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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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- Tata Chemicals Ltd - India
- Anglo American - United Kingdom
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- Ind-Barath Power Infra Limited - India
- Bangladesh Power Developement Board
- Toyota Tsusho Corporation, Japan
- Renaissance Capital - South Africa
- Lanco Infratech Ltd - India
- Edison Trading Spa - Italy
- Mintek Dendrill Indonesia
- Standard Chartered Bank - UAE
- Attock Cement Pakistan Limited
- Manunggal Multi Energi - Indonesia
- Romanian Commodities Exchange
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- Singapore Mercantile Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Latin American Coal - Colombia
- Madhucon Powers Ltd - India
- Borneo Indobara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Malabar Cements Ltd - India
- Economic Council, Georgia
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- Goldman Sachs - Singapore
- Globalindo Alam Lestari - Indonesia
- Larsen & Toubro Limited - India
- Merrill Lynch Commodities Europe
- Bukit Baiduri Energy - Indonesia
- Mjunction Services Limited - India
- European Bulk Services B.V. - Netherlands
- Indo Tambangraya Megah - Indonesia
- McConnell Dowell - Australia
- Riau Bara Harum - Indonesia
- Star Paper Mills Limited - India
- Cigading International Bulk Terminal - Indonesia
- Xindia Steels Limited - India
- Simpson Spence & Young - Indonesia
- White Energy Company Limited
- Central Electricity Authority - India
- Mercuria Energy - Indonesia
- PowerSource Philippines DevCo
- Independent Power Producers Association of India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Transport, Egypt
- Carbofer General Trading SA - India
- Siam City Cement - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- South Luzon Thermal Energy Corporation
- IEA Clean Coal Centre - UK
- Bhoruka Overseas - Indonesia
- Siam City Cement PLC, Thailand
- Antam Resourcindo - Indonesia
- Thiess Contractors Indonesia
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- Agrawal Coal Company - India
- Indian Oil Corporation Limited
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Sojitz Corporation - Japan
- Gujarat Sidhee Cement - India
- Billiton Holdings Pty Ltd - Australia
- Electricity Authority, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Electricity Generating Authority of Thailand
- Sindya Power Generating Company Private Ltd
- Directorate Of Revenue Intelligence - India
- Bahari Cakrawala Sebuku - Indonesia
- The State Trading Corporation of India Ltd
- Thai Mozambique Logistica
- Gujarat Mineral Development Corp Ltd - India
- Meralco Power Generation, Philippines
- Parliament of New Zealand
- ASAPP Information Group - India
- VISA Power Limited - India
- Banpu Public Company Limited - Thailand
- The Treasury - Australian Government
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Wilmar Investment Holdings
- International Coal Ventures Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Dalmia Cement Bharat India
- Trasteel International SA, Italy
- Vizag Seaport Private Limited - India
- Price Waterhouse Coopers - Russia
- Bharathi Cement Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- Energy Link Ltd, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- Ministry of Finance - Indonesia
- Therma Luzon, Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- India Bulls Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- Bhatia International Limited - India
- LBH Netherlands Bv - Netherlands
- Makarim & Taira - Indonesia
- Orica Mining Services - Indonesia
- Videocon Industries ltd - India
- Indogreen Group - Indonesia
- Grasim Industreis Ltd - India
- Marubeni Corporation - India
- Australian Coal Association
- CIMB Investment Bank - Malaysia
- SMG Consultants - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Posco Energy - South Korea
- Ambuja Cements Ltd - India
- ICICI Bank Limited - India
- Kaltim Prima Coal - Indonesia
- Coal and Oil Company - UAE
- Baramulti Group, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kobexindo Tractors - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Tamil Nadu electricity Board
- Coastal Gujarat Power Limited - India
- MS Steel International - UAE
- Bayan Resources Tbk. - Indonesia
- Essar Steel Hazira Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Global Business Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Africa Commodities Group - South Africa
- Aditya Birla Group - India
- OPG Power Generation Pvt Ltd - India
- Ministry of Mines - Canada
- PNOC Exploration Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Uttam Galva Steels Limited - India
- Intertek Mineral Services - Indonesia
- Central Java Power - Indonesia
- Savvy Resources Ltd - HongKong
- Heidelberg Cement - Germany
- GMR Energy Limited - India
- PTC India Limited - India
- SN Aboitiz Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Krishnapatnam Port Company Ltd. - India
- New Zealand Coal & Carbon
- Bukit Makmur.PT - Indonesia
- Kumho Petrochemical, South Korea
- Orica Australia Pty. Ltd.
- Global Coal Blending Company Limited - Australia
- Holcim Trading Pte Ltd - Singapore
- Deloitte Consulting - India
- Bulk Trading Sa - Switzerland
- Rio Tinto Coal - Australia
- Kepco SPC Power Corporation, Philippines
- Energy Development Corp, Philippines
- Petron Corporation, Philippines
- Medco Energi Mining Internasional
- Straits Asia Resources Limited - Singapore
- Pendopo Energi Batubara - Indonesia
- Samtan Co., Ltd - South Korea
- Jaiprakash Power Ventures ltd
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- Sical Logistics Limited - India
- The University of Queensland
- Indonesian Coal Mining Association
- Kartika Selabumi Mining - Indonesia
- Salva Resources Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Bhushan Steel Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chamber of Mines of South Africa
- PetroVietnam Power Coal Import and Supply Company
- Minerals Council of Australia
- Oldendorff Carriers - Singapore
- TeaM Sual Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- IHS Mccloskey Coal Group - USA
- Indian Energy Exchange, India
- Port Waratah Coal Services - Australia
- Altura Mining Limited, Indonesia
- Sree Jayajothi Cements Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- Eastern Coal Council - USA
- Semirara Mining and Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Wood Mackenzie - Singapore
- Metalloyd Limited - United Kingdom
- Indika Energy - Indonesia
- Eastern Energy - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- GAC Shipping (India) Pvt Ltd
- Semirara Mining Corp, Philippines
- Barasentosa Lestari - Indonesia
- London Commodity Brokers - England
- Parry Sugars Refinery, India
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