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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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Sunday, 01 September 13
INDONESIA TO INDIA SPOT FREIGHT STAYS FIRM THIS WEEK - VISTAAR
COALspot.com: The freight market continued to be firm with even though the BDI and Cape index dropped by about 3 pct week on week.
The BDI was do ...
Friday, 30 August 13
US COAL PRODUCTION FELL 0.48 PERCENT WEEK ON WEEK - EIA
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.70 million short tons (mmst) of ...
Thursday, 29 August 13
HANDY: THE PACIFIC MARKET STARTED HEALTHY THIS WEEK - FEARNRESEARCH
Handy
The Pacific market started healthy this week. We have seen many bauxite, iron ore and few coal fixtures. Ships passing Singapore were able to ...
Thursday, 29 August 13
NO RATING IMPACT ON INDONESIAN ENERGY COMPANIES FROM RUPIAH DEPRECIATION - FITCH RATINGS
Fitch Ratings says the credit profiles of rated Indonesian energy and utilities companies, including thermal coal producers, will largely remain una ...
Wednesday, 28 August 13
THE BDI HAS MOVED TO LEVELS CONSIDERABLY STRONGER THAN THE BEGINNING OF THE YEAR - INTERMODAL
By George Bassakos
SnP Broker - Intermodal
We have already reached the end of August and whilst students are preparing themselves for another sc ...
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- Toyota Tsusho Corporation, Japan
- Siam City Cement - Thailand
- Vizag Seaport Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Baramulti Group, Indonesia
- Bhushan Steel Limited - India
- Bayan Resources Tbk. - Indonesia
- Uttam Galva Steels Limited - India
- Electricity Authority, New Zealand
- Bangladesh Power Developement Board
- Larsen & Toubro Limited - India
- Cigading International Bulk Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Coastal Gujarat Power Limited - India
- Bhatia International Limited - India
- Kideco Jaya Agung - Indonesia
- Formosa Plastics Group - Taiwan
- Sree Jayajothi Cements Limited - India
- GVK Power & Infra Limited - India
- Sakthi Sugars Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parry Sugars Refinery, India
- The Treasury - Australian Government
- Indogreen Group - Indonesia
- Aboitiz Power Corporation - Philippines
- Kumho Petrochemical, South Korea
- SMG Consultants - Indonesia
- European Bulk Services B.V. - Netherlands
- MS Steel International - UAE
- Cement Manufacturers Association - India
- Holcim Trading Pte Ltd - Singapore
- Riau Bara Harum - Indonesia
- Thai Mozambique Logistica
- Africa Commodities Group - South Africa
- Oldendorff Carriers - Singapore
- Essar Steel Hazira Ltd - India
- Orica Australia Pty. Ltd.
- PetroVietnam Power Coal Import and Supply Company
- Bukit Makmur.PT - Indonesia
- Medco Energi Mining Internasional
- Australian Commodity Traders Exchange
- Aditya Birla Group - India
- Bulk Trading Sa - Switzerland
- Indo Tambangraya Megah - Indonesia
- Agrawal Coal Company - India
- Savvy Resources Ltd - HongKong
- Karaikal Port Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Global Coal Blending Company Limited - Australia
- Sindya Power Generating Company Private Ltd
- Ministry of Transport, Egypt
- International Coal Ventures Pvt Ltd - India
- Minerals Council of Australia
- Chamber of Mines of South Africa
- Metalloyd Limited - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Straits Asia Resources Limited - Singapore
- Gujarat Electricity Regulatory Commission - India
- PTC India Limited - India
- PNOC Exploration Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- SMC Global Power, Philippines
- Parliament of New Zealand
- Economic Council, Georgia
- Banpu Public Company Limited - Thailand
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- ASAPP Information Group - India
- PowerSource Philippines DevCo
- Eastern Energy - Thailand
- Tamil Nadu electricity Board
- Jindal Steel & Power Ltd - India
- Kobexindo Tractors - Indoneisa
- The University of Queensland
- Rio Tinto Coal - Australia
- Samtan Co., Ltd - South Korea
- Semirara Mining Corp, Philippines
- Central Electricity Authority - India
- Australian Coal Association
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Marubeni Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Grasim Industreis Ltd - India
- Sical Logistics Limited - India
- London Commodity Brokers - England
- Georgia Ports Authority, United States
- Meenaskhi Energy Private Limited - India
- Eastern Coal Council - USA
- Vijayanagar Sugar Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Meralco Power Generation, Philippines
- Chettinad Cement Corporation Ltd - India
- Mintek Dendrill Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indonesian Coal Mining Association
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- GMR Energy Limited - India
- Independent Power Producers Association of India
- Billiton Holdings Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Port Waratah Coal Services - Australia
- Posco Energy - South Korea
- Bukit Baiduri Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Kapuas Tunggal Persada - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Petron Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Vedanta Resources Plc - India
- Sinarmas Energy and Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
- Antam Resourcindo - Indonesia
- Gujarat Sidhee Cement - India
- Barasentosa Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Edison Trading Spa - Italy
- Energy Link Ltd, New Zealand
- Attock Cement Pakistan Limited
- Globalindo Alam Lestari - Indonesia
- CNBM International Corporation - China
- Orica Mining Services - Indonesia
- Bhoruka Overseas - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Carbofer General Trading SA - India
- Merrill Lynch Commodities Europe
- Neyveli Lignite Corporation Ltd, - India
- Salva Resources Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Mjunction Services Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Sarangani Energy Corporation, Philippines
- Wilmar Investment Holdings
- Star Paper Mills Limited - India
- McConnell Dowell - Australia
- Heidelberg Cement - Germany
- Semirara Mining and Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Manunggal Multi Energi - Indonesia
- Indika Energy - Indonesia
- VISA Power Limited - India
- New Zealand Coal & Carbon
- GAC Shipping (India) Pvt Ltd
- Miang Besar Coal Terminal - Indonesia
- Romanian Commodities Exchange
- AsiaOL BioFuels Corp., Philippines
- Kepco SPC Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Wood Mackenzie - Singapore
- Gujarat Mineral Development Corp Ltd - India
- South Luzon Thermal Energy Corporation
- Ambuja Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Lanco Infratech Ltd - India
- Pendopo Energi Batubara - Indonesia
- Price Waterhouse Coopers - Russia
- Therma Luzon, Inc, Philippines
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- Deloitte Consulting - India
- Dalmia Cement Bharat India
- Altura Mining Limited, Indonesia
- White Energy Company Limited
- Renaissance Capital - South Africa
- Madhucon Powers Ltd - India
- Ministry of Mines - Canada
- The State Trading Corporation of India Ltd
- Tata Chemicals Ltd - India
- Kaltim Prima Coal - Indonesia
- Coalindo Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Xindia Steels Limited - India
- Coal and Oil Company - UAE
- Mercuria Energy - Indonesia
- Makarim & Taira - Indonesia
- Global Business Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Sojitz Corporation - Japan
- Videocon Industries ltd - India
- Interocean Group of Companies - India
- Electricity Generating Authority of Thailand
- India Bulls Power Limited - India
- Commonwealth Bank - Australia
- LBH Netherlands Bv - Netherlands
- ICICI Bank Limited - India
- Trasteel International SA, Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Planning Commission, India
- Rashtriya Ispat Nigam Limited - India
- Borneo Indobara - Indonesia
- IEA Clean Coal Centre - UK
- Energy Development Corp, Philippines
- Power Finance Corporation Ltd., India
- Mercator Lines Limited - India
- Indian Energy Exchange, India
- Anglo American - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- Directorate General of MIneral and Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- TeaM Sual Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
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