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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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Wednesday, 02 October 13
HOW LONG WILL THIS LATEST CAPESIZE RALLY LAST? - TASOS PAPADOPOULOS
By Tasos Papadopoulos, SnP Broker, Intermodal
The surge in iron ore trade has translated into a massive boost in daily earnings for capes; with t ...
Tuesday, 01 October 13
DRY BULK MARKET POISED FOR RETREAT ON CHINA HOLIDAY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The start of a national weeklong in China as of Tuesday is expected to put a lid in the latest rally of the dry bulk freight market, as has always b ...
Monday, 30 September 13
NEWCASTLE'S COAL EXPORT VOLUME CONTINUES TO SLIP
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port fell 8.38 per cent week on week to 2.67 million mt fo ...
Monday, 30 September 13
PANAMAX CHARTER RATES TOUCHING US$ 18K FOR A TRIP TO NOPAC - CAPT. REDDY
COALspot.com : The freight market continued to remain firm, BDI and the Panamax index up week ended 27 September 2013.
The cape index was fell to ...
Sunday, 29 September 13
API 8 CFR SOUTH CHINA COAL Q3 2014 DELIVERY SWAP GAINED $1.19 M-O-M
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 ...
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- Maharashtra Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Mintek Dendrill Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Indian Oil Corporation Limited
- Parliament of New Zealand
- Manunggal Multi Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Singapore Mercantile Exchange
- Ministry of Transport, Egypt
- Barasentosa Lestari - Indonesia
- Oldendorff Carriers - Singapore
- South Luzon Thermal Energy Corporation
- Vedanta Resources Plc - India
- Rashtriya Ispat Nigam Limited - India
- Australian Coal Association
- Alfred C Toepfer International GmbH - Germany
- Kalimantan Lumbung Energi - Indonesia
- Central Electricity Authority - India
- Planning Commission, India
- Straits Asia Resources Limited - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Makarim & Taira - Indonesia
- Bukit Makmur.PT - Indonesia
- Semirara Mining Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- PTC India Limited - India
- Romanian Commodities Exchange
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- ASAPP Information Group - India
- Neyveli Lignite Corporation Ltd, - India
- Wilmar Investment Holdings
- New Zealand Coal & Carbon
- Leighton Contractors Pty Ltd - Australia
- Sojitz Corporation - Japan
- Independent Power Producers Association of India
- Medco Energi Mining Internasional
- MS Steel International - UAE
- Banpu Public Company Limited - Thailand
- Sindya Power Generating Company Private Ltd
- SMG Consultants - Indonesia
- TeaM Sual Corporation - Philippines
- Thiess Contractors Indonesia
- Electricity Authority, New Zealand
- Standard Chartered Bank - UAE
- GVK Power & Infra Limited - India
- Savvy Resources Ltd - HongKong
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Interocean Group of Companies - India
- Chamber of Mines of South Africa
- Central Java Power - Indonesia
- Mjunction Services Limited - India
- Ind-Barath Power Infra Limited - India
- Dalmia Cement Bharat India
- Mercuria Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- SMC Global Power, Philippines
- OPG Power Generation Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- McConnell Dowell - Australia
- Ambuja Cements Ltd - India
- Meralco Power Generation, Philippines
- London Commodity Brokers - England
- Billiton Holdings Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Renaissance Capital - South Africa
- Intertek Mineral Services - Indonesia
- Bhatia International Limited - India
- The University of Queensland
- Coalindo Energy - Indonesia
- Samtan Co., Ltd - South Korea
- GMR Energy Limited - India
- Mercator Lines Limited - India
- Indian Energy Exchange, India
- Bahari Cakrawala Sebuku - Indonesia
- Edison Trading Spa - Italy
- Kartika Selabumi Mining - Indonesia
- Cement Manufacturers Association - India
- Tamil Nadu electricity Board
- Bhoruka Overseas - Indonesia
- Grasim Industreis Ltd - India
- Uttam Galva Steels Limited - India
- Altura Mining Limited, Indonesia
- Sical Logistics Limited - India
- Salva Resources Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Karbindo Abesyapradhi - Indoneisa
- Sree Jayajothi Cements Limited - India
- Merrill Lynch Commodities Europe
- Jaiprakash Power Ventures ltd
- Orica Australia Pty. Ltd.
- SN Aboitiz Power Inc, Philippines
- Bangladesh Power Developement Board
- Baramulti Group, Indonesia
- Tata Chemicals Ltd - India
- Siam City Cement - Thailand
- Madhucon Powers Ltd - India
- Electricity Generating Authority of Thailand
- Aditya Birla Group - India
- Pendopo Energi Batubara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Iligan Light & Power Inc, Philippines
- Commonwealth Bank - Australia
- PNOC Exploration Corporation - Philippines
- Xindia Steels Limited - India
- Attock Cement Pakistan Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Sakthi Sugars Limited - India
- White Energy Company Limited
- Vijayanagar Sugar Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Economic Council, Georgia
- Indogreen Group - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Australian Commodity Traders Exchange
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- India Bulls Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Indonesian Coal Mining Association
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Rio Tinto Coal - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Deloitte Consulting - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The Treasury - Australian Government
- Port Waratah Coal Services - Australia
- Energy Link Ltd, New Zealand
- Bulk Trading Sa - Switzerland
- Asmin Koalindo Tuhup - Indonesia
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- Orica Mining Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- IEA Clean Coal Centre - UK
- Coastal Gujarat Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Thai Mozambique Logistica
- Global Coal Blending Company Limited - Australia
- CNBM International Corporation - China
- Kumho Petrochemical, South Korea
- Kapuas Tunggal Persada - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Latin American Coal - Colombia
- Larsen & Toubro Limited - India
- Eastern Energy - Thailand
- PetroVietnam Power Coal Import and Supply Company
- ICICI Bank Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- Agrawal Coal Company - India
- Toyota Tsusho Corporation, Japan
- Star Paper Mills Limited - India
- Kideco Jaya Agung - Indonesia
- Heidelberg Cement - Germany
- Globalindo Alam Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Indo Tambangraya Megah - Indonesia
- Krishnapatnam Port Company Ltd. - India
- The State Trading Corporation of India Ltd
- Binh Thuan Hamico - Vietnam
- Indika Energy - Indonesia
- Georgia Ports Authority, United States
- Price Waterhouse Coopers - Russia
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- Bukit Baiduri Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Africa Commodities Group - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Malabar Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- Posco Energy - South Korea
- Marubeni Corporation - India
- Carbofer General Trading SA - India
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- Timah Investasi Mineral - Indoneisa
- Karaikal Port Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Minerals Council of Australia
- Maheswari Brothers Coal Limited - India
- Energy Development Corp, Philippines
- CIMB Investment Bank - Malaysia
- Directorate Of Revenue Intelligence - India
- Bhushan Steel Limited - India
- Jindal Steel & Power Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Borneo Indobara - Indonesia
- Vizag Seaport Private Limited - India
- Coal and Oil Company - UAE
- Anglo American - United Kingdom
- GAC Shipping (India) Pvt Ltd
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