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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, 19 June 14
PANAMAX: VERY CLOSE TO BREAKING THE ALL TIME LOW RECORD - FEARNLEYS AS
Handy
The Supra-Handy market is experiencing the same market slow down as its bigger sister markets however not to the same extent. We see TA rat ...
Wednesday, 18 June 14
CHINESE STEEL PRODUCTION SETS RECORD DURING FIRST TEN DAYS OF JUNE - COMMODORE RESEARCH & CONSULTANCY
Recently released data shows that average daily crude steel production at China's key steel mills hit a record high of 1.833 million tons durin ...
Wednesday, 18 June 14
MARKET INSIGHT - TIMOS PAPADIMITRIOU
Back in January the expectations for Q3 and Q4 were more than great. Talks and claims for a rising BDI and a healthy market were coming from everyw ...
Tuesday, 17 June 14
DRY BULK FREIGHT RATES TO RISE DURING THE SECOND HALF OF 2014, AS CHINA IS EXPECTED TO START IMPORTING MORE IRON ORE FROM BRAZIL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
In its latest analysis of the dry bulk market, BIMCO said that it doesn’t expect freight rates to react significantly to increased demand bef ...
Monday, 16 June 14
INDONESIAN COAL SWAPS FOR Q3 DELIVERY FALL 2.34 % MONTH ON MONTH
COALspot.com: Indonesian coal swaps for average Q3’ 2014 lost on day, week and on month according to AsiaClear OTC coal swap's reports re ...
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Showing 3651 to 3655 news of total 6871 |
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- Port Waratah Coal Services - Australia
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- Meralco Power Generation, Philippines
- Price Waterhouse Coopers - Russia
- Directorate Of Revenue Intelligence - India
- Bangladesh Power Developement Board
- LBH Netherlands Bv - Netherlands
- Africa Commodities Group - South Africa
- Sarangani Energy Corporation, Philippines
- Medco Energi Mining Internasional
- Posco Energy - South Korea
- Merrill Lynch Commodities Europe
- Petrochimia International Co. Ltd.- Taiwan
- Coalindo Energy - Indonesia
- Global Business Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Sindya Power Generating Company Private Ltd
- ASAPP Information Group - India
- Indian Energy Exchange, India
- Siam City Cement - Thailand
- CIMB Investment Bank - Malaysia
- Mercator Lines Limited - India
- Kaltim Prima Coal - Indonesia
- The University of Queensland
- Eastern Coal Council - USA
- Ministry of Transport, Egypt
- PTC India Limited - India
- New Zealand Coal & Carbon
- SMG Consultants - Indonesia
- IHS Mccloskey Coal Group - USA
- MS Steel International - UAE
- Jindal Steel & Power Ltd - India
- PowerSource Philippines DevCo
- Gujarat Mineral Development Corp Ltd - India
- Bukit Baiduri Energy - Indonesia
- San Jose City I Power Corp, Philippines
- GVK Power & Infra Limited - India
- Central Electricity Authority - India
- Mjunction Services Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Electricity Generating Authority of Thailand
- Renaissance Capital - South Africa
- Coastal Gujarat Power Limited - India
- Indika Energy - Indonesia
- Singapore Mercantile Exchange
- Baramulti Group, Indonesia
- Antam Resourcindo - Indonesia
- Bayan Resources Tbk. - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Jaiprakash Power Ventures ltd
- Energy Development Corp, Philippines
- VISA Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Vizag Seaport Private Limited - India
- Aditya Birla Group - India
- Mercuria Energy - Indonesia
- ICICI Bank Limited - India
- Anglo American - United Kingdom
- Kideco Jaya Agung - Indonesia
- Ambuja Cements Ltd - India
- Makarim & Taira - Indonesia
- Thiess Contractors Indonesia
- Krishnapatnam Port Company Ltd. - India
- Georgia Ports Authority, United States
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- Timah Investasi Mineral - Indoneisa
- McConnell Dowell - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- International Coal Ventures Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Bukit Makmur.PT - Indonesia
- Wilmar Investment Holdings
- Riau Bara Harum - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Samtan Co., Ltd - South Korea
