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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, 18 July 13
DRY BULK MARKETS RETAINS RECENT GAINS, MOVES SIDEWAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept on moving sideways this week, as evidenced by the latest trends of the industry's benchmark, the Baltic Dry Index (BDI ...
Wednesday, 17 July 13
NEWCASTLE COAL EXPORTS FELL 3.85% ON WEEK
COALspot.com: Newcastle port in Australia has loaded 2,860,149 tons of coal for the week ended 0700 hours 15 July 2013, Newcastle Port Corp. s ...
Wednesday, 17 July 13
TORN BETWEEN A CREDIT CRUNCH AND SUSTAINABLE GROWTH - GEORGE DERMATIS
COALspot.com: In 2012 China expanded at a rate of 7.8%, its worst annual performance in 13 years, raising criticism over the newly appointed governm ...
Tuesday, 16 July 13
TAKE - OR - PAY CONTRACTS CONTINUE TO INCENTIVISE AUSTRALIAN COAL PRODUCERS DESPITE POTENTIAL NEGATIVE CASH MARGINS - WOOD MACKENZIE
Australia's coal production has continued to grow, despite lower coal prices in 2013. Global investors and suppliers are therefore questioning whet ...
Monday, 15 July 13
INDONESIAN GOVERNMENT HAS REVISED DOWN ITS JULY BENCH-MARK COAL PRICE TO US$ 81.69 PER MT
COALspot. com - Indonesian Coal Price Reference dropped 3.75 % and hitting a 2013 low. The Indonesian government has revised down its owned coal ben ...
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- Mjunction Services Limited - India
- Merrill Lynch Commodities Europe
- Parry Sugars Refinery, India
- Energy Link Ltd, New Zealand
- Sojitz Corporation - Japan
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Coal Council - USA
- Rio Tinto Coal - Australia
- PNOC Exploration Corporation - Philippines
- Madhucon Powers Ltd - India
- Oldendorff Carriers - Singapore
- Gujarat Sidhee Cement - India
- Formosa Plastics Group - Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Wood Mackenzie - Singapore
- Indogreen Group - Indonesia
- Malabar Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Price Waterhouse Coopers - Russia
- New Zealand Coal & Carbon
- Central Electricity Authority - India
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Altura Mining Limited, Indonesia
- Dalmia Cement Bharat India
- Jaiprakash Power Ventures ltd
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement PLC, Thailand
- The University of Queensland
- Petrochimia International Co. Ltd.- Taiwan
- Star Paper Mills Limited - India
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- Economic Council, Georgia
- Africa Commodities Group - South Africa
- Antam Resourcindo - Indonesia
- Mercator Lines Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Australia Pty. Ltd.
- Vijayanagar Sugar Pvt Ltd - India
- Bhushan Steel Limited - India
- Petron Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Deloitte Consulting - India
- Ceylon Electricity Board - Sri Lanka
- SMG Consultants - Indonesia
- Heidelberg Cement - Germany
- Port Waratah Coal Services - Australia
- Sree Jayajothi Cements Limited - India
- Baramulti Group, Indonesia
- Salva Resources Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
- Bangladesh Power Developement Board
- Coastal Gujarat Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Globalindo Alam Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Manunggal Multi Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Billiton Holdings Pty Ltd - Australia
- Bhatia International Limited - India
- Semirara Mining and Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vedanta Resources Plc - India
- Medco Energi Mining Internasional
- Bayan Resources Tbk. - Indonesia
- Kumho Petrochemical, South Korea
- Simpson Spence & Young - Indonesia
- South Luzon Thermal Energy Corporation
- Barasentosa Lestari - Indonesia
- Marubeni Corporation - India
- Riau Bara Harum - Indonesia
- Independent Power Producers Association of India
- Global Business Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Singapore Mercantile Exchange
- Lanco Infratech Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Bulk Trading Sa - Switzerland
- Ind-Barath Power Infra Limited - India
- Latin American Coal - Colombia
- Makarim & Taira - Indonesia
