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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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Thursday, 22 August 13
PANAMAX : PERIOD MARKET IS STILL BEING LED BY STRONGER SENTIMENT IN THE FFA'S - FEARNRESEARCH
Handy
This week started slowly as expected. Indo biz now rate APS around 7k +60k to china and around 8k+80k to India. However, there are some ships ...
Wednesday, 21 August 13
DRY BULK SHIPPING - POSITIVE WINDOW FOR CAPESIZE OWNERS - PETER SAND
By: Peter Sand, Chief Shipping Analyst, BIMCO
Demand:
“Expect the unexpected from the dry bulk market” was what we wrote last time ar ...
Wednesday, 21 August 13
RATES FOR CAPES MOVED DECISIVELY NORTH THIS WEEK - INTERMODAL
COALspot.com - Right when the BDI seemed ready for another dive below the 1000 points level, the Dry Bulk market made significant comeback this week ...
Tuesday, 20 August 13
AUSTRALIA NEWCASTLE COAL EXPORTS FALL 19.15 PERCENT ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port fell 19.15 per cent week on week to 2.39 million mt f ...
Tuesday, 20 August 13
CAPESIZE RATES MORE SENSITIVE TO DEMAND - COMMODORE RESEARCH & CONSULTANCY
COALspot.com : Approximately 71.50 million tons of iron ore is now stockpiled at Chinese ports, 900,000 tons (-1%) less than a week ago, Commodore R ...
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- Salva Resources Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Australian Commodity Traders Exchange
- India Bulls Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Dalmia Cement Bharat India
- Makarim & Taira - Indonesia
- Mjunction Services Limited - India
- TeaM Sual Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Wilmar Investment Holdings
- Bharathi Cement Corporation - India
- Riau Bara Harum - Indonesia
- Kumho Petrochemical, South Korea
- Videocon Industries ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Electricity Generating Authority of Thailand
- Parliament of New Zealand
- Coal and Oil Company - UAE
- Meenaskhi Energy Private Limited - India
- Oldendorff Carriers - Singapore
- Madhucon Powers Ltd - India
- Bhatia International Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Central Electricity Authority - India
- White Energy Company Limited
- Grasim Industreis Ltd - India
- Deloitte Consulting - India
- MS Steel International - UAE
- Thiess Contractors Indonesia
- Ceylon Electricity Board - Sri Lanka
- ASAPP Information Group - India
- LBH Netherlands Bv - Netherlands
- Bulk Trading Sa - Switzerland
- Ind-Barath Power Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Toyota Tsusho Corporation, Japan
- PNOC Exploration Corporation - Philippines
- Xindia Steels Limited - India
- Antam Resourcindo - Indonesia
- Indonesian Coal Mining Association
- Manunggal Multi Energi - Indonesia
- SMG Consultants - Indonesia
- Singapore Mercantile Exchange
- Eastern Coal Council - USA
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- PowerSource Philippines DevCo
- Iligan Light & Power Inc, Philippines
- PTC India Limited - India
- Samtan Co., Ltd - South Korea
- Malabar Cements Ltd - India
- Georgia Ports Authority, United States
- Minerals Council of Australia
- Trasteel International SA, Italy
- Borneo Indobara - Indonesia
- Formosa Plastics Group - Taiwan
- Kepco SPC Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Carbofer General Trading SA - India
- Vizag Seaport Private Limited - India
- Karaikal Port Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Lanco Infratech Ltd - India
- London Commodity Brokers - England
- Marubeni Corporation - India
- Maheswari Brothers Coal Limited - India
- Kobexindo Tractors - Indoneisa
- Orica Australia Pty. Ltd.
- Energy Development Corp, Philippines
- IEA Clean Coal Centre - UK
- SN Aboitiz Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Mercuria Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- Australian Coal Association
- Kaltim Prima Coal - Indonesia
- The Treasury - Australian Government
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Energy Link Ltd, New Zealand
- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
- Commonwealth Bank - Australia
- Kideco Jaya Agung - Indonesia
- Savvy Resources Ltd - HongKong
- Orica Mining Services - Indonesia
- Romanian Commodities Exchange
- Larsen & Toubro Limited - India
- SMC Global Power, Philippines
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Rio Tinto Coal - Australia
- Attock Cement Pakistan Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement PLC, Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Jaiprakash Power Ventures ltd
- Kapuas Tunggal Persada - Indonesia
- Merrill Lynch Commodities Europe
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- Bukit Baiduri Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Meralco Power Generation, Philippines
- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Ambuja Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Directorate Of Revenue Intelligence - India
- Vedanta Resources Plc - India
- Bangladesh Power Developement Board
- Thai Mozambique Logistica
- Indika Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Africa Commodities Group - South Africa
- New Zealand Coal & Carbon
- Anglo American - United Kingdom
- South Luzon Thermal Energy Corporation
- Sical Logistics Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- IHS Mccloskey Coal Group - USA
- Alfred C Toepfer International GmbH - Germany
- International Coal Ventures Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Krishnapatnam Port Company Ltd. - India
- Metalloyd Limited - United Kingdom
- Coalindo Energy - Indonesia
- Renaissance Capital - South Africa
- Power Finance Corporation Ltd., India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- San Jose City I Power Corp, Philippines
- Independent Power Producers Association of India
- Bhushan Steel Limited - India
- Semirara Mining Corp, Philippines
- Chamber of Mines of South Africa
- Aditya Birla Group - India
- Straits Asia Resources Limited - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- The State Trading Corporation of India Ltd
- Parry Sugars Refinery, India
- Indo Tambangraya Megah - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Global Green Power PLC Corporation, Philippines
- CIMB Investment Bank - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- VISA Power Limited - India
- Baramulti Group, Indonesia
- Star Paper Mills Limited - India
- Gujarat Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- AsiaOL BioFuels Corp., Philippines
- Jindal Steel & Power Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Finance - Indonesia
- Timah Investasi Mineral - Indoneisa
- CNBM International Corporation - China
- Therma Luzon, Inc, Philippines
- Heidelberg Cement - Germany
- Directorate General of MIneral and Coal - Indonesia
- Sakthi Sugars Limited - India
- GMR Energy Limited - India
- Holcim Trading Pte Ltd - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- Ministry of Mines - Canada
- Economic Council, Georgia
- Sindya Power Generating Company Private Ltd
- Sinarmas Energy and Mining - Indonesia
- Posco Energy - South Korea
- Port Waratah Coal Services - Australia
- Altura Mining Limited, Indonesia
- GVK Power & Infra Limited - India
- Planning Commission, India
- Agrawal Coal Company - India
- Petron Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Tamil Nadu electricity Board
- Wood Mackenzie - Singapore
- Indogreen Group - Indonesia
- Goldman Sachs - Singapore
- Uttam Galva Steels Limited - India
- Intertek Mineral Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- The University of Queensland
- Mintek Dendrill Indonesia
- Ministry of Transport, Egypt
- Essar Steel Hazira Ltd - India
- OPG Power Generation Pvt Ltd - India
- Medco Energi Mining Internasional
- Eastern Energy - Thailand
- Tata Chemicals Ltd - India
- Barasentosa Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Indian Oil Corporation Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Energy Exchange, India
- Jorong Barutama Greston.PT - Indonesia
- Latin American Coal - Colombia
- Cement Manufacturers Association - India
- Central Java Power - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Binh Thuan Hamico - Vietnam
- Standard Chartered Bank - UAE
- Edison Trading Spa - Italy
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