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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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Friday, 03 May 13
SHIP OWNERS ARE INVESTING HEAVILY IN DRY BULK CARRIER NEWBUILDINGS ONCE MORE: IS THERE ANY RATIONALE? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite the fact that the dry bulk market remains heavily oversupplied and just as the orderbook of newbuildings had began to shrink, it seems that sh ...
Wednesday, 01 May 13
NEWCASTLE PORT SHIPPED 23.14 PER CENT MORE COAL WEEK ON WEEK
COALspot.com - Newcastle port in Australia has loaded 2,997,729 tons of thermal and coking coal for week ended 0700 hours 29 April 2013, Newca ...
Tuesday, 30 April 13
KATINGAN RIA THERMAL COAL TO START PRODUCTION FROM EARLY 2014
COALspot.com - Realm Resources Ltd. (ASX: RRP) has announced the completion of the Feasibility Study for its 51% owned Katingan Ria thermal co ...
Monday, 29 April 13
FIRST TRADES OF SGX API 8 CFR SOUTH CHINA COAL SWAP
COALspot.com - The SGX API 8 CFR South China Coal Swap went live for clearing on SGX-DC today with a total volume of 25,000 metric tonnes (25 lots). ...
Sunday, 28 April 13
SUB BIT INDONESIA COAL & CFR SOUTH CHINA COAL SWAPS STAY POSITIVE
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average May 2013 delivery has gained 0.34 percent and CFR South China coal shipment gai ...
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- Sojitz Corporation - Japan
- Savvy Resources Ltd - HongKong
- Edison Trading Spa - Italy
- Bhushan Steel Limited - India
- The University of Queensland
- Salva Resources Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- The Treasury - Australian Government
- Heidelberg Cement - Germany
- Siam City Cement PLC, Thailand
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Indogreen Group - Indonesia
- Tamil Nadu electricity Board
- Semirara Mining Corp, Philippines
- Bulk Trading Sa - Switzerland
- CIMB Investment Bank - Malaysia
- Bhoruka Overseas - Indonesia
- Kobexindo Tractors - Indoneisa
- Altura Mining Limited, Indonesia
- Kartika Selabumi Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Mines - Canada
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- Petron Corporation, Philippines
- Oldendorff Carriers - Singapore
- Electricity Authority, New Zealand
- OPG Power Generation Pvt Ltd - India
- Singapore Mercantile Exchange
- Kohat Cement Company Ltd. - Pakistan
- Central Java Power - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Borneo Indobara - Indonesia
- Metalloyd Limited - United Kingdom
- Ambuja Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Madhucon Powers Ltd - India
- Uttam Galva Steels Limited - India
- Bukit Makmur.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Sindya Power Generating Company Private Ltd
- Gujarat Sidhee Cement - India
- Ministry of Finance - Indonesia
- Power Finance Corporation Ltd., India
- Essar Steel Hazira Ltd - India
- Global Coal Blending Company Limited - Australia
- SMG Consultants - Indonesia
- Intertek Mineral Services - Indonesia
- MS Steel International - UAE
- Kumho Petrochemical, South Korea
- Parliament of New Zealand
- Formosa Plastics Group - Taiwan
- LBH Netherlands Bv - Netherlands
- Orica Australia Pty. Ltd.
