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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, 13 December 12
HANDY : WCI-CHINA RATES AROUND $ 6000 AND ECI-CHINA AROUND $ 4000 - FEARNLEYS
Handy
Atlantic market remained unchanged. Rates from USG to Feast were around USD 18k and Black Sea to Feast about USD 10k. USG-Skaw-Passero rates ...
Wednesday, 12 December 12
69.23 PERCENT OF END-USERS ARE BELIEVE, COAL PRICES ARE IN UPWARD TREND
COALspot.com - The Indonesian government’s declared coal reference price for December’ 12 has gained US cents 31 per MT M-o- ...
Wednesday, 12 December 12
CAPESIZE FREIGHT RATES TO RANGE BETWEEN $9,000 - 16,000/DAY IN THE COMING WEEKS SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
In its regular update on the dry bulk market, BIMCO forecasted yesterday, that Capesize time-charter rates are expected to stay elevated in the foll ...
Tuesday, 11 December 12
NEWCASTLE PORT IN AUSTRALIA HAS LOADED 2,720,205 MT OF COAL W/E 10 DECEMBER 2012
COALspot.com - Newcastle port in Australia has loaded 2,720,205 MT of thermal and coking coal for week ended 0700 hours 10 December 2012, Newc ...
Sunday, 09 December 12
COAL SWAPS HAVE LOST DIRECTION DUE TO LACK OF ASIAN INTEREST
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q1’ 2013 delivery gained 2.43 percent M-M but lost WoW by 0.54 percent and 0.62 ...
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- Bukit Makmur.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Rashtriya Ispat Nigam Limited - India
- Commonwealth Bank - Australia
- Anglo American - United Kingdom
- Jindal Steel & Power Ltd - India
- Binh Thuan Hamico - Vietnam
- MS Steel International - UAE
- Singapore Mercantile Exchange
- Xindia Steels Limited - India
- Trasteel International SA, Italy
- Power Finance Corporation Ltd., India
- Altura Mining Limited, Indonesia
- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement PLC, Thailand
- ICICI Bank Limited - India
- Dalmia Cement Bharat India
- Eastern Energy - Thailand
- Globalindo Alam Lestari - Indonesia
- Australian Commodity Traders Exchange
- Gujarat Sidhee Cement - India
- Chettinad Cement Corporation Ltd - India
- Jaiprakash Power Ventures ltd
- Kohat Cement Company Ltd. - Pakistan
- Indogreen Group - Indonesia
- Borneo Indobara - Indonesia
- Pendopo Energi Batubara - Indonesia
- Independent Power Producers Association of India
- Interocean Group of Companies - India
- AsiaOL BioFuels Corp., Philippines
- SN Aboitiz Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Electricity Authority, New Zealand
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- New Zealand Coal & Carbon
- Siam City Cement - Thailand
- Uttam Galva Steels Limited - India
- Central Java Power - Indonesia
- London Commodity Brokers - England
- Indonesian Coal Mining Association
- Meralco Power Generation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Mines - Canada
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- Heidelberg Cement - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhoruka Overseas - Indonesia
- Sakthi Sugars Limited - India
- Grasim Industreis Ltd - India
- Thai Mozambique Logistica
- Baramulti Group, Indonesia
- Eastern Coal Council - USA
- Miang Besar Coal Terminal - Indonesia
- Carbofer General Trading SA - India
- Bayan Resources Tbk. - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Goldman Sachs - Singapore
- Vedanta Resources Plc - India
- Energy Link Ltd, New Zealand
- Sree Jayajothi Cements Limited - India
- Bukit Baiduri Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- The State Trading Corporation of India Ltd
- Malabar Cements Ltd - India
- Merrill Lynch Commodities Europe
- Ind-Barath Power Infra Limited - India
- Romanian Commodities Exchange
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- Wilmar Investment Holdings
- Port Waratah Coal Services - Australia
- Gujarat Mineral Development Corp Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cement Manufacturers Association - India
- Coastal Gujarat Power Limited - India
- CNBM International Corporation - China
- Bangladesh Power Developement Board
- Ministry of Transport, Egypt
- San Jose City I Power Corp, Philippines
- Global Business Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Electricity Generating Authority of Thailand
