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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, 08 June 16
THE DRY BULK MARKET KEPT MOVING SIDEWAYS LAST WEEK; SECOND HAND PURCHASES MOVING NORTH - INTERMODAL
Once again its Posidonia time and the biannual exhibition takes place during a very warm June here in Athens, as if the performance of the dry bulk ...
Tuesday, 07 June 16
CS COAL INDEX ROSE FOR SECOND STRAIGHT WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin was up 0.38 percent week over week to averaging $39.16 per ton this past week, shows ...
Monday, 06 June 16
BDI GAINED ON A STRONGER DEMAND FOR CAPESIZE SHIPS
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities rose this past week on a stronger demand for Capesize ves ...
Friday, 03 June 16
DRY BULK VESSEL DELIVERIES COULD BE LESS THAN 50 MILLION DWT IN 2016, AS OWNERS DELAY OR CANCEL NEWBUILDING ORDERS
The dry bulk market has been caught between a rock and a hard place over the course of the past couple of years, as on one hand demand has plunged, ...
Friday, 03 June 16
U.S WEEKLY COAL PRODUCTION SLIDES 1.3% - EIA
COALspot.com – U.S the world’s second largest coal producer has produced approximately totaled an estimated 11.5 million short tons (mm ...
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- Kohat Cement Company Ltd. - Pakistan
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- Trasteel International SA, Italy
- Kideco Jaya Agung - Indonesia
- Indonesian Coal Mining Association
- SMC Global Power, Philippines
- Indogreen Group - Indonesia
- Australian Coal Association
- Energy Development Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Singapore Mercantile Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Makarim & Taira - Indonesia
- Sindya Power Generating Company Private Ltd
- GAC Shipping (India) Pvt Ltd
- IEA Clean Coal Centre - UK
- Ministry of Finance - Indonesia
- Carbofer General Trading SA - India
- AsiaOL BioFuels Corp., Philippines
- Sree Jayajothi Cements Limited - India
- Medco Energi Mining Internasional
- Gujarat Mineral Development Corp Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Indian Oil Corporation Limited
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Commonwealth Bank - Australia
- Bangladesh Power Developement Board
- Metalloyd Limited - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Uttam Galva Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- European Bulk Services B.V. - Netherlands
- Electricity Authority, New Zealand
- Heidelberg Cement - Germany
- Chamber of Mines of South Africa
- Africa Commodities Group - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Larsen & Toubro Limited - India
- Lanco Infratech Ltd - India
- Aboitiz Power Corporation - Philippines
- MS Steel International - UAE
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Mercator Lines Limited - India
- Globalindo Alam Lestari - Indonesia
- Vedanta Resources Plc - India
- Leighton Contractors Pty Ltd - Australia
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Maharashtra Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Price Waterhouse Coopers - Russia
- Salva Resources Pvt Ltd - India
- Romanian Commodities Exchange
- Krishnapatnam Port Company Ltd. - India
- Antam Resourcindo - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Thai Mozambique Logistica
- Orica Australia Pty. Ltd.
- New Zealand Coal & Carbon
- Kumho Petrochemical, South Korea
- Star Paper Mills Limited - India
- Tamil Nadu electricity Board
- South Luzon Thermal Energy Corporation
- McConnell Dowell - Australia
- Intertek Mineral Services - Indonesia
- Bharathi Cement Corporation - India
- Anglo American - United Kingdom
- Maheswari Brothers Coal Limited - India
- TeaM Sual Corporation - Philippines
- The State Trading Corporation of India Ltd
- TNB Fuel Sdn Bhd - Malaysia
- LBH Netherlands Bv - Netherlands
- Central Electricity Authority - India
- Directorate General of MIneral and Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Latin American Coal - Colombia
- Kaltim Prima Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Economic Council, Georgia
- Global Business Power Corporation, Philippines
- Marubeni Corporation - India
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Wilmar Investment Holdings
- Wood Mackenzie - Singapore
- Chettinad Cement Corporation Ltd - India
- Vizag Seaport Private Limited - India
- Mintek Dendrill Indonesia
- Jaiprakash Power Ventures ltd
- Central Java Power - Indonesia
- Parry Sugars Refinery, India
- Baramulti Group, Indonesia
- VISA Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- Sarangani Energy Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Bulk Trading Sa - Switzerland
- Renaissance Capital - South Africa
- Tata Chemicals Ltd - India
- Toyota Tsusho Corporation, Japan
- Kartika Selabumi Mining - Indonesia
- Sakthi Sugars Limited - India
- OPG Power Generation Pvt Ltd - India
- ICICI Bank Limited - India
- Electricity Generating Authority of Thailand
- Malabar Cements Ltd - India
- White Energy Company Limited
- Iligan Light & Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Xindia Steels Limited - India
- Grasim Industreis Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Madhucon Powers Ltd - India
- Kapuas Tunggal Persada - Indonesia
- India Bulls Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Attock Cement Pakistan Limited
- Independent Power Producers Association of India
- Videocon Industries ltd - India
- Meenaskhi Energy Private Limited - India
- Samtan Co., Ltd - South Korea
- Indian Energy Exchange, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thiess Contractors Indonesia
- SMG Consultants - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Posco Energy - South Korea
- Banpu Public Company Limited - Thailand
- Global Coal Blending Company Limited - Australia
- Aditya Birla Group - India
- Mercuria Energy - Indonesia
- PTC India Limited - India
- GVK Power & Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- Dalmia Cement Bharat India
- Savvy Resources Ltd - HongKong
- Meralco Power Generation, Philippines
- Australian Commodity Traders Exchange
- Ministry of Mines - Canada
- GMR Energy Limited - India
- Jindal Steel & Power Ltd - India
- Georgia Ports Authority, United States
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Altura Mining Limited, Indonesia
- Ambuja Cements Ltd - India
- Coal and Oil Company - UAE
- Sojitz Corporation - Japan
- Formosa Plastics Group - Taiwan
- PetroVietnam Power Coal Import and Supply Company
- Borneo Indobara - Indonesia
- Interocean Group of Companies - India
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Green Power PLC Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Manunggal Multi Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Oldendorff Carriers - Singapore
- IHS Mccloskey Coal Group - USA
- Directorate Of Revenue Intelligence - India
- Rio Tinto Coal - Australia
- Simpson Spence & Young - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Port Waratah Coal Services - Australia
- PowerSource Philippines DevCo
- Coalindo Energy - Indonesia
- Gujarat Sidhee Cement - India
- Neyveli Lignite Corporation Ltd, - India
- Orica Mining Services - Indonesia
- Indika Energy - Indonesia
- Agrawal Coal Company - India
- The Treasury - Australian Government
- Alfred C Toepfer International GmbH - Germany
- International Coal Ventures Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- Petron Corporation, Philippines
- Parliament of New Zealand
- Standard Chartered Bank - UAE
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- Goldman Sachs - Singapore
- Planning Commission, India
- Pendopo Energi Batubara - Indonesia
- ASAPP Information Group - India
- Bayan Resources Tbk. - Indonesia
- Deloitte Consulting - India
- Minerals Council of Australia
- Bhatia International Limited - India
- Bhushan Steel Limited - India
- PNOC Exploration Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Eastern Coal Council - USA
- Edison Trading Spa - Italy
- Coastal Gujarat Power Limited - India
- Eastern Energy - Thailand
- The University of Queensland
- Barasentosa Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- Siam City Cement PLC, Thailand
- Semirara Mining Corp, Philippines
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