- IEA Clean Coal Centre - UK
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Minerals Council of Australia
- Kapuas Tunggal Persada - Indonesia
- Bharathi Cement Corporation - India
- Coal and Oil Company - UAE
- Barasentosa Lestari - Indonesia
- Independent Power Producers Association of India
- Attock Cement Pakistan Limited
- Samtan Co., Ltd - South Korea
- PowerSource Philippines DevCo
- Banpu Public Company Limited - Thailand
- Thiess Contractors Indonesia
- Africa Commodities Group - South Africa
- India Bulls Power Limited - India
- Port Waratah Coal Services - Australia
- Miang Besar Coal Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Posco Energy - South Korea
- Global Business Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Australian Coal Association
- Simpson Spence & Young - Indonesia
- IHS Mccloskey Coal Group - USA
- TeaM Sual Corporation - Philippines
- Standard Chartered Bank - UAE
- Maheswari Brothers Coal Limited - India
- Jaiprakash Power Ventures ltd
- Indian Energy Exchange, India
- Pendopo Energi Batubara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Larsen & Toubro Limited - India
- ICICI Bank Limited - India
- Electricity Generating Authority of Thailand
- Australian Commodity Traders Exchange
- GN Power Mariveles Coal Plant, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Indian Oil Corporation Limited
- Planning Commission, India
- Agrawal Coal Company - India
- Bukit Baiduri Energy - Indonesia
- Georgia Ports Authority, United States
- Dalmia Cement Bharat India
- Mintek Dendrill Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- PTC India Limited - India
- Central Electricity Authority - India
- Krishnapatnam Port Company Ltd. - India
- Bayan Resources Tbk. - Indonesia
- The State Trading Corporation of India Ltd
- Chettinad Cement Corporation Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Romanian Commodities Exchange
- Toyota Tsusho Corporation, Japan
- Cigading International Bulk Terminal - Indonesia
- Mjunction Services Limited - India
- International Coal Ventures Pvt Ltd - India
- Bangladesh Power Developement Board
- Videocon Industries ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Goldman Sachs - Singapore
- Lanco Infratech Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Kepco SPC Power Corporation, Philippines
- Economic Council, Georgia
- Vizag Seaport Private Limited - India
- New Zealand Coal & Carbon
- South Luzon Thermal Energy Corporation
- Ceylon Electricity Board - Sri Lanka
- Vedanta Resources Plc - India
- Deloitte Consulting - India
- Jindal Steel & Power Ltd - India
- Meralco Power Generation, Philippines
- Ministry of Transport, Egypt
- Sree Jayajothi Cements Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Trasteel International SA, Italy
- Tata Chemicals Ltd - India
- Mercuria Energy - Indonesia
- Eastern Coal Council - USA
- Holcim Trading Pte Ltd - Singapore
- Aboitiz Power Corporation - Philippines
- Medco Energi Mining Internasional
- Renaissance Capital - South Africa
- GVK Power & Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Price Waterhouse Coopers - Russia
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Parry Sugars Refinery, India
- Marubeni Corporation - India
- Manunggal Multi Energi - Indonesia
- ASAPP Information Group - India
- SMC Global Power, Philippines
- Therma Luzon, Inc, Philippines
- Aditya Birla Group - India
- Mercator Lines Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Kideco Jaya Agung - Indonesia
- Riau Bara Harum - Indonesia
- Indonesian Coal Mining Association
- PetroVietnam Power Coal Import and Supply Company
- Kaltim Prima Coal - Indonesia
- Bhatia International Limited - India
- Baramulti Group, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Rio Tinto Coal - Australia
- Eastern Energy - Thailand
- GAC Shipping (India) Pvt Ltd
- Sarangani Energy Corporation, Philippines
- Star Paper Mills Limited - India
- Antam Resourcindo - Indonesia
- White Energy Company Limited
- SN Aboitiz Power Inc, Philippines
- Makarim & Taira - Indonesia
- Energy Link Ltd, New Zealand
- Globalindo Alam Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- VISA Power Limited - India
- Sakthi Sugars Limited - India
- Latin American Coal - Colombia
- Xindia Steels Limited - India
- Sical Logistics Limited - India
- Orica Mining Services - Indonesia
- London Commodity Brokers - England
- Ind-Barath Power Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Coastal Gujarat Power Limited - India
- Cement Manufacturers Association - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petrochimia International Co. Ltd.- Taiwan
- Coalindo Energy - Indonesia
- Anglo American - United Kingdom
- Interocean Group of Companies - India
- Wilmar Investment Holdings
- Straits Asia Resources Limited - Singapore
- CNBM International Corporation - China
- Siam City Cement - Thailand
- Wood Mackenzie - Singapore
- Commonwealth Bank - Australia
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Carbofer General Trading SA - India
- Malabar Cements Ltd - India
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