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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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Wednesday, 05 April 17
THE AVERAGE SECOND HAND PANAMAXES AND CAPES PRICES FOR A 5-YR OLD VESSEL HAS INCREASED MORE THAN 19% AND 20% RESPECTIVELY M/M - INTERMODAL
With the help of what so far appears to be a very strong grain season together with the fact that imports from China have remained so far robust in ...
Tuesday, 04 April 17
THE IRON ORE HAS BEEN ABLE TO KEEP ITS GROWTH PATH FAIRLY WELL; THERE IS STILL ONE PART OF THE WORLD THAT IS STILL HEAVILY COMMITTED TO COAL
With the close of March having let us with a very positive after taste and having witnessed near the end of the month the Baltic Dry Index at its h ...
Monday, 03 April 17
WORLD COAL TRADE STABLE IN 2016: DEMAND SHIFTS TO SOUTH-EAST ASIA - ASSOCARBONI
ASSOCARBONI: Coal confirmed as the leading fuel for electricity generation, accounting for 40% of overall production in 2016.
World coal trade ...
Monday, 03 April 17
DRY BULK RATES CONTINUING TO FIRMING UP
COALspot.com: The Freight market was continuing to firming up. Baltic Panamax Index rose 12.81 percent week over week.
The Baltic Exchang ...
Friday, 31 March 17
U.S. COAL PRODUCTION INCREASE SLIGHTLY WEEK OVER WEEK
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 14.5 million short tons ...
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- White Energy Company Limited
- ICICI Bank Limited - India
- Makarim & Taira - Indonesia
- Samtan Co., Ltd - South Korea
- Essar Steel Hazira Ltd - India
- Bukit Makmur.PT - Indonesia
- Sical Logistics Limited - India
- Coastal Gujarat Power Limited - India
- Salva Resources Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Gujarat Mineral Development Corp Ltd - India
- Borneo Indobara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Baramulti Group, Indonesia
- Billiton Holdings Pty Ltd - Australia
- The Treasury - Australian Government
- Kaltim Prima Coal - Indonesia
- Riau Bara Harum - Indonesia
- Economic Council, Georgia
- Bangladesh Power Developement Board
- SMG Consultants - Indonesia
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Gujarat Sidhee Cement - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mintek Dendrill Indonesia
- Thai Mozambique Logistica
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Sojitz Corporation - Japan
- Holcim Trading Pte Ltd - Singapore
- PowerSource Philippines DevCo
- Indika Energy - Indonesia
- Uttam Galva Steels Limited - India
- Marubeni Corporation - India
- Ind-Barath Power Infra Limited - India
- San Jose City I Power Corp, Philippines
- Kumho Petrochemical, South Korea
- Xindia Steels Limited - India
- Eastern Energy - Thailand
- Banpu Public Company Limited - Thailand
- Energy Development Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Finance - Indonesia
- Maheswari Brothers Coal Limited - India
- Bulk Trading Sa - Switzerland
- ASAPP Information Group - India
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- IEA Clean Coal Centre - UK
- PetroVietnam Power Coal Import and Supply Company
- Sree Jayajothi Cements Limited - India
- Kideco Jaya Agung - Indonesia
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Dalmia Cement Bharat India
- Vizag Seaport Private Limited - India
- Independent Power Producers Association of India
- Sinarmas Energy and Mining - Indonesia
- Australian Coal Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- South Luzon Thermal Energy Corporation
- Krishnapatnam Port Company Ltd. - India
- Indo Tambangraya Megah - Indonesia
- Latin American Coal - Colombia
- Central Electricity Authority - India
- Renaissance Capital - South Africa
- Chettinad Cement Corporation Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Neyveli Lignite Corporation Ltd, - India
- Leighton Contractors Pty Ltd - Australia
- PTC India Limited - India
- Standard Chartered Bank - UAE
- Rio Tinto Coal - Australia
- Global Business Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- Mercuria Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bhatia International Limited - India
- Miang Besar Coal Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Heidelberg Cement - Germany