- Siam City Cement - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Sakthi Sugars Limited - India
- Standard Chartered Bank - UAE
- Vizag Seaport Private Limited - India
- IEA Clean Coal Centre - UK
- Kalimantan Lumbung Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Georgia Ports Authority, United States
- Banpu Public Company Limited - Thailand
- ICICI Bank Limited - India
- Edison Trading Spa - Italy
- Energy Development Corp, Philippines
- Power Finance Corporation Ltd., India
- Kartika Selabumi Mining - Indonesia
- Eastern Energy - Thailand
- Tamil Nadu electricity Board
- Coalindo Energy - Indonesia
- VISA Power Limited - India
- CNBM International Corporation - China
- Romanian Commodities Exchange
- Sical Logistics Limited - India
- Minerals Council of Australia
- Australian Commodity Traders Exchange
- SMC Global Power, Philippines
- Kideco Jaya Agung - Indonesia
- Therma Luzon, Inc, Philippines
- Goldman Sachs - Singapore
- Electricity Authority, New Zealand
- Samtan Co., Ltd - South Korea
- Indonesian Coal Mining Association
- Attock Cement Pakistan Limited
- Thiess Contractors Indonesia
- Bukit Makmur.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Ministry of Transport, Egypt
- Kapuas Tunggal Persada - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Savvy Resources Ltd - HongKong
- Indo Tambangraya Megah - Indonesia
- Thai Mozambique Logistica
- Orica Mining Services - Indonesia
- MS Steel International - UAE
- Planning Commission, India
- Sindya Power Generating Company Private Ltd
- Global Green Power PLC Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Jorong Barutama Greston.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Parliament of New Zealand
- Electricity Generating Authority of Thailand
- OPG Power Generation Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Commonwealth Bank - Australia
- PowerSource Philippines DevCo
- India Bulls Power Limited - India
- Maheswari Brothers Coal Limited - India
- Mintek Dendrill Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Trasteel International SA, Italy
- Carbofer General Trading SA - India
- Videocon Industries ltd - India
- Interocean Group of Companies - India
- Neyveli Lignite Corporation Ltd, - India
- Cement Manufacturers Association - India
- Wilmar Investment Holdings
- Meenaskhi Energy Private Limited - India
- GVK Power & Infra Limited - India
- PTC India Limited - India
- Aboitiz Power Corporation - Philippines
- Indian Energy Exchange, India
- TeaM Sual Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Anglo American - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Ministry of Mines - Canada
- Chamber of Mines of South Africa
- Intertek Mineral Services - Indonesia
- Grasim Industreis Ltd - India
- IHS Mccloskey Coal Group - USA
- GN Power Mariveles Coal Plant, Philippines
- Xindia Steels Limited - India
- Ministry of Finance - Indonesia
- European Bulk Services B.V. - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Coal and Oil Company - UAE
- Borneo Indobara - Indonesia
- Bhoruka Overseas - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Karbindo Abesyapradhi - Indoneisa
- London Commodity Brokers - England
- Kepco SPC Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Ambuja Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indika Energy - Indonesia
- Agrawal Coal Company - India
- The Treasury - Australian Government
- Posco Energy - South Korea
- Gujarat Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- CIMB Investment Bank - Malaysia
- San Jose City I Power Corp, Philippines
- Central Java Power - Indonesia
- White Energy Company Limited
- Mercuria Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Karaikal Port Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Larsen & Toubro Limited - India
- Renaissance Capital - South Africa
- Sinarmas Energy and Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Metalloyd Limited - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Kobexindo Tractors - Indoneisa
- Tata Chemicals Ltd - India
- ASAPP Information Group - India
- Uttam Galva Steels Limited - India
- Aditya Birla Group - India
- Kaltim Prima Coal - Indonesia
- Australian Coal Association
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