- Rio Tinto Coal - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Salva Resources Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- TeaM Sual Corporation - Philippines
- Romanian Commodities Exchange
- Xindia Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Edison Trading Spa - Italy
- Interocean Group of Companies - India
- Globalindo Alam Lestari - Indonesia
- Bhatia International Limited - India
- SMC Global Power, Philippines
- Essar Steel Hazira Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Authority, New Zealand
- Carbofer General Trading SA - India
- London Commodity Brokers - England
- Economic Council, Georgia
- Petron Corporation, Philippines
- Agrawal Coal Company - India
- Kalimantan Lumbung Energi - Indonesia
- IEA Clean Coal Centre - UK
- Australian Commodity Traders Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Formosa Plastics Group - Taiwan
- Minerals Council of Australia
- Miang Besar Coal Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Iligan Light & Power Inc, Philippines
- Bhushan Steel Limited - India
- Sical Logistics Limited - India
- Simpson Spence & Young - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kartika Selabumi Mining - Indonesia
- Mintek Dendrill Indonesia
- Intertek Mineral Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Global Green Power PLC Corporation, Philippines
- Uttam Galva Steels Limited - India
- Cement Manufacturers Association - India
- Indogreen Group - Indonesia
- Orica Mining Services - Indonesia
- Indian Oil Corporation Limited
- Savvy Resources Ltd - HongKong
- Binh Thuan Hamico - Vietnam
- Independent Power Producers Association of India
- Grasim Industreis Ltd - India
- Karaikal Port Pvt Ltd - India
- Dalmia Cement Bharat India
- Bukit Asam (Persero) Tbk - Indonesia
- Videocon Industries ltd - India
- PNOC Exploration Corporation - Philippines
- Energy Link Ltd, New Zealand
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- Vedanta Resources Plc - India
- Planning Commission, India
- Tamil Nadu electricity Board
- Marubeni Corporation - India
- Goldman Sachs - Singapore
- Orica Australia Pty. Ltd.
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Central Java Power - Indonesia
- Malabar Cements Ltd - India
- Therma Luzon, Inc, Philippines
- Deloitte Consulting - India
- TNB Fuel Sdn Bhd - Malaysia
- Barasentosa Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Mines - Canada
- The Treasury - Australian Government
- Oldendorff Carriers - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Energy - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CNBM International Corporation - China
- Chamber of Mines of South Africa
- Global Coal Blending Company Limited - Australia
- Gujarat Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Bulk Trading Sa - Switzerland
- Star Paper Mills Limited - India
- Thai Mozambique Logistica
- Gujarat Sidhee Cement - India
- OPG Power Generation Pvt Ltd - India
- Coal and Oil Company - UAE
- Power Finance Corporation Ltd., India
- GMR Energy Limited - India
- Ministry of Finance - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Madhucon Powers Ltd - India
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Banpu Public Company Limited - Thailand
- Latin American Coal - Colombia
- Bharathi Cement Corporation - India
- Parry Sugars Refinery, India
- Pendopo Energi Batubara - Indonesia
- Heidelberg Cement - Germany
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Meenaskhi Energy Private Limited - India
- Commonwealth Bank - Australia
- Ind-Barath Power Infra Limited - India
- Altura Mining Limited, Indonesia
- Parliament of New Zealand
- Wood Mackenzie - Singapore
- Semirara Mining and Power Corporation, Philippines
- Sakthi Sugars Limited - India
- SN Aboitiz Power Inc, Philippines
- Semirara Mining Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- India Bulls Power Limited - India
- White Energy Company Limited
- AsiaOL BioFuels Corp., Philippines
- Kobexindo Tractors - Indoneisa
- Sojitz Corporation - Japan
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Straits Asia Resources Limited - Singapore
- Chettinad Cement Corporation Ltd - India
- Metalloyd Limited - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Tata Chemicals Ltd - India
- Indonesian Coal Mining Association
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