- Power Finance Corporation Ltd., India
- GVK Power & Infra Limited - India
- Bhoruka Overseas - Indonesia
- Meenaskhi Energy Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Australian Commodity Traders Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Malabar Cements Ltd - India
- Vedanta Resources Plc - India
- CIMB Investment Bank - Malaysia
- Altura Mining Limited, Indonesia
- Oldendorff Carriers - Singapore
- Planning Commission, India
- GMR Energy Limited - India
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- Pipit Mutiara Jaya. PT, Indonesia
- Indogreen Group - Indonesia
- Bukit Baiduri Energy - Indonesia
- Wood Mackenzie - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Straits Asia Resources Limited - Singapore
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Cigading International Bulk Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Commonwealth Bank - Australia
- Parliament of New Zealand
- Attock Cement Pakistan Limited
- Larsen & Toubro Limited - India
- Kartika Selabumi Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Semirara Mining Corp, Philippines
- Aditya Birla Group - India
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Star Paper Mills Limited - India
- Ministry of Transport, Egypt
- India Bulls Power Limited - India
- Goldman Sachs - Singapore
- AsiaOL BioFuels Corp., Philippines
- Bayan Resources Tbk. - Indonesia
- GAC Shipping (India) Pvt Ltd
- Carbofer General Trading SA - India
- Posco Energy - South Korea
- Parry Sugars Refinery, India
- CNBM International Corporation - China
- Pendopo Energi Batubara - Indonesia
- Orica Mining Services - Indonesia
- Meralco Power Generation, Philippines
- Ambuja Cements Ltd - India
- Siam City Cement - Thailand
- Indian Oil Corporation Limited
- Antam Resourcindo - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Mjunction Services Limited - India
- Petron Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Eastern Coal Council - USA
- Karaikal Port Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Singapore Mercantile Exchange
- Indonesian Coal Mining Association
- Deloitte Consulting - India
- Tata Chemicals Ltd - India
- The University of Queensland
- Medco Energi Mining Internasional
- Mercator Lines Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Generating Authority of Thailand
- Central Java Power - Indonesia
- TeaM Sual Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Grasim Industreis Ltd - India
- Binh Thuan Hamico - Vietnam
- Sakthi Sugars Limited - India
- Savvy Resources Ltd - HongKong
- Madhucon Powers Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- VISA Power Limited - India
- IHS Mccloskey Coal Group - USA
- MS Steel International - UAE
- Ministry of Mines - Canada
- Georgia Ports Authority, United States
- Kapuas Tunggal Persada - Indonesia
- Orica Australia Pty. Ltd.
- LBH Netherlands Bv - Netherlands
- Chamber of Mines of South Africa
- Tamil Nadu electricity Board
- TNB Fuel Sdn Bhd - Malaysia
- Africa Commodities Group - South Africa
- Intertek Mineral Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- The State Trading Corporation of India Ltd
- Barasentosa Lestari - Indonesia
- Videocon Industries ltd - India
- Indian Energy Exchange, India
- Interocean Group of Companies - India
- Petrochimia International Co. Ltd.- Taiwan
- Trasteel International SA, Italy
- Formosa Plastics Group - Taiwan
- Rashtriya Ispat Nigam Limited - India
- Bharathi Cement Corporation - India
- Cement Manufacturers Association - India
- Kalimantan Lumbung Energi - Indonesia
- McConnell Dowell - Australia
- Sindya Power Generating Company Private Ltd
- Karbindo Abesyapradhi - Indoneisa
- Manunggal Multi Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- Merrill Lynch Commodities Europe
- Lanco Infratech Ltd - India
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Minerals Council of Australia
- New Zealand Coal & Carbon
- Kohat Cement Company Ltd. - Pakistan
- Port Waratah Coal Services - Australia
- Maharashtra Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Link Ltd, New Zealand
- Bhushan Steel Limited - India
- Edison Trading Spa - Italy
- Global Green Power PLC Corporation, Philippines
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