- Holcim Trading Pte Ltd - Singapore
- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Minerals Council of Australia
- India Bulls Power Limited - India
- Africa Commodities Group - South Africa
- Petron Corporation, Philippines
- Deloitte Consulting - India
- Karbindo Abesyapradhi - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- CIMB Investment Bank - Malaysia
- Intertek Mineral Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Lanco Infratech Ltd - India
- Thiess Contractors Indonesia
- Star Paper Mills Limited - India
- Parry Sugars Refinery, India
- Medco Energi Mining Internasional
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Central Electricity Authority - India
- Marubeni Corporation - India
- Aboitiz Power Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Posco Energy - South Korea
- Attock Cement Pakistan Limited
- Orica Mining Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Coalindo Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Larsen & Toubro Limited - India
- IEA Clean Coal Centre - UK
- Kalimantan Lumbung Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Barasentosa Lestari - Indonesia
- Standard Chartered Bank - UAE
- Alfred C Toepfer International GmbH - Germany
- Kepco SPC Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Samtan Co., Ltd - South Korea
- Ambuja Cements Ltd - India
- Economic Council, Georgia
- PTC India Limited - India
- Semirara Mining and Power Corporation, Philippines
- White Energy Company Limited
- Timah Investasi Mineral - Indoneisa
- The Treasury - Australian Government
- Orica Australia Pty. Ltd.
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indo Tambangraya Megah - Indonesia
- Manunggal Multi Energi - Indonesia
- GMR Energy Limited - India
- Parliament of New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Edison Trading Spa - Italy
- Mjunction Services Limited - India
- Meenaskhi Energy Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Indian Energy Exchange, India
- Formosa Plastics Group - Taiwan
- Sical Logistics Limited - India
- Kapuas Tunggal Persada - Indonesia
- Aditya Birla Group - India
- Riau Bara Harum - Indonesia
- IHS Mccloskey Coal Group - USA
- International Coal Ventures Pvt Ltd - India
- PowerSource Philippines DevCo
- Cigading International Bulk Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Bhatia International Limited - India
- Latin American Coal - Colombia
- Sindya Power Generating Company Private Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Mercuria Energy - Indonesia
- VISA Power Limited - India
- Tamil Nadu electricity Board
- Chamber of Mines of South Africa
- McConnell Dowell - Australia
- Ministry of Finance - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bulk Trading Sa - Switzerland
- Renaissance Capital - South Africa
- Maheswari Brothers Coal Limited - India
- Sarangani Energy Corporation, Philippines
- Tata Chemicals Ltd - India
- The University of Queensland
- Bhushan Steel Limited - India
- Sojitz Corporation - Japan
- Savvy Resources Ltd - HongKong
- South Luzon Thermal Energy Corporation
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Antam Resourcindo - Indonesia
- European Bulk Services B.V. - Netherlands
- Planning Commission, India
- Sinarmas Energy and Mining - Indonesia
- Bharathi Cement Corporation - India
- Mercator Lines Limited - India
- Essar Steel Hazira Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mintek Dendrill Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining Corp, Philippines
- Iligan Light & Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Kaltim Prima Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Therma Luzon, Inc, Philippines
- Videocon Industries ltd - India
- Karaikal Port Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Madhucon Powers Ltd - India
- Salva Resources Pvt Ltd - India
- GVK Power & Infra Limited - India
- Energy Development Corp, Philippines
- Oldendorff Carriers - Singapore
- Makarim & Taira - Indonesia
- Kumho Petrochemical, South Korea
- ASAPP Information Group - India
- SMC Global Power, Philippines
- Indian Oil Corporation Limited
- Agrawal Coal Company - India
- Australian Coal Association
- Ceylon Electricity Board - Sri Lanka
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