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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, 28 September 15
CAPESIZE FLEET INCREASES BY JUST 1 VESSEL DURING LAST 12 MONTHS, IN POSITIVE SIGN FOR DRY BULK SHIPPING MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
After a rather tumultuous period, the shipping industry and more particular the dry bulk market has started to adjust to the new realities of globa ...
Monday, 28 September 15
Q1'16 CFR SOUTH CHINA COAL SWAP ROSE 2.73 PER CENT M-M
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery moved upward US$ 1.45 (3.04 %) per ton month over month.
A commodity ...
Sunday, 27 September 15
THE PANAMAX INDEX FELL 1.19 PCT WEEK OVER WEEK
COALspot.com: The BDI closed Friday (25/09/2015) at 943 points, down by 17 points compared to previous Friday closing (18/09/2015). The BDI wa ...
Friday, 25 September 15
COAL PRODUCTION IN THE U.S. FOR THE WEEK ENDING SEPTEMBER 19 ROSE 2.5% PER CENT W-W
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 17.8 million shor ...
Wednesday, 23 September 15
CAPESIZE: SPOT RATES HAVE INCREASED MORE THAN 70 PER CENT DURING LAST WEEK
Dry Bulk owners, always look at September as the time that the market “signals” what lies ahead for the remainder of the year. The Chin ...
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- Bhatia International Limited - India
- Eastern Energy - Thailand
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- GVK Power & Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- Economic Council, Georgia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Bayan Resources Tbk. - Indonesia
- Sree Jayajothi Cements Limited - India
- Parliament of New Zealand
- Leighton Contractors Pty Ltd - Australia
- The Treasury - Australian Government
- Gujarat Mineral Development Corp Ltd - India
- Timah Investasi Mineral - Indoneisa
- TeaM Sual Corporation - Philippines
- Sical Logistics Limited - India
- Heidelberg Cement - Germany
- Port Waratah Coal Services - Australia
- Ministry of Finance - Indonesia
- Globalindo Alam Lestari - Indonesia
- Attock Cement Pakistan Limited
- South Luzon Thermal Energy Corporation
- IEA Clean Coal Centre - UK
- Bharathi Cement Corporation - India
- Global Business Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Toyota Tsusho Corporation, Japan
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- Aboitiz Power Corporation - Philippines
- MS Steel International - UAE
- Kartika Selabumi Mining - Indonesia
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- Planning Commission, India
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- Metalloyd Limited - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Mercuria Energy - Indonesia
- The University of Queensland
- Petron Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Star Paper Mills Limited - India
- Lanco Infratech Ltd - India
- Edison Trading Spa - Italy
- Global Coal Blending Company Limited - Australia
- Indogreen Group - Indonesia
- Ministry of Mines - Canada
- Indonesian Coal Mining Association
- Chettinad Cement Corporation Ltd - India
- Medco Energi Mining Internasional
- Madhucon Powers Ltd - India
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- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- Energy Link Ltd, New Zealand
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- Thai Mozambique Logistica
- Semirara Mining Corp, Philippines
- Siam City Cement PLC, Thailand
- McConnell Dowell - Australia
- Central Electricity Authority - India
- CNBM International Corporation - China
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- Posco Energy - South Korea
- Power Finance Corporation Ltd., India
- European Bulk Services B.V. - Netherlands
- Orica Mining Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Essar Steel Hazira Ltd - India
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- Marubeni Corporation - India
- Kaltim Prima Coal - Indonesia
- Jindal Steel & Power Ltd - India
- Australian Coal Association
- Mintek Dendrill Indonesia
- Standard Chartered Bank - UAE
- Ministry of Transport, Egypt
- Sindya Power Generating Company Private Ltd
- OPG Power Generation Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Central Java Power - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Uttam Galva Steels Limited - India
- ICICI Bank Limited - India
- Carbofer General Trading SA - India
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- Energy Development Corp, Philippines
- Xindia Steels Limited - India
- VISA Power Limited - India
- Minerals Council of Australia
- Oldendorff Carriers - Singapore
- Barasentosa Lestari - Indonesia
- Bangladesh Power Developement Board
- Kepco SPC Power Corporation, Philippines
- Georgia Ports Authority, United States
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Thiess Contractors Indonesia
- Savvy Resources Ltd - HongKong
- Simpson Spence & Young - Indonesia
- The State Trading Corporation of India Ltd
- Makarim & Taira - Indonesia
- Manunggal Multi Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Borneo Indobara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Price Waterhouse Coopers - Russia
- London Commodity Brokers - England
- Iligan Light & Power Inc, Philippines
- White Energy Company Limited
- LBH Netherlands Bv - Netherlands
- Deloitte Consulting - India
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- Merrill Lynch Commodities Europe
- Therma Luzon, Inc, Philippines
- Electricity Authority, New Zealand
- Samtan Co., Ltd - South Korea
- Bhoruka Overseas - Indonesia
- Larsen & Toubro Limited - India
- Vedanta Resources Plc - India
- Commonwealth Bank - Australia
- Bukit Makmur.PT - Indonesia
- PTC India Limited - India
- New Zealand Coal & Carbon
- Electricity Generating Authority of Thailand
- Trasteel International SA, Italy
- Ambuja Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Mjunction Services Limited - India
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- Rio Tinto Coal - Australia
- Anglo American - United Kingdom
- Dalmia Cement Bharat India
- Holcim Trading Pte Ltd - Singapore
- Krishnapatnam Port Company Ltd. - India
- Orica Australia Pty. Ltd.
- Coastal Gujarat Power Limited - India
- Independent Power Producers Association of India
- Pendopo Energi Batubara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Mercator Lines Limited - India
- Straits Asia Resources Limited - Singapore
- Romanian Commodities Exchange
- GN Power Mariveles Coal Plant, Philippines
- Indian Oil Corporation Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meenaskhi Energy Private Limited - India
- Banpu Public Company Limited - Thailand
- San Jose City I Power Corp, Philippines
- Cement Manufacturers Association - India
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Grasim Industreis Ltd - India
- GAC Shipping (India) Pvt Ltd
- Formosa Plastics Group - Taiwan
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- Intertek Mineral Services - Indonesia
- Aditya Birla Group - India
- Indika Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Videocon Industries ltd - India
- India Bulls Power Limited - India
- Interocean Group of Companies - India
- Chamber of Mines of South Africa
- Sakthi Sugars Limited - India
- Wood Mackenzie - Singapore
- Altura Mining Limited, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Cigading International Bulk Terminal - Indonesia
- Eastern Coal Council - USA
- Gujarat Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Baramulti Group, Indonesia
- Salva Resources Pvt Ltd - India
- Malabar Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Coal and Oil Company - UAE
- Australian Commodity Traders Exchange
- Siam City Cement - Thailand
- Semirara Mining and Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Antam Resourcindo - Indonesia
- Renaissance Capital - South Africa
- SMC Global Power, Philippines
- Kumho Petrochemical, South Korea
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