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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, 27 February 14
SHIPPING LOANS WORTH $5 BILLION HAVE CHANGED HANDS OVER THE PAST YEAR, AS FUNDS INVEST IN SHIPPING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Funds investing in shipping has been the "talk of the town" over the past couple of years, as institutional investors, private equity and ...
Thursday, 27 February 14
NEWCASTLE COAL EXPORTS SLIP 26.68 PERCENT WEEK ON WEEK
COALspot.com: In the week ended 24 February 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, total 2. ...
Wednesday, 26 February 14
SMALLER SIZE SEGMENTS HOLDING ON TO THEIR LEVELS; CAPES CORRECTING UPWARDS - INTERMODAL
Chartering (Wet: Stable- / Dry: Stable+)
The Dry Bulk market continued to improve this past week, on the back of rates for the smaller size s ...
Tuesday, 25 February 14
GBCE, A COAL UPGRADING TECHNOLOGY DEVELOPER, APPOINTS RICHARD BULMAN AS PROJECT DIRECTOR
Press Release: GB Clean Energy Ltd. (GBCE) announced today the appointment of Richard Bulman as Project Director. In this capacity Mr. Bulman ...
Tuesday, 25 February 14
ULTRAMAXES ARE THE 'WEAPON OF CHOICE' FOR DRY BULK SHIP OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
It's been a busy start in 2014, as the first month of the year was a rather active in terms of second hand vessel purchases and newbuilding orderin ...
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- Ceylon Electricity Board - Sri Lanka
- Riau Bara Harum - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Malabar Cements Ltd - India
- Coal and Oil Company - UAE
- Merrill Lynch Commodities Europe
- Gujarat Mineral Development Corp Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- White Energy Company Limited
- Mjunction Services Limited - India
- GMR Energy Limited - India
- Dalmia Cement Bharat India
- GN Power Mariveles Coal Plant, Philippines
- Vedanta Resources Plc - India
- Krishnapatnam Port Company Ltd. - India
- Oldendorff Carriers - Singapore
- Deloitte Consulting - India
- Sical Logistics Limited - India
- Wood Mackenzie - Singapore
- Global Business Power Corporation, Philippines
- ICICI Bank Limited - India
- Central Electricity Authority - India
- Eastern Energy - Thailand
- Electricity Generating Authority of Thailand
- Global Green Power PLC Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Jaiprakash Power Ventures ltd
- TeaM Sual Corporation - Philippines
- Sojitz Corporation - Japan
- Thiess Contractors Indonesia
- Binh Thuan Hamico - Vietnam
- Altura Mining Limited, Indonesia
- Singapore Mercantile Exchange
- OPG Power Generation Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Ind-Barath Power Infra Limited - India
- Ministry of Finance - Indonesia
- Uttam Galva Steels Limited - India
- Carbofer General Trading SA - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- London Commodity Brokers - England
- Samtan Co., Ltd - South Korea
- Renaissance Capital - South Africa
- Karaikal Port Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Formosa Plastics Group - Taiwan
- Ministry of Mines - Canada
- Aditya Birla Group - India
- Petron Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Latin American Coal - Colombia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The University of Queensland
- Orica Mining Services - Indonesia
- Tata Chemicals Ltd - India
- PTC India Limited - India
- Bayan Resources Tbk. - Indonesia
- Bukit Baiduri Energy - Indonesia
- PowerSource Philippines DevCo
- India Bulls Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Tamil Nadu electricity Board
- Kideco Jaya Agung - Indonesia
- Romanian Commodities Exchange
- Kobexindo Tractors - Indoneisa
- LBH Netherlands Bv - Netherlands
- Globalindo Alam Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Georgia Ports Authority, United States
- Attock Cement Pakistan Limited
- Straits Asia Resources Limited - Singapore
- SN Aboitiz Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Central Java Power - Indonesia
- Banpu Public Company Limited - Thailand
- Agrawal Coal Company - India
- Borneo Indobara - Indonesia
- Economic Council, Georgia
- Marubeni Corporation - India
- Madhucon Powers Ltd - India
- Cement Manufacturers Association - India
- South Luzon Thermal Energy Corporation
- Essar Steel Hazira Ltd - India
- Jindal Steel & Power Ltd - India
- Cigading International Bulk Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bhushan Steel Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petrochimia International Co. Ltd.- Taiwan
- Maharashtra Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Sree Jayajothi Cements Limited - India
- Price Waterhouse Coopers - Russia
- MS Steel International - UAE
- Standard Chartered Bank - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Rio Tinto Coal - Australia
- Parliament of New Zealand
- Meralco Power Generation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Larsen & Toubro Limited - India
- Gujarat Sidhee Cement - India
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- Ambuja Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- PNOC Exploration Corporation - Philippines
- The State Trading Corporation of India Ltd
- Toyota Tsusho Corporation, Japan
- Kalimantan Lumbung Energi - Indonesia
- Electricity Authority, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- Orica Australia Pty. Ltd.
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement PLC, Thailand
- Coalindo Energy - Indonesia
- Planning Commission, India
- AsiaOL BioFuels Corp., Philippines
- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Independent Power Producers Association of India
- Parry Sugars Refinery, India
- GAC Shipping (India) Pvt Ltd
- Bharathi Cement Corporation - India
- Ministry of Transport, Egypt
- San Jose City I Power Corp, Philippines
- Indonesian Coal Mining Association
- Therma Luzon, Inc, Philippines
- Port Waratah Coal Services - Australia
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- Australian Coal Association
- Bhoruka Overseas - Indonesia
- Energy Link Ltd, New Zealand
- CNBM International Corporation - China
- Heidelberg Cement - Germany
- Salva Resources Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Xindia Steels Limited - India
- Indika Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Interocean Group of Companies - India
- Holcim Trading Pte Ltd - Singapore
- Antam Resourcindo - Indonesia
- Sarangani Energy Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indogreen Group - Indonesia
- Lanco Infratech Ltd - India
- Mintek Dendrill Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Kapuas Tunggal Persada - Indonesia
- Star Paper Mills Limited - India
- Sindya Power Generating Company Private Ltd
- Edison Trading Spa - Italy
- Anglo American - United Kingdom
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- Siam City Cement - Thailand
- Directorate Of Revenue Intelligence - India
- Bangladesh Power Developement Board
- SMG Consultants - Indonesia
- Chamber of Mines of South Africa
- Chettinad Cement Corporation Ltd - India
- Posco Energy - South Korea
- Mercuria Energy - Indonesia
- Australian Commodity Traders Exchange
- Trasteel International SA, Italy
- International Coal Ventures Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Gujarat Electricity Regulatory Commission - India
- Minerals Council of Australia
- Goldman Sachs - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Videocon Industries ltd - India
- McConnell Dowell - Australia
- Billiton Holdings Pty Ltd - Australia
- Thai Mozambique Logistica
- Barasentosa Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bhatia International Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Energy Development Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- ASAPP Information Group - India
- GVK Power & Infra Limited - India
- Semirara Mining Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- New Zealand Coal & Carbon
- IEA Clean Coal Centre - UK
- Eastern Coal Council - USA
- Power Finance Corporation Ltd., India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Mercator Lines Limited - India
- VISA Power Limited - India
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- SMC Global Power, Philippines
- Sakthi Sugars Limited - India
- Bukit Makmur.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coastal Gujarat Power Limited - India
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
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