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