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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, 07 October 13
SGX - CFR SOUTH CHINA COAL SWAPS END ALMOST FLAT
COALspot.com : SGX has launched API 8 CFR South China Coal Swap on 29 April 2013 and SGX replaced the previous swap.
API 8 CFR South China Coal s ...
Monday, 07 October 13
Q3'14 SUB-BIT FOB INDONESIA COAL SWAP CLOSED 6.53% HIGHER THAN Q4'13
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery gained 0.53 % on day and fell 2.33 percept month on month ...
Sunday, 06 October 13
DRY BULK FREIGHT MARKET STAYS STEADY IN SPITE CHINESE HOLIDAYS - SOLYM CARRIERS SINGAPORE
COALspot.com: The freight market continued to remain firm in spite of Chinese holidays.
The BDI closed at 2,084 points on Friday 4 October or up ...
Saturday, 05 October 13
CAPESIZE EARNINGS SKYROCKET AS A RESULT OF INCREASED CHINA DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
An increased iron ore demand has triggered this latest dry bulk rally, which could get yet another boost during next week, when China is expected to ...
Friday, 04 October 13
NICKEL ORE SHIPMENTS - LESSONS LEARNED FROM LOSSES
One of the most pressing problems for the bulk shipping industry is the safe carriage of nickel ore. The increasing demand for this commodity is fue ...
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- Edison Trading Spa - Italy
- Karaikal Port Pvt Ltd - India
- Thai Mozambique Logistica
- Mintek Dendrill Indonesia
- PowerSource Philippines DevCo
- GAC Shipping (India) Pvt Ltd
- Power Finance Corporation Ltd., India
- Medco Energi Mining Internasional
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- Kumho Petrochemical, South Korea
- Vizag Seaport Private Limited - India
- Binh Thuan Hamico - Vietnam
- Barasentosa Lestari - Indonesia
- Georgia Ports Authority, United States
- Eastern Energy - Thailand
- Simpson Spence & Young - Indonesia
- European Bulk Services B.V. - Netherlands
- Star Paper Mills Limited - India
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- Tamil Nadu electricity Board
- Posco Energy - South Korea
- Ministry of Finance - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Chettinad Cement Corporation Ltd - India
- Marubeni Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- Siam City Cement PLC, Thailand
- Singapore Mercantile Exchange
- PNOC Exploration Corporation - Philippines
- Bharathi Cement Corporation - India
- Metalloyd Limited - United Kingdom
- Iligan Light & Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- The Treasury - Australian Government
- Indika Energy - Indonesia
- Heidelberg Cement - Germany
- Price Waterhouse Coopers - Russia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bangladesh Power Developement Board
- Africa Commodities Group - South Africa
- ASAPP Information Group - India
- India Bulls Power Limited - India
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Cigading International Bulk Terminal - Indonesia
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- Sarangani Energy Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Deloitte Consulting - India
- Straits Asia Resources Limited - Singapore
- Bhatia International Limited - India
- Jaiprakash Power Ventures ltd
- Malabar Cements Ltd - India
- Therma Luzon, Inc, Philippines
- Meralco Power Generation, Philippines
- IHS Mccloskey Coal Group - USA
- Planning Commission, India
- Grasim Industreis Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Parliament of New Zealand
- The University of Queensland
- Antam Resourcindo - Indonesia
- Aditya Birla Group - India
- OPG Power Generation Pvt Ltd - India
- Tata Chemicals Ltd - India
- International Coal Ventures Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Semirara Mining Corp, Philippines
- Coalindo Energy - Indonesia
- Energy Link Ltd, New Zealand
- Coastal Gujarat Power Limited - India
- Merrill Lynch Commodities Europe
- Essar Steel Hazira Ltd - India
- Indian Oil Corporation Limited
- Vedanta Resources Plc - India
- Gujarat Sidhee Cement - India
- Makarim & Taira - Indonesia
- Attock Cement Pakistan Limited
- Semirara Mining and Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- New Zealand Coal & Carbon
- Ind-Barath Power Infra Limited - India
- Uttam Galva Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SN Aboitiz Power Inc, Philippines
- Standard Chartered Bank - UAE
- Coal and Oil Company - UAE
- Gujarat Mineral Development Corp Ltd - India
- Carbofer General Trading SA - India
- London Commodity Brokers - England
- Electricity Authority, New Zealand
- PTC India Limited - India
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- Chamber of Mines of South Africa
- MS Steel International - UAE
- GVK Power & Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Kalimantan Lumbung Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Indonesian Coal Mining Association
- Kaltim Prima Coal - Indonesia
- Central Electricity Authority - India
- Vijayanagar Sugar Pvt Ltd - India
- Commonwealth Bank - Australia
- Meenaskhi Energy Private Limited - India
- Maheswari Brothers Coal Limited - India
- Banpu Public Company Limited - Thailand
- AsiaOL BioFuels Corp., Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Madhucon Powers Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Latin American Coal - Colombia
- Toyota Tsusho Corporation, Japan
- Rashtriya Ispat Nigam Limited - India
- Global Green Power PLC Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Sakthi Sugars Limited - India
- Wilmar Investment Holdings
- Videocon Industries ltd - India
- Renaissance Capital - South Africa
- Directorate Of Revenue Intelligence - India
- White Energy Company Limited
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- Economic Council, Georgia
- Mercator Lines Limited - India
- Bukit Baiduri Energy - Indonesia
- Rio Tinto Coal - Australia
- Sindya Power Generating Company Private Ltd
- Jorong Barutama Greston.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Energy Development Corp, Philippines
- Mjunction Services Limited - India
- Timah Investasi Mineral - Indoneisa
- Kobexindo Tractors - Indoneisa
- Sojitz Corporation - Japan
- Intertek Mineral Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pendopo Energi Batubara - Indonesia
- Riau Bara Harum - Indonesia
- Kepco SPC Power Corporation, Philippines
- Trasteel International SA, Italy
- Indogreen Group - Indonesia
- Larsen & Toubro Limited - India
- Australian Commodity Traders Exchange
- Romanian Commodities Exchange
- Bayan Resources Tbk. - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kideco Jaya Agung - Indonesia
- Global Business Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Formosa Plastics Group - Taiwan
- Bhoruka Overseas - Indonesia
- Global Coal Blending Company Limited - Australia
- Eastern Coal Council - USA
- Kartika Selabumi Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- Minerals Council of Australia
- IEA Clean Coal Centre - UK
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- Altura Mining Limited, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Baramulti Group, Indonesia
- Independent Power Producers Association of India
- Bulk Trading Sa - Switzerland
- Holcim Trading Pte Ltd - Singapore
- Ministry of Transport, Egypt
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wood Mackenzie - Singapore
- Orica Mining Services - Indonesia
- Agrawal Coal Company - India
- Thiess Contractors Indonesia
- Orica Australia Pty. Ltd.
- Australian Coal Association
- PetroVietnam Power Coal Import and Supply Company
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Energy Exchange, India
- TeaM Sual Corporation - Philippines
- The State Trading Corporation of India Ltd
- Indo Tambangraya Megah - Indonesia
- Dalmia Cement Bharat India
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- Salva Resources Pvt Ltd - India
- Goldman Sachs - Singapore
- Electricity Generating Authority of Thailand
- Kohat Cement Company Ltd. - Pakistan
- VISA Power Limited - India
- Ambuja Cements Ltd - India
- Borneo Indobara - Indonesia
- SMG Consultants - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- GMR Energy Limited - India
- Interocean Group of Companies - India
- South Luzon Thermal Energy Corporation
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