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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, 09 November 12
SHIP OWNERS TURN TO SECOND HAND VESSELS, WHICH COME AT ATTRACTIVE PRICES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The attractiveness of modern second hand vessels, which are often priced aggressively can't be ignored by cash-rich ship owners, who are taking adv ...
Thursday, 08 November 12
LARGE ECO SUPRA : INDO - INDIA NOW FIXED AT USD 11K FOR DELIVERY SINGAPORE - FEARNLEYS
Handy
The Atlantic market continues to remain weak with rates further softening on FH. Rates from USG to Feast were around USD 14k and Black Sea to ...
Thursday, 08 November 12
DRY BULK MARKET RETREATS AGAIN ON HIGHER SHIP SUPPLY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
In further evidence of a latest round of dry bulk shipping misery, the industry's benchmark fell for the 11th straight session yesterday, as the in ...
Thursday, 08 November 12
JOIN CHINA STEAM COAL SUPPLY - DEMAND FORUM
Join China Steam Coal Supply-Demand Forum & Visit Shenhua Yudean Zhuhai Port Coal Terminal
Press Release - Organized by CBI BIZ and suppo ...
Wednesday, 07 November 12
NEWBUILDING ORDERING ACTIVITY ON A STEADY PACE PRIOR TO THE END OF THE YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Newbuilding orders, which to many involved in the shipping industry, are the main reason of today's low freight rates and subsequent financial prob ...
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- CNBM International Corporation - China
- The State Trading Corporation of India Ltd
- Marubeni Corporation - India
- Mercator Lines Limited - India
- Sinarmas Energy and Mining - Indonesia
- Tamil Nadu electricity Board
- White Energy Company Limited
- Ceylon Electricity Board - Sri Lanka
- Wood Mackenzie - Singapore
- The University of Queensland
- Videocon Industries ltd - India
- Merrill Lynch Commodities Europe
- Jorong Barutama Greston.PT - Indonesia
- Electricity Authority, New Zealand
- Sakthi Sugars Limited - India
- Indogreen Group - Indonesia
- VISA Power Limited - India
- Central Electricity Authority - India
- Georgia Ports Authority, United States
- Orica Mining Services - Indonesia
- Essar Steel Hazira Ltd - India
- Bukit Baiduri Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Edison Trading Spa - Italy
- Ministry of Mines - Canada
- Bangladesh Power Developement Board
- Bhushan Steel Limited - India
- Posco Energy - South Korea
- Coal and Oil Company - UAE
- Star Paper Mills Limited - India
- Thiess Contractors Indonesia
- SMC Global Power, Philippines
- San Jose City I Power Corp, Philippines
- Borneo Indobara - Indonesia
- Makarim & Taira - Indonesia
- Bayan Resources Tbk. - Indonesia
- Siam City Cement PLC, Thailand
- International Coal Ventures Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sojitz Corporation - Japan
- Xindia Steels Limited - India
- Australian Coal Association
- Toyota Tsusho Corporation, Japan
- Mercuria Energy - Indonesia
- Electricity Generating Authority of Thailand
- Vizag Seaport Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Rio Tinto Coal - Australia
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- Lanco Infratech Ltd - India
- Kaltim Prima Coal - Indonesia
- Uttam Galva Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IEA Clean Coal Centre - UK
- Directorate Of Revenue Intelligence - India
- Indonesian Coal Mining Association
- Semirara Mining Corp, Philippines
- Medco Energi Mining Internasional
- Aditya Birla Group - India
- Jaiprakash Power Ventures ltd
- Energy Development Corp, Philippines
- Thai Mozambique Logistica
- New Zealand Coal & Carbon
- MS Steel International - UAE
- India Bulls Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Parliament of New Zealand
- Planning Commission, India
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- Iligan Light & Power Inc, Philippines
- ASAPP Information Group - India
- Baramulti Group, Indonesia
- Goldman Sachs - Singapore
- Vedanta Resources Plc - India
- Kohat Cement Company Ltd. - Pakistan
- Indo Tambangraya Megah - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Meenaskhi Energy Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Riau Bara Harum - Indonesia
