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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, 24 January 13
INDO - INDIA NOW AT APS $ 8K + BB USD 90000 - FEARNLEYS AS
Handy
The Atlantic market remains stable as supply of tonnage is still in excess of demand. USG- Far east fixed at $18k and CONT-FEAST at $ 11k. Pa ...
Thursday, 24 January 13
DRY BULK MARKET FALLS ON TROPICAL CYCLONE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has been on the downside during the past couple of days, mainly as a result of the tropical storm which forced ports to close do ...
Tuesday, 22 January 13
PORT OF ANTWERP HANDLES 7.0 PERCENT MORE COAL IN 2012 Y-Y
COALspot.com - The port of Antwerp handled 184,134,516 tonnes of freight last year.
This represents a drop of 1.6% compared with 2011, when the v ...
Monday, 21 January 13
NEWCASTLE PORT SHIPPED 10.21 PERCENT LESS COAL W/E 21 JANUARY 2013
COALspot.com - Newcastle port in Australia has loaded 2,804,152 MT of thermal and coking coal for week ended 0700 hours 21 January 2013, Newca ...
Monday, 21 January 13
PANAMAX DRY BULK CARRIERS AND AFRAMAX TANKERS PROVED TO BE THE "WEAPON OF CHOICE" FOR MOST SHIP OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
With ship financing getting ever so difficult to procure during the past year or so, ship owners had to get creative in order to persuade banks and ...
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- Central Electricity Authority - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Xindia Steels Limited - India
- Barasentosa Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kobexindo Tractors - Indoneisa
- Kideco Jaya Agung - Indonesia
- Georgia Ports Authority, United States
- Economic Council, Georgia
- White Energy Company Limited
- Lanco Infratech Ltd - India
- McConnell Dowell - Australia
- Banpu Public Company Limited - Thailand
- Pendopo Energi Batubara - Indonesia
- Anglo American - United Kingdom
- Baramulti Group, Indonesia
- Directorate Of Revenue Intelligence - India
- Holcim Trading Pte Ltd - Singapore
- Planning Commission, India
- Thai Mozambique Logistica
- Antam Resourcindo - Indonesia
- Medco Energi Mining Internasional
- Independent Power Producers Association of India
- Coalindo Energy - Indonesia
- Carbofer General Trading SA - India
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- Eastern Coal Council - USA
- Parry Sugars Refinery, India
- PetroVietnam Power Coal Import and Supply Company
- GAC Shipping (India) Pvt Ltd
- Meralco Power Generation, Philippines
- Electricity Generating Authority of Thailand
- Tamil Nadu electricity Board
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- Siam City Cement PLC, Thailand
- Kohat Cement Company Ltd. - Pakistan
- Vedanta Resources Plc - India
- Minerals Council of Australia
- Global Coal Blending Company Limited - Australia
- Ministry of Finance - Indonesia
- Energy Development Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Cement Manufacturers Association - India
- Edison Trading Spa - Italy
- The Treasury - Australian Government
- South Luzon Thermal Energy Corporation
- Timah Investasi Mineral - Indoneisa
- Heidelberg Cement - Germany
- Indian Energy Exchange, India
- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- Metalloyd Limited - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Mercuria Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Sojitz Corporation - Japan
- PTC India Limited - India
- Commonwealth Bank - Australia
- Renaissance Capital - South Africa
- Trasteel International SA, Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Rio Tinto Coal - Australia
- Globalindo Alam Lestari - Indonesia
- Madhucon Powers Ltd - India
- Maheswari Brothers Coal Limited - India
- Chamber of Mines of South Africa
- Sical Logistics Limited - India
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- Standard Chartered Bank - UAE
- Formosa Plastics Group - Taiwan
- Cigading International Bulk Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Africa Commodities Group - South Africa
- Karaikal Port Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Sinarmas Energy and Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Global Business Power Corporation, Philippines
- PowerSource Philippines DevCo
- ASAPP Information Group - India
- Gujarat Mineral Development Corp Ltd - India
- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- MS Steel International - UAE
- Maharashtra Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Central Java Power - Indonesia
- IHS Mccloskey Coal Group - USA
- Essar Steel Hazira Ltd - India
- GVK Power & Infra Limited - India
- GMR Energy Limited - India
- The University of Queensland
- VISA Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Bhatia International Limited - India
- Makarim & Taira - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Bukit Baiduri Energy - Indonesia
- Sakthi Sugars Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Mines - Canada
- Ambuja Cements Ltd - India
- New Zealand Coal & Carbon
- Bulk Trading Sa - Switzerland
- Posco Energy - South Korea
- Bangladesh Power Developement Board
- Kepco SPC Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Indogreen Group - Indonesia
- London Commodity Brokers - England
- Wood Mackenzie - Singapore
- Wilmar Investment Holdings
- The State Trading Corporation of India Ltd
- Orica Australia Pty. Ltd.
- Salva Resources Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Indika Energy - Indonesia
- Mjunction Services Limited - India
- Vizag Seaport Private Limited - India
- Thiess Contractors Indonesia
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- Intertek Mineral Services - Indonesia
- Savvy Resources Ltd - HongKong
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- Toyota Tsusho Corporation, Japan
- Electricity Authority, New Zealand
- Iligan Light & Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Borneo Indobara - Indonesia
- Riau Bara Harum - Indonesia
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Aditya Birla Group - India
- Siam City Cement - Thailand
- Coal and Oil Company - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Deloitte Consulting - India
- Tata Chemicals Ltd - India
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- Port Waratah Coal Services - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- India Bulls Power Limited - India
- Attock Cement Pakistan Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Merrill Lynch Commodities Europe
- GN Power Mariveles Coal Plant, Philippines
- TeaM Sual Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Simpson Spence & Young - Indonesia
- Singapore Mercantile Exchange
- Global Green Power PLC Corporation, Philippines
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Bahari Cakrawala Sebuku - Indonesia
- PNOC Exploration Corporation - Philippines
- Oldendorff Carriers - Singapore
- Grasim Industreis Ltd - India
- Bhushan Steel Limited - India
- Manunggal Multi Energi - Indonesia
- Indian Oil Corporation Limited
- Sarangani Energy Corporation, Philippines
- Ministry of Transport, Egypt
- Dalmia Cement Bharat India
- Parliament of New Zealand
- Gujarat Sidhee Cement - India
- Uttam Galva Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Goldman Sachs - Singapore
- Bhoruka Overseas - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Indonesian Coal Mining Association
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Meenaskhi Energy Private Limited - India
- Bharathi Cement Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Australian Coal Association
- European Bulk Services B.V. - Netherlands
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- Larsen & Toubro Limited - India
- Billiton Holdings Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Mercator Lines Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Agrawal Coal Company - India
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mintek Dendrill Indonesia
- Marubeni Corporation - India
- Energy Link Ltd, New Zealand
- Kumho Petrochemical, South Korea
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