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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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Saturday, 27 July 13
INDONESIA TO INDIA SUPRAMAX FREIGHT RATES ARE EXPECTED TO REMAIN STEADY - CAPT.REDDY
COALspot.com : The freight market seemed to soften this week with BDI , Cape and Panamax indices dropped average 5 percent on week.
The BDI was d ...
Thursday, 25 July 13
CAPESIZE : PACIFIC AND ATLANTIC RATES ARE HOLDING STEADY - FEARNLEYS AS
Handy
The Far East market remains quiet even if some Indo coal trip orders were fed in the market at early this week. Prompt ships passing Singapor ...
Thursday, 25 July 13
SUMMER LULL CHIPPING AWAY RECENT GAINS IN DRY BULK FREIGHT RATES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
In what seems to be establishing as a permanent trend, at least for the time being, the dry bulk market kept on retreating yesterday, even if this r ...
Tuesday, 23 July 13
NEWCASTLE'S COAL EXPORTS CLIMB 17.82% ON WEEK, PORT'S DATA SHOWS
COALspot.com: Newcastle port in Australia has loaded 3,369,865 tons of coal for the week ended 0700 hours 22 July 2013, Newcastle Port Corp. s ...
Monday, 22 July 13
DRY BULK MARKET DIFFICULT TO MAINTAIN POSITIVE DRIVE CLAIMS SHIPBROKER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has seen a significant recovery in recent weeks, leading most ship classes to earnings above their operating expenses, thus brin ...
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- PTC India Limited - India
- Kobexindo Tractors - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Larsen & Toubro Limited - India
- Kaltim Prima Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Orica Australia Pty. Ltd.
- Central Java Power - Indonesia
- Uttam Galva Steels Limited - India
- PowerSource Philippines DevCo
- Sical Logistics Limited - India
- London Commodity Brokers - England
- Toyota Tsusho Corporation, Japan
- Tamil Nadu electricity Board
- Madhucon Powers Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Africa Commodities Group - South Africa
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- Alfred C Toepfer International GmbH - Germany
- The University of Queensland
- Miang Besar Coal Terminal - Indonesia
- Sakthi Sugars Limited - India
- White Energy Company Limited
- Indo Tambangraya Megah - Indonesia
- Energy Link Ltd, New Zealand
- Coastal Gujarat Power Limited - India
- Mjunction Services Limited - India
- Latin American Coal - Colombia
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Ministry of Mines - Canada
- OPG Power Generation Pvt Ltd - India
- Heidelberg Cement - Germany
- SMC Global Power, Philippines
- Economic Council, Georgia
- Energy Development Corp, Philippines
- Georgia Ports Authority, United States
- Goldman Sachs - Singapore
- Siam City Cement - Thailand
- Ind-Barath Power Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Romanian Commodities Exchange
- Mercator Lines Limited - India
- Australian Coal Association
- SN Aboitiz Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Deloitte Consulting - India
- Bukit Baiduri Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Tata Chemicals Ltd - India
- AsiaOL BioFuels Corp., Philippines
- MS Steel International - UAE
- Borneo Indobara - Indonesia
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- Standard Chartered Bank - UAE
- Wilmar Investment Holdings
- The State Trading Corporation of India Ltd
- Global Business Power Corporation, Philippines
- Indogreen Group - Indonesia
- Carbofer General Trading SA - India
- Bhatia International Limited - India
- Global Coal Blending Company Limited - Australia
- Timah Investasi Mineral - Indoneisa
- Electricity Authority, New Zealand
- Electricity Generating Authority of Thailand
- Sindya Power Generating Company Private Ltd
- LBH Netherlands Bv - Netherlands
- Bayan Resources Tbk. - Indonesia
- Therma Luzon, Inc, Philippines
- Parry Sugars Refinery, India
- Ministry of Transport, Egypt
- Formosa Plastics Group - Taiwan
- Orica Mining Services - Indonesia
- Videocon Industries ltd - India
- Planning Commission, India
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Bulk Trading Sa - Switzerland
- Ambuja Cements Ltd - India
- Commonwealth Bank - Australia
- Attock Cement Pakistan Limited
- Leighton Contractors Pty Ltd - Australia
- Interocean Group of Companies - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Commodity Traders Exchange
- Rashtriya Ispat Nigam Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhushan Steel Limited - India
- Thiess Contractors Indonesia
- Mercuria Energy - Indonesia
- Riau Bara Harum - Indonesia
- Chamber of Mines of South Africa
- Binh Thuan Hamico - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- Indika Energy - Indonesia
- Parliament of New Zealand
- Jindal Steel & Power Ltd - India
- IHS Mccloskey Coal Group - USA
- Vizag Seaport Private Limited - India
- Iligan Light & Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Merrill Lynch Commodities Europe
- Semirara Mining Corp, Philippines
- Sree Jayajothi Cements Limited - India
- VISA Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Baramulti Group, Indonesia
- India Bulls Power Limited - India
- Chettinad Cement Corporation Ltd - India
- ASAPP Information Group - India
- GVK Power & Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Posco Energy - South Korea
- San Jose City I Power Corp, Philippines
- Cement Manufacturers Association - India
- Jaiprakash Power Ventures ltd
- Indian Oil Corporation Limited
- South Luzon Thermal Energy Corporation
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- Bharathi Cement Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Karaikal Port Pvt Ltd - India
- CNBM International Corporation - China
- Bangladesh Power Developement Board
- Rio Tinto Coal - Australia
- The Treasury - Australian Government
- Neyveli Lignite Corporation Ltd, - India
- Lanco Infratech Ltd - India
- Thai Mozambique Logistica
- SMG Consultants - Indonesia
- Altura Mining Limited, Indonesia
- Bhoruka Overseas - Indonesia
- Eastern Energy - Thailand
- New Zealand Coal & Carbon
- Kartika Selabumi Mining - Indonesia
- Indonesian Coal Mining Association
- Kideco Jaya Agung - Indonesia
- Power Finance Corporation Ltd., India
- Xindia Steels Limited - India
- Vedanta Resources Plc - India
- Gujarat Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- GAC Shipping (India) Pvt Ltd
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Central Electricity Authority - India
- Sarangani Energy Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Salva Resources Pvt Ltd - India
- Agrawal Coal Company - India
- Samtan Co., Ltd - South Korea
- Marubeni Corporation - India
- Meenaskhi Energy Private Limited - India
- PNOC Exploration Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Aboitiz Power Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Eastern Coal Council - USA
- Semirara Mining and Power Corporation, Philippines
- Malabar Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Indian Energy Exchange, India
- Kumho Petrochemical, South Korea
- Singapore Mercantile Exchange
- Savvy Resources Ltd - HongKong
- McConnell Dowell - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Minerals Council of Australia
- Sojitz Corporation - Japan
- Straits Asia Resources Limited - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- Anglo American - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Meralco Power Generation, Philippines
- Manunggal Multi Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Aditya Birla Group - India
- Banpu Public Company Limited - Thailand
- European Bulk Services B.V. - Netherlands
- Ministry of Finance - Indonesia
- Makarim & Taira - Indonesia
- Grasim Industreis Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Edison Trading Spa - Italy
- Antam Resourcindo - Indonesia
- Wood Mackenzie - Singapore
- Holcim Trading Pte Ltd - Singapore
- Kapuas Tunggal Persada - Indonesia
- TeaM Sual Corporation - Philippines
- IEA Clean Coal Centre - UK
- Bukit Makmur.PT - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- ICICI Bank Limited - India
- Dalmia Cement Bharat India
- Trasteel International SA, Italy
- Barasentosa Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Coalindo Energy - Indonesia
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