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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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- Meenaskhi Energy Private Limited - India
- Mercuria Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- India Bulls Power Limited - India
- Kobexindo Tractors - Indoneisa
- Singapore Mercantile Exchange
- Bayan Resources Tbk. - Indonesia
- Directorate Of Revenue Intelligence - India
- Uttam Galva Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Baramulti Group, Indonesia
- Riau Bara Harum - Indonesia
- Edison Trading Spa - Italy
- Bhatia International Limited - India
- Larsen & Toubro Limited - India
- Trasteel International SA, Italy
- Oldendorff Carriers - Singapore
- Kumho Petrochemical, South Korea
- GVK Power & Infra Limited - India
- CIMB Investment Bank - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Coal and Oil Company - UAE
- Energy Development Corp, Philippines
- CNBM International Corporation - China
- Mintek Dendrill Indonesia
- VISA Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Mercator Lines Limited - India
- Semirara Mining Corp, Philippines
- The University of Queensland
- Star Paper Mills Limited - India
- New Zealand Coal & Carbon
- SN Aboitiz Power Inc, Philippines
- Indonesian Coal Mining Association
- Interocean Group of Companies - India
- Carbofer General Trading SA - India
- London Commodity Brokers - England
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bangladesh Power Developement Board
- ASAPP Information Group - India
- Bhoruka Overseas - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- MS Steel International - UAE
- The State Trading Corporation of India Ltd
- Malabar Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Banpu Public Company Limited - Thailand
- Heidelberg Cement - Germany
- Therma Luzon, Inc, Philippines
- Australian Commodity Traders Exchange
- Orica Mining Services - Indonesia
- Agrawal Coal Company - India
- Planning Commission, India
- Ceylon Electricity Board - Sri Lanka
- Jaiprakash Power Ventures ltd
- Power Finance Corporation Ltd., India
- Jindal Steel & Power Ltd - India
- Rio Tinto Coal - Australia
- Siam City Cement - Thailand
- Commonwealth Bank - Australia
- Ind-Barath Power Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- Thiess Contractors Indonesia
- Romanian Commodities Exchange
- Intertek Mineral Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- International Coal Ventures Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Xindia Steels Limited - India
- Antam Resourcindo - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Latin American Coal - Colombia
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- Georgia Ports Authority, United States
- PNOC Exploration Corporation - Philippines
- Wood Mackenzie - Singapore
- Independent Power Producers Association of India
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- OPG Power Generation Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Coal Association
- Port Waratah Coal Services - Australia
- Maharashtra Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- PowerSource Philippines DevCo
- Parry Sugars Refinery, India
- Sindya Power Generating Company Private Ltd
- Eastern Energy - Thailand
- Kohat Cement Company Ltd. - Pakistan
- AsiaOL BioFuels Corp., Philippines
- Essar Steel Hazira Ltd - India
- The Treasury - Australian Government
- Dalmia Cement Bharat India
- Anglo American - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- White Energy Company Limited
- San Jose City I Power Corp, Philippines
- Aditya Birla Group - India
- Sojitz Corporation - Japan
- Electricity Generating Authority of Thailand
- Sinarmas Energy and Mining - Indonesia
- Altura Mining Limited, Indonesia
- Madhucon Powers Ltd - India
- Samtan Co., Ltd - South Korea
- Global Business Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Borneo Indobara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Vizag Seaport Private Limited - India
- TeaM Sual Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- European Bulk Services B.V. - Netherlands
- Africa Commodities Group - South Africa
- Coastal Gujarat Power Limited - India
- Economic Council, Georgia
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- Central Electricity Authority - India
- Mjunction Services Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ambuja Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- PTC India Limited - India
- Vedanta Resources Plc - India
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Mines - Canada
- Indogreen Group - Indonesia
- Savvy Resources Ltd - HongKong
- Bhushan Steel Limited - India
- Central Java Power - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Cement Manufacturers Association - India
- Indian Oil Corporation Limited
- SMC Global Power, Philippines
- Renaissance Capital - South Africa
- Iligan Light & Power Inc, Philippines
- Indian Energy Exchange, India
- Merrill Lynch Commodities Europe
- Kideco Jaya Agung - Indonesia
- Tata Chemicals Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Marubeni Corporation - India
- Ministry of Finance - Indonesia
- Wilmar Investment Holdings
- Holcim Trading Pte Ltd - Singapore
- Gujarat Sidhee Cement - India
- Tamil Nadu electricity Board
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Indika Energy - Indonesia
- IEA Clean Coal Centre - UK
- McConnell Dowell - Australia
- Makarim & Taira - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Straits Asia Resources Limited - Singapore
- Alfred C Toepfer International GmbH - Germany
- Minerals Council of Australia
- IHS Mccloskey Coal Group - USA
- Goldman Sachs - Singapore
- Grasim Industreis Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parliament of New Zealand
- Medco Energi Mining Internasional
- Orica Australia Pty. Ltd.
- Indo Tambangraya Megah - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Meralco Power Generation, Philippines
- SMG Consultants - Indonesia
- Global Coal Blending Company Limited - Australia
- Asmin Koalindo Tuhup - Indonesia
- GMR Energy Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Binh Thuan Hamico - Vietnam
- Ministry of Transport, Egypt
- Petron Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Maheswari Brothers Coal Limited - India
- Barasentosa Lestari - Indonesia
- Standard Chartered Bank - UAE
- Semirara Mining and Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Posco Energy - South Korea
- Simpson Spence & Young - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sakthi Sugars Limited - India
- Formosa Plastics Group - Taiwan
- Sical Logistics Limited - India
- GN Power Mariveles Coal Plant, Philippines
- PetroVietnam Power Coal Import and Supply Company
- TNB Fuel Sdn Bhd - Malaysia
- Timah Investasi Mineral - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Electricity Authority, New Zealand
- Price Waterhouse Coopers - Russia
- Videocon Industries ltd - India
- South Luzon Thermal Energy Corporation
- Petrochimia International Co. Ltd.- Taiwan
- Chamber of Mines of South Africa
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