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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, 30 January 14
JPU SETTLEMENT PRICE AS A BENCHMARK WILL DECLINE IN IMPORTANCE BUT REMAIN RELEVANT, SAYS WOOD MACKENZIE
JPU price will remain above spot, trending closer to spot till 2015 then increasing to 2035.
Japanese Power Utilities (JPU) are approaching a cru ...
Thursday, 30 January 14
PANAMAX MARKET IS SOFTENING ON LESS ACTIVITY IN BOTH HEMISPHERES - FEARNRESEARCH
Handy
In the Atlantic rates have been slowly sliding but ows can still achieve decent money for TArv´s. USG positions still being fixed in re ...
Thursday, 30 January 14
TANKER PROFITABILITY IS THE 'MILLION-DOLLAR' QUESTION FOR SHIP OWNERS THIS YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The tanker market conditions are expected to remain challenging throughout the year for tanker owners, but even more pressing will be the issue of a ...
Tuesday, 28 January 14
GLOBAL COKING AND STEAM COAL PRODUCTION HAVE GROWN 2% TO 3% TO ABOUT 7.1 BILLION TONNES AS OF THE END OF 2013 - VDKI
COALspot.com (Press Release): Initial figures on the world hard coal market at the VDKi ((Association of Coal Importers - German) New Year’s R ...
Tuesday, 28 January 14
AUSTRALIAN NEWCASTLE PORT'S WEEKLY COAL EXPORTS JUMP 13.75% WEEK ON WEEK
COALspot.com: In the week ended 27 January 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled ...
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- Alfred C Toepfer International GmbH - Germany
- Goldman Sachs - Singapore
- Kideco Jaya Agung - Indonesia
- South Luzon Thermal Energy Corporation
- Samtan Co., Ltd - South Korea
- Aditya Birla Group - India
- Salva Resources Pvt Ltd - India
- Edison Trading Spa - Italy
- Latin American Coal - Colombia
- VISA Power Limited - India
- Trasteel International SA, Italy
- Bukit Baiduri Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Directorate Of Revenue Intelligence - India
- Gujarat Mineral Development Corp Ltd - India
- Energy Development Corp, Philippines
- Independent Power Producers Association of India
- IEA Clean Coal Centre - UK
- Ceylon Electricity Board - Sri Lanka
- Lanco Infratech Ltd - India
- Bayan Resources Tbk. - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- Malabar Cements Ltd - India
- Bhushan Steel Limited - India
- Marubeni Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Central Java Power - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- London Commodity Brokers - England
- LBH Netherlands Bv - Netherlands
- Wood Mackenzie - Singapore
- Timah Investasi Mineral - Indoneisa
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Interocean Group of Companies - India
- Cement Manufacturers Association - India
- Ind-Barath Power Infra Limited - India
- Power Finance Corporation Ltd., India
- Bhatia International Limited - India
- Agrawal Coal Company - India
- Chettinad Cement Corporation Ltd - India
- Orica Mining Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Sakthi Sugars Limited - India
- GAC Shipping (India) Pvt Ltd
- Uttam Galva Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Makmur.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Vizag Seaport Private Limited - India
- Mercator Lines Limited - India
- Xindia Steels Limited - India
- Makarim & Taira - Indonesia
- SN Aboitiz Power Inc, Philippines
- Coalindo Energy - Indonesia
- Attock Cement Pakistan Limited
- Indo Tambangraya Megah - Indonesia
- Ministry of Transport, Egypt
- Posco Energy - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Minerals Council of Australia
- Intertek Mineral Services - Indonesia
- Straits Asia Resources Limited - Singapore
- CIMB Investment Bank - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Parliament of New Zealand
- Binh Thuan Hamico - Vietnam
- Coal and Oil Company - UAE
- Sojitz Corporation - Japan
- Maheswari Brothers Coal Limited - India
- Ambuja Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
- The State Trading Corporation of India Ltd
- Central Electricity Authority - India
- Energy Link Ltd, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Borneo Indobara - Indonesia
