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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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Monday, 21 April 14
DRY BULK MARKET UPS AND - MOST RECENTLY - DOWNS OFFERS NO ROOM FOR RELAXING AMONG DRY BULK SHIP OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market's latest demise, with the market retrating once again, since the end of March, has come at a time, when most ship owners ...
Sunday, 20 April 14
FREIGHT RATES END WEEK ON WEAK NOTE - VISTAAR
Wish you all Happy Easter.
The freight market continued to its downwards as BDI was fell 7.187 percent to 930 points week on week.
The ...
Friday, 18 April 14
US WEEKLY COAL PRODUCTION DECLINED BY 1% TO 18.9 MMST
COALspot.com – United States the world's second largest coal producer, produced approximately 18.9 million short tons (mmst) of coal i ...
Thursday, 17 April 14
DRY BULK MARKET ON RETREAT MODE, WHILE NEWBUILDING ORDERING ACTIVITY STALLS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept on retreating this week, a pattern which emerged since late March. Yesterday the BDI (Baltic Dry Index) ended yet a ...
Wednesday, 16 April 14
INDONESIA'S FEBRUARY 2014 COAL EXPORT VOLUME FELL 2.41%
COALspot.com: Indonesia, the world 4th largest coal producer and the global largest multi grade coal exporter shipped around $1.77* billio ...
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- Indogreen Group - Indonesia
- Bukit Baiduri Energy - Indonesia
- Mercuria Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Heidelberg Cement - Germany
- Cigading International Bulk Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- GVK Power & Infra Limited - India
- Riau Bara Harum - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Deloitte Consulting - India
- Mercator Lines Limited - India
- Bulk Trading Sa - Switzerland
- Energy Development Corp, Philippines
- Wood Mackenzie - Singapore
- Gujarat Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- Kapuas Tunggal Persada - Indonesia
- Medco Energi Mining Internasional
- Global Coal Blending Company Limited - Australia
- Intertek Mineral Services - Indonesia
- VISA Power Limited - India
- Rio Tinto Coal - Australia
- Bhoruka Overseas - Indonesia
- IEA Clean Coal Centre - UK
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- Power Finance Corporation Ltd., India
- GAC Shipping (India) Pvt Ltd
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- Sical Logistics Limited - India
- TeaM Sual Corporation - Philippines
- SMC Global Power, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Toyota Tsusho Corporation, Japan
- TNB Fuel Sdn Bhd - Malaysia
- Posco Energy - South Korea
- Latin American Coal - Colombia
- Sree Jayajothi Cements Limited - India
- Ambuja Cements Ltd - India
- Antam Resourcindo - Indonesia
- South Luzon Thermal Energy Corporation
- Edison Trading Spa - Italy
- The State Trading Corporation of India Ltd
- Simpson Spence & Young - Indonesia
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Malabar Cements Ltd - India
- CNBM International Corporation - China
- White Energy Company Limited
- Romanian Commodities Exchange
- Wilmar Investment Holdings
- Mjunction Services Limited - India
- Borneo Indobara - Indonesia
- Jindal Steel & Power Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- PTC India Limited - India
- Global Business Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Banpu Public Company Limited - Thailand
- Carbofer General Trading SA - India
- Price Waterhouse Coopers - Russia
- Directorate Of Revenue Intelligence - India
- Tata Chemicals Ltd - India
- Central Electricity Authority - India
- Semirara Mining Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Australian Commodity Traders Exchange
- Jaiprakash Power Ventures ltd
- Kobexindo Tractors - Indoneisa
- Oldendorff Carriers - Singapore
- CIMB Investment Bank - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Xindia Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sinarmas Energy and Mining - Indonesia
- Interocean Group of Companies - India
- Standard Chartered Bank - UAE
- Georgia Ports Authority, United States
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- Maheswari Brothers Coal Limited - India
- Straits Asia Resources Limited - Singapore
- European Bulk Services B.V. - Netherlands
- Bangladesh Power Developement Board
- Port Waratah Coal Services - Australia
- Neyveli Lignite Corporation Ltd, - India
- Indo Tambangraya Megah - Indonesia
- Mintek Dendrill Indonesia
- Kumho Petrochemical, South Korea
- Energy Link Ltd, New Zealand
- India Bulls Power Limited - India
- Bharathi Cement Corporation - India
- Australian Coal Association
- Bahari Cakrawala Sebuku - Indonesia
- International Coal Ventures Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Aboitiz Power Corporation - Philippines
- Ministry of Finance - Indonesia
- Global Green Power PLC Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement PLC, Thailand
- The Treasury - Australian Government
- Coastal Gujarat Power Limited - India
- Siam City Cement - Thailand
- The University of Queensland
- Tamil Nadu electricity Board
- Maharashtra Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Singapore Mercantile Exchange
- ASAPP Information Group - India
- Ceylon Electricity Board - Sri Lanka
- Chamber of Mines of South Africa
- Bukit Makmur.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Iligan Light & Power Inc, Philippines
- Baramulti Group, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- Eastern Coal Council - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thai Mozambique Logistica
- LBH Netherlands Bv - Netherlands
- Chettinad Cement Corporation Ltd - India
- Agrawal Coal Company - India
- Formosa Plastics Group - Taiwan
- Timah Investasi Mineral - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Mineral Development Corp Ltd - India
- Metalloyd Limited - United Kingdom
- Goldman Sachs - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thiess Contractors Indonesia
- Kideco Jaya Agung - Indonesia
- Anglo American - United Kingdom
- SMG Consultants - Indonesia
- Salva Resources Pvt Ltd - India
- Sojitz Corporation - Japan
- Electricity Authority, New Zealand
- Makarim & Taira - Indonesia
- Indonesian Coal Mining Association
- Ministry of Mines - Canada
- Kartika Selabumi Mining - Indonesia
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- Ind-Barath Power Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Parliament of New Zealand
- Rashtriya Ispat Nigam Limited - India
- Renaissance Capital - South Africa
- Grasim Industreis Ltd - India
- MS Steel International - UAE
- Indian Energy Exchange, India
- Savvy Resources Ltd - HongKong
- Orica Mining Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Leighton Contractors Pty Ltd - Australia
- McConnell Dowell - Australia
- Lanco Infratech Ltd - India
- Commonwealth Bank - Australia
- Sindya Power Generating Company Private Ltd
- Larsen & Toubro Limited - India
- Economic Council, Georgia
- Petrochimia International Co. Ltd.- Taiwan
- Globalindo Alam Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Eastern Energy - Thailand
- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- Minerals Council of Australia
- Kaltim Prima Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- New Zealand Coal & Carbon
- Electricity Generating Authority of Thailand
- Parry Sugars Refinery, India
- Holcim Trading Pte Ltd - Singapore
- Sarangani Energy Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
- Meralco Power Generation, Philippines
- Star Paper Mills Limited - India
- Essar Steel Hazira Ltd - India
- Ministry of Transport, Egypt
- Vedanta Resources Plc - India
- Merrill Lynch Commodities Europe
- Cement Manufacturers Association - India
- Indian Oil Corporation Limited
- London Commodity Brokers - England
- Dalmia Cement Bharat India
- Indika Energy - Indonesia
- Marubeni Corporation - India
- Central Java Power - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petron Corporation, Philippines
- Bhushan Steel Limited - India
- Planning Commission, India
- Aditya Birla Group - India
- AsiaOL BioFuels Corp., Philippines
- Videocon Industries ltd - India
- Altura Mining Limited, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Pendopo Energi Batubara - Indonesia
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- San Jose City I Power Corp, Philippines
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