India
- Bahari Cakrawala Sebuku - Indonesia
- Savvy Resources Ltd - HongKong
- Ministry of Transport, Egypt
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Coal Council - USA
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thiess Contractors Indonesia
- Larsen & Toubro Limited - India
- Bukit Makmur.PT - Indonesia
- GAC Shipping (India) Pvt Ltd
- Global Coal Blending Company Limited - Australia
- Siam City Cement - Thailand
- Interocean Group of Companies - India
- IEA Clean Coal Centre - UK
- Leighton Contractors Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Bangladesh Power Developement Board
- Orica Australia Pty. Ltd.
- Meralco Power Generation, Philippines
- Edison Trading Spa - Italy
- Rashtriya Ispat Nigam Limited - India
- Bukit Baiduri Energy - Indonesia
- White Energy Company Limited
- Grasim Industreis Ltd - India
- Latin American Coal - Colombia
- Agrawal Coal Company - India
- Binh Thuan Hamico - Vietnam
- PTC India Limited - India
- Pendopo Energi Batubara - Indonesia
- Goldman Sachs - Singapore
- Bharathi Cement Corporation - India
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Electricity Authority, New Zealand
- Ministry of Finance - Indonesia
- Bayan Resources Tbk. - Indonesia
- Power Finance Corporation Ltd., India
- Metalloyd Limited - United Kingdom
- Ministry of Mines - Canada
- Essar Steel Hazira Ltd - India
- Parliament of New Zealand
- Central Electricity Authority - India
- Riau Bara Harum - Indonesia
- Iligan Light & Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Kumho Petrochemical, South Korea
- Timah Investasi Mineral - Indoneisa
- Coalindo Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mintek Dendrill Indonesia
- Attock Cement Pakistan Limited
- Kideco Jaya Agung - Indonesia
- CIMB Investment Bank - Malaysia
- Bhushan Steel Limited - India
- Orica Mining Services - Indonesia
- Port Waratah Coal Services - Australia
- PNOC Exploration Corporation - Philippines
- Star Paper Mills Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- Semirara Mining Corp, Philippines
- Indika Energy - Indonesia
- Banpu Public Company Limited - Thailand
- San Jose City I Power Corp, Philippines
- Energy Development Corp, Philippines
- Commonwealth Bank - Australia
- MS Steel International - UAE
- Asmin Koalindo Tuhup - Indonesia
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- Indian Energy Exchange, India
- PetroVietnam Power Coal Import and Supply Company
- Therma Luzon, Inc, Philippines
- Deloitte Consulting - India
- Ind-Barath Power Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Central Java Power - Indonesia
- Chettinad Cement Corporation Ltd - India
- International Coal Ventures Pvt Ltd - India
- Baramulti Group, Indonesia
- Mercator Lines Limited - India
- Cement Manufacturers Association - India
- Globalindo Alam Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Indian Oil Corporation Limited
- Wood Mackenzie - Singapore
- The State Trading Corporation of India Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Oldendorff Carriers - Singapore
- Georgia Ports Authority, United States
- Miang Besar Coal Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Maharashtra Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bulk Trading Sa - Switzerland
- Coal and Oil Company - UAE
- Kepco SPC Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Sical Logistics Limited - India
- Trasteel International SA, Italy
- Uttam Galva Steels Limited - India
- New Zealand Coal & Carbon
- Eastern Energy - Thailand
- Petron Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- India Bulls Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Renaissance Capital - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- Sojitz Corporation - Japan
- Semirara Mining and Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Kaltim Prima Coal - Indonesia
- Carbofer General Trading SA - India
- Meenaskhi Energy Private Limited - India
- The University of Queensland
- Wilmar Investment Holdings
- Cigading International Bulk Terminal - Indonesia
- Tata Chemicals Ltd - India
- Sarangani Energy Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Posco Energy - South Korea
- Bhoruka Overseas - Indonesia
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