- Kobexindo Tractors - Indoneisa
- Mercuria Energy - Indonesia
- Electricity Generating Authority of Thailand
- ICICI Bank Limited - India
- Toyota Tsusho Corporation, Japan
- Bangladesh Power Developement Board
- Merrill Lynch Commodities Europe
- Savvy Resources Ltd - HongKong
- PowerSource Philippines DevCo
- Gujarat Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Electricity Authority, New Zealand
- Eastern Energy - Thailand
- Indika Energy - Indonesia
- New Zealand Coal & Carbon
- Renaissance Capital - South Africa
- Meenaskhi Energy Private Limited - India
- Dalmia Cement Bharat India
- Parry Sugars Refinery, India
- Manunggal Multi Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Pendopo Energi Batubara - Indonesia
- Chamber of Mines of South Africa
- Indian Oil Corporation Limited
- Indogreen Group - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Australian Coal Association
- Siam City Cement - Thailand
- Medco Energi Mining Internasional
- Kohat Cement Company Ltd. - Pakistan
- Globalindo Alam Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- European Bulk Services B.V. - Netherlands
- Karaikal Port Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Commonwealth Bank - Australia
- PTC India Limited - India
- Baramulti Group, Indonesia
- India Bulls Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Thai Mozambique Logistica
- Bharathi Cement Corporation - India
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- Kepco SPC Power Corporation, Philippines
- Tamil Nadu electricity Board
- Formosa Plastics Group - Taiwan
- Krishnapatnam Port Company Ltd. - India
- Coastal Gujarat Power Limited - India
- Star Paper Mills Limited - India
- Jaiprakash Power Ventures ltd
- Port Waratah Coal Services - Australia
- Indian Energy Exchange, India
- Australian Commodity Traders Exchange
- Sinarmas Energy and Mining - Indonesia
- Economic Council, Georgia
- AsiaOL BioFuels Corp., Philippines
- SMC Global Power, Philippines
- MS Steel International - UAE
- Sindya Power Generating Company Private Ltd
- Oldendorff Carriers - Singapore
- Carbofer General Trading SA - India
- TeaM Sual Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Rio Tinto Coal - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Bulk Trading Sa - Switzerland
- Metalloyd Limited - United Kingdom
- Planning Commission, India
- GMR Energy Limited - India
- International Coal Ventures Pvt Ltd - India
- Ministry of Mines - Canada
- Gujarat Sidhee Cement - India
- Altura Mining Limited, Indonesia
- Grasim Industreis Ltd - India
- Mintek Dendrill Indonesia
- Global Coal Blending Company Limited - Australia
- PNOC Exploration Corporation - Philippines
- GVK Power & Infra Limited - India
- SMG Consultants - Indonesia
- Meralco Power Generation, Philippines
- Africa Commodities Group - South Africa
- The Treasury - Australian Government
- Ministry of Finance - Indonesia
- Kartika Selabumi Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- White Energy Company Limited
- San Jose City I Power Corp, Philippines
- CNBM International Corporation - China
- Eastern Coal Council - USA
- Thiess Contractors Indonesia
- Riau Bara Harum - Indonesia
- Orica Australia Pty. Ltd.
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Semirara Mining Corp, Philippines
- Singapore Mercantile Exchange
- Indonesian Coal Mining Association
- Georgia Ports Authority, United States
- Global Business Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- The University of Queensland
- Heidelberg Cement - Germany
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- Simpson Spence & Young - Indonesia
- Wilmar Investment Holdings
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Karbindo Abesyapradhi - Indoneisa
- Deloitte Consulting - India
- Sical Logistics Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Banpu Public Company Limited - Thailand
- Videocon Industries ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kalimantan Lumbung Energi - Indonesia
- ASAPP Information Group - India
- Mjunction Services Limited - India
- Barasentosa Lestari - Indonesia
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