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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, 08 March 13
DRY BULK MARKET ON A RISING TREND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has continued its rising pattern set after China opened up again for business, following the Asian New Year Holidays. As a resul ...
Thursday, 07 March 13
PANAMAX : POSITIVE TREND; CAPESIZE : GRADUALLY SLIDE - FEARNLEYS AS
Handy
The Atlantic saw more cargoes than last week and rates ticking upwards. The USG-Feast was at USD 22k and Black sea-feast was at USD 12k. The ...
Tuesday, 05 March 13
NEWCASTLE PORT SHIPPED 20.77 PERCENT MORE COAL W/E 4 MARCH 2013
COALspot.com - Newcastle port in Australia has loaded 2,631,562 MT of thermal and coking coal for a week ended 0700 hours 4 March 2013, Newcas ...
Sunday, 03 March 13
INDONESIAN THERMAL COAL SWAPS; CHINA CONTRACTS FALL W-O-W
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q2’ 2013 delivery has lost 0.75 percent and CFR South China coal shipment&nbs ...
Sunday, 03 March 13
FREIGHT MARKET FROM INDONESIA EXPECTED TO BE FIRM - VISTAAR
COALspot.com – The freight market has been fairly firm this week except for cape size index.
The BDI was up by 4.64 points closing at 776 p ...
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- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Antam Resourcindo - Indonesia
- Oldendorff Carriers - Singapore
- Parliament of New Zealand
- Price Waterhouse Coopers - Russia
- Sakthi Sugars Limited - India
- Makarim & Taira - Indonesia
- Madhucon Powers Ltd - India
- Singapore Mercantile Exchange
- Global Business Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Carbofer General Trading SA - India
- Heidelberg Cement - Germany
- Altura Mining Limited, Indonesia
- Posco Energy - South Korea
- PNOC Exploration Corporation - Philippines
- Bharathi Cement Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Standard Chartered Bank - UAE
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Energy Development Corp, Philippines
- Mintek Dendrill Indonesia
- Parry Sugars Refinery, India
- OPG Power Generation Pvt Ltd - India
- McConnell Dowell - Australia
- Salva Resources Pvt Ltd - India
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- Ministry of Finance - Indonesia
- Economic Council, Georgia
- Interocean Group of Companies - India
- Leighton Contractors Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- PTC India Limited - India
- GVK Power & Infra Limited - India
- Coalindo Energy - Indonesia
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Lanco Infratech Ltd - India
- White Energy Company Limited
- Kalimantan Lumbung Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Siam City Cement PLC, Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Bulk Trading Sa - Switzerland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Thai Mozambique Logistica
- Kaltim Prima Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Electricity Generating Authority of Thailand
- Central Electricity Authority - India
- Eastern Energy - Thailand
- Indika Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement - Thailand
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Indian Oil Corporation Limited
- Medco Energi Mining Internasional
- Holcim Trading Pte Ltd - Singapore
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Minerals Council of Australia
- Australian Coal Association
- Wilmar Investment Holdings
- ASAPP Information Group - India
- Cigading International Bulk Terminal - Indonesia
- Sojitz Corporation - Japan
- Ind-Barath Power Infra Limited - India
- Larsen & Toubro Limited - India
- TeaM Sual Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Maharashtra Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Electricity Authority, New Zealand
- CNBM International Corporation - China
- Pendopo Energi Batubara - Indonesia
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- Coastal Gujarat Power Limited - India
- Grasim Industreis Ltd - India
- Star Paper Mills Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Ambuja Cements Ltd - India
- Meralco Power Generation, Philippines
- Commonwealth Bank - Australia
- Essar Steel Hazira Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Trasteel International SA, Italy
- Kepco SPC Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Therma Luzon, Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Deloitte Consulting - India
- Ministry of Mines - Canada
- Global Coal Blending Company Limited - Australia
- Kohat Cement Company Ltd. - Pakistan
- Savvy Resources Ltd - HongKong
- Bukit Makmur.PT - Indonesia
- Tamil Nadu electricity Board
- GMR Energy Limited - India
- Sical Logistics Limited - India
- Aditya Birla Group - India
- Vizag Seaport Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Orica Australia Pty. Ltd.
- Iligan Light & Power Inc, Philippines
- Australian Commodity Traders Exchange
- Alfred C Toepfer International GmbH - Germany
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- Xindia Steels Limited - India
- Eastern Coal Council - USA
- Orica Mining Services - Indonesia
- Anglo American - United Kingdom
- Power Finance Corporation Ltd., India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
- Marubeni Corporation - India
- Chamber of Mines of South Africa
- Formosa Plastics Group - Taiwan
- Jindal Steel & Power Ltd - India
- Bhoruka Overseas - Indonesia
- Romanian Commodities Exchange
- New Zealand Coal & Carbon
- Rio Tinto Coal - Australia
- Kapuas Tunggal Persada - Indonesia
- Port Waratah Coal Services - Australia
- Semirara Mining and Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Edison Trading Spa - Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- PowerSource Philippines DevCo
- San Jose City I Power Corp, Philippines
- Agrawal Coal Company - India
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Attock Cement Pakistan Limited
- Merrill Lynch Commodities Europe
- Directorate Of Revenue Intelligence - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Bukit Baiduri Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Globalindo Alam Lestari - Indonesia
- Ministry of Transport, Egypt
- Jaiprakash Power Ventures ltd
- Videocon Industries ltd - India
- Uttam Galva Steels Limited - India
- Indonesian Coal Mining Association
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- Goldman Sachs - Singapore
- Thiess Contractors Indonesia
- Barasentosa Lestari - Indonesia
- Bhatia International Limited - India
- Gujarat Sidhee Cement - India
- Cement Manufacturers Association - India
- India Bulls Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Baramulti Group, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bhushan Steel Limited - India
- Central Java Power - Indonesia
- Straits Asia Resources Limited - Singapore
- Sinarmas Energy and Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- International Coal Ventures Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Simpson Spence & Young - Indonesia
- South Luzon Thermal Energy Corporation
- European Bulk Services B.V. - Netherlands
- Semirara Mining Corp, Philippines
- Riau Bara Harum - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Manunggal Multi Energi - Indonesia
- Petron Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Toyota Tsusho Corporation, Japan
- Planning Commission, India
- Binh Thuan Hamico - Vietnam
- Sarangani Energy Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Timah Investasi Mineral - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- MS Steel International - UAE
- Billiton Holdings Pty Ltd - Australia
- Georgia Ports Authority, United States
- Kartika Selabumi Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kumho Petrochemical, South Korea
- The University of Queensland
- VISA Power Limited - India
- Kideco Jaya Agung - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Dalmia Cement Bharat India
- Mjunction Services Limited - India
- Metalloyd Limited - United Kingdom
- The State Trading Corporation of India Ltd
- Indogreen Group - Indonesia
- Asmin Koalindo Tuhup - Indonesia
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