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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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Monday, 14 December 15
CFR SOUTH CHINA COAL SWAP IS STILL SLIDING
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery declined US$ 0.93(2.18%) per ton month over month.
A commodity swap ...
Sunday, 13 December 15
THE LOW VESSEL DEMANDS PUSHED DOWN BALTIC DRY INDEX FURTHER DOWN
COALspot.com: The low vessel demand across nearly all vessel sizes pushed the Baltic Exchange’s main sea freight index further down in this F ...
Sunday, 13 December 15
DRY BULK RATES KEEP ON FALLING AS LOW VESSEL DEMAND IS STILL THE NORM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market nowadays is in an endless downward spiral, which as it turns out is unable to recover, at least as long as the current balance ...
Friday, 11 December 15
US COAL PRODUCTION UP 7.7% IN WEEK ENDED DECEMBER 5, 2015
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 16.1 million shor ...
Thursday, 10 December 15
LIENING CARGO - WHICH LIEN CLAUSE APPLIES TO THE BILL OF LADING? : WIKBORG REIN | HELLENIC SHIPPING NEWS
KNOWLEDGE TO ELEVATE
In a dry bulk market where a charterer is not paying freight or hire, its counterparty is often left to consider whether ...
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- Meralco Power Generation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Aboitiz Power Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Bulk Trading Sa - Switzerland
- Xindia Steels Limited - India
- Medco Energi Mining Internasional
- GN Power Mariveles Coal Plant, Philippines
- Toyota Tsusho Corporation, Japan
- Indika Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Standard Chartered Bank - UAE
- MS Steel International - UAE
- Energy Link Ltd, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Mintek Dendrill Indonesia
- Timah Investasi Mineral - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Bhoruka Overseas - Indonesia
- Indonesian Coal Mining Association
- Bharathi Cement Corporation - India
- Bangladesh Power Developement Board
- Mercator Lines Limited - India
- CNBM International Corporation - China
- ASAPP Information Group - India
- Central Electricity Authority - India
- Kideco Jaya Agung - Indonesia
- Ind-Barath Power Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- McConnell Dowell - Australia
- Eastern Coal Council - USA
- Ministry of Finance - Indonesia
- Africa Commodities Group - South Africa
- Meenaskhi Energy Private Limited - India
- GMR Energy Limited - India
- Edison Trading Spa - Italy
- Goldman Sachs - Singapore
- Carbofer General Trading SA - India
- Gujarat Sidhee Cement - India
- Interocean Group of Companies - India
- Ministry of Transport, Egypt
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Cement Manufacturers Association - India
- Semirara Mining and Power Corporation, Philippines
- Chamber of Mines of South Africa
- Anglo American - United Kingdom
- Videocon Industries ltd - India
- Madhucon Powers Ltd - India
- SMC Global Power, Philippines
- Sree Jayajothi Cements Limited - India
- Simpson Spence & Young - Indonesia
- Kaltim Prima Coal - Indonesia
- ICICI Bank Limited - India
- Cigading International Bulk Terminal - Indonesia
- Sojitz Corporation - Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Electricity Authority, New Zealand
- Aditya Birla Group - India
- Manunggal Multi Energi - Indonesia
- Sical Logistics Limited - India
- New Zealand Coal & Carbon
- Central Java Power - Indonesia
- Coalindo Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Neyveli Lignite Corporation Ltd, - India
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Metalloyd Limited - United Kingdom
- Antam Resourcindo - Indonesia
- Thai Mozambique Logistica
- San Jose City I Power Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Asmin Koalindo Tuhup - Indonesia
- Singapore Mercantile Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Barasentosa Lestari - Indonesia
- Siam City Cement - Thailand
- Orica Mining Services - Indonesia
- Samtan Co., Ltd - South Korea
- Lanco Infratech Ltd - India
- Jaiprakash Power Ventures ltd
- SMG Consultants - Indonesia
- Ambuja Cements Ltd - India
- Banpu Public Company Limited - Thailand
- India Bulls Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- London Commodity Brokers - England
- IHS Mccloskey Coal Group - USA
- Larsen & Toubro Limited - India
- Ceylon Electricity Board - Sri Lanka
- Pipit Mutiara Jaya. PT, Indonesia
- Oldendorff Carriers - Singapore
- Kartika Selabumi Mining - Indonesia
- Mercuria Energy - Indonesia
- Parry Sugars Refinery, India
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Iligan Light & Power Inc, Philippines
- Electricity Generating Authority of Thailand
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- PTC India Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Parliament of New Zealand
- Petron Corporation, Philippines
- The University of Queensland
- Globalindo Alam Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Tata Chemicals Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Georgia Ports Authority, United States
- Baramulti Group, Indonesia
- CIMB Investment Bank - Malaysia
- Bahari Cakrawala Sebuku - Indonesia
- Indian Energy Exchange, India
- Star Paper Mills Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Planning Commission, India
- Independent Power Producers Association of India
- Straits Asia Resources Limited - Singapore
- Rio Tinto Coal - Australia
- Minerals Council of Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Kumho Petrochemical, South Korea
- Power Finance Corporation Ltd., India
- Dalmia Cement Bharat India
- Bukit Asam (Persero) Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bayan Resources Tbk. - Indonesia
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- Salva Resources Pvt Ltd - India
- Tamil Nadu electricity Board
- Heidelberg Cement - Germany
- Malabar Cements Ltd - India
- Ministry of Mines - Canada
- Karbindo Abesyapradhi - Indoneisa
- PNOC Exploration Corporation - Philippines
- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- Economic Council, Georgia
- Rashtriya Ispat Nigam Limited - India
- Mjunction Services Limited - India
- South Luzon Thermal Energy Corporation
- Jindal Steel & Power Ltd - India
- Riau Bara Harum - Indonesia
- TeaM Sual Corporation - Philippines
- Deloitte Consulting - India
- Eastern Energy - Thailand
- Borneo Indobara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Sinarmas Energy and Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- The Treasury - Australian Government
- Sarangani Energy Corporation, Philippines
- Marubeni Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Trasteel International SA, Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- The State Trading Corporation of India Ltd
- Attock Cement Pakistan Limited
- PowerSource Philippines DevCo
- Australian Commodity Traders Exchange
- Pendopo Energi Batubara - Indonesia
- Uttam Galva Steels Limited - India
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- Energy Development Corp, Philippines
- Semirara Mining Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sakthi Sugars Limited - India
- LBH Netherlands Bv - Netherlands
- Bukit Makmur.PT - Indonesia
- Latin American Coal - Colombia
- Grasim Industreis Ltd - India
- Vizag Seaport Private Limited - India
- Romanian Commodities Exchange
- Kalimantan Lumbung Energi - Indonesia
- Wilmar Investment Holdings
- Global Coal Blending Company Limited - Australia
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- Maharashtra Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Australian Coal Association
- Vedanta Resources Plc - India
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- Indo Tambangraya Megah - Indonesia
- Posco Energy - South Korea
- Makarim & Taira - Indonesia
- Directorate Of Revenue Intelligence - India
- Indian Oil Corporation Limited
- Binh Thuan Hamico - Vietnam
- Indogreen Group - Indonesia
- Altura Mining Limited, Indonesia
- Commonwealth Bank - Australia
- Bukit Baiduri Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Agrawal Coal Company - India
- European Bulk Services B.V. - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Renaissance Capital - South Africa
- Bhushan Steel Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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