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Global Business Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Global Coal Blending Company Limited - Australia
- Barasentosa Lestari - Indonesia
- Commonwealth Bank - Australia
- Mjunction Services Limited - India
- Cement Manufacturers Association - India
- Aboitiz Power Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Port Waratah Coal Services - Australia
- Global Green Power PLC Corporation, Philippines
- Altura Mining Limited, Indonesia
- Kartika Selabumi Mining - Indonesia
- Carbofer General Trading SA - India
- Parry Sugars Refinery, India
- Siam City Cement - Thailand
- Indian Oil Corporation Limited
- Larsen & Toubro Limited - India
- Independent Power Producers Association of India
- Simpson Spence & Young - Indonesia
- Bukit Makmur.PT - Indonesia
- Romanian Commodities Exchange
- Rashtriya Ispat Nigam Limited - India
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- IHS Mccloskey Coal Group - USA
- Malabar Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Indika Energy - Indonesia
- Attock Cement Pakistan Limited
- Indian Energy Exchange, India
- OPG Power Generation Pvt Ltd - India
- Eastern Coal Council - USA
- Heidelberg Cement - Germany
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Central Java Power - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Power Finance Corporation Ltd., India
- Cigading International Bulk Terminal - Indonesia
- The Treasury - Australian Government
- Sical Logistics Limited - India
- European Bulk Services B.V. - Netherlands
- Tata Chemicals Ltd - India
- London Commodity Brokers - England
- Dalmia Cement Bharat India
- GVK Power & Infra Limited - India
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Oldendorff Carriers - Singapore
- Samtan Co., Ltd - South Korea
- Pendopo Energi Batubara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Globalindo Alam Lestari - Indonesia
- Anglo American - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Australian Commodity Traders Exchange
- Economic Council, Georgia
- Billiton Holdings Pty Ltd - Australia
- Agrawal Coal Company - India
- Leighton Contractors Pty Ltd - Australia
- Wilmar Investment Holdings
- Bhoruka Overseas - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Coalindo Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kumho Petrochemical, South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Trasteel International SA, Italy
- ICICI Bank Limited - India
- Gujarat Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- SMG Consultants - Indonesia
- Standard Chartered Bank - UAE
- Eastern Energy - Thailand
- Intertek Mineral Services - Indonesia
- Bulk Trading Sa - Switzerland
- Kobexindo Tractors - Indoneisa
- Formosa Plastics Group - Taiwan
- Ministry of Transport, Egypt
- Bharathi Cement Corporation - India
- Orica Australia Pty. Ltd.
- GN Power Mariveles Coal Plant, Philippines
- Manunggal Multi Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Ind-Barath Power Infra Limited - India
- Ministry of Finance - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Petron Corporation, Philippines
- Salva Resources Pvt Ltd - India
- PTC India Limited - India
- Maheswari Brothers Coal Limited - India
- GMR Energy Limited - India
- Bhatia International Limited - India
- McConnell Dowell - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Kideco Jaya Agung - Indonesia
- Antam Resourcindo - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Chamber of Mines of South Africa
- Kalimantan Lumbung Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Minerals Council of Australia
- PNOC Exploration Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Meralco Power Generation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Deloitte Consulting - India
- Singapore Mercantile Exchange
- Renaissance Capital - South Africa
- Interocean Group of Companies - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Metalloyd Limited - United Kingdom
- CIMB Investment Bank - Malaysia
- Sarangani Energy Corporation, Philippines
- Ambuja Cements Ltd - India
- Mintek Dendrill Indonesia
- Banpu Public Company Limited - Thailand
- Jindal Steel & Power Ltd - India
- Gujarat Sidhee Cement - India
- GAC Shipping (India) Pvt Ltd
- Grasim Industreis Ltd - India
- Asmin Koalindo Tuhup - Indonesia
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