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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, 28 August 15
DRY BULK SHIP OWNER OPTIMISTIC ABOUT FUTURE PROSPECTS OF THE MARKET: NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Dry bulk ship owner Golden Ocean appeared optimistic on the long term prospects of the dry bulk market, mainly thanks to an expected resolution of ...
Friday, 28 August 15
COAL PRODUCTION IN THE U.S. FOR THE WEEK ENDING AUGUST 22 ROSE FOR THE THIRD STRAIGHT WEEK
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 18.5 million shor ...
Friday, 28 August 15
BANPU STRENGTHENS GROWTH PLAN
Coal Business: Asia-Pacific Synergies Increase Competitiveness for Premium Export Market.
Banpu Public Company Limited (BANPU) strengthens its ...
Thursday, 27 August 15
RATES FOR CAPES REMAINED ON A FREE FALL LAST WEEK - INTERMODAL
COALspot.com: Keeping everyone on their toes with the volatility seen in August, the Dry Bulk market undoubtedly remains a steady provider of chall ...
Wednesday, 26 August 15
MARKET INSIGHT - STRATOS TINIAKOS
It’s always interesting to comment on the market when big economies around the world are facing troubling times. Following the collapse of th ...
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- ICICI Bank Limited - India
- Directorate Of Revenue Intelligence - India
- Kobexindo Tractors - Indoneisa
- Goldman Sachs - Singapore
- PNOC Exploration Corporation - Philippines
- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- GVK Power & Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Power Finance Corporation Ltd., India
- Orica Australia Pty. Ltd.
- Bukit Makmur.PT - Indonesia
- Global Business Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Samtan Co., Ltd - South Korea
- Parry Sugars Refinery, India
- Essar Steel Hazira Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- India Bulls Power Limited - India
- Simpson Spence & Young - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Thiess Contractors Indonesia
- Bayan Resources Tbk. - Indonesia
- McConnell Dowell - Australia
- Grasim Industreis Ltd - India
- Port Waratah Coal Services - Australia
- Interocean Group of Companies - India
- Semirara Mining and Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Globalindo Alam Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- ASAPP Information Group - India
- Oldendorff Carriers - Singapore
- Kaltim Prima Coal - Indonesia
- Attock Cement Pakistan Limited
- Malabar Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Makarim & Taira - Indonesia
- Kepco SPC Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Cigading International Bulk Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Global Coal Blending Company Limited - Australia
- Parliament of New Zealand
- Deloitte Consulting - India
- Bhoruka Overseas - Indonesia
- Xindia Steels Limited - India
- The State Trading Corporation of India Ltd
- Merrill Lynch Commodities Europe
- Baramulti Group, Indonesia
- Heidelberg Cement - Germany
- LBH Netherlands Bv - Netherlands
- Ambuja Cements Ltd - India
- Sojitz Corporation - Japan
- Carbofer General Trading SA - India
- Directorate General of MIneral and Coal - Indonesia
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Karaikal Port Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- Agrawal Coal Company - India
- Kumho Petrochemical, South Korea
- White Energy Company Limited
- Larsen & Toubro Limited - India
- New Zealand Coal & Carbon
- Krishnapatnam Port Company Ltd. - India
- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- SMC Global Power, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Marubeni Corporation - India
- Wood Mackenzie - Singapore
- Sinarmas Energy and Mining - Indonesia
- Anglo American - United Kingdom
- Meenaskhi Energy Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- Ministry of Finance - Indonesia
- Indo Tambangraya Megah - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Madhucon Powers Ltd - India
- Africa Commodities Group - South Africa
- Ministry of Mines - Canada
- Mintek Dendrill Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Petron Corporation, Philippines
- GMR Energy Limited - India
- Energy Development Corp, Philippines
- PTC India Limited - India
- Lanco Infratech Ltd - India
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Therma Luzon, Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Independent Power Producers Association of India
- Wilmar Investment Holdings
- Videocon Industries ltd - India
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- Indika Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Economic Council, Georgia
- Semirara Mining Corp, Philippines
- Orica Mining Services - Indonesia
- Rio Tinto Coal - Australia
- Ministry of Transport, Egypt
- SMG Consultants - Indonesia
- Tata Chemicals Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Trasteel International SA, Italy
- Eastern Energy - Thailand
- Sindya Power Generating Company Private Ltd
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- Central Java Power - Indonesia
- Price Waterhouse Coopers - Russia
- Gujarat Mineral Development Corp Ltd - India
- Maheswari Brothers Coal Limited - India
- Coal and Oil Company - UAE
- Banpu Public Company Limited - Thailand
- Commonwealth Bank - Australia
- IEA Clean Coal Centre - UK
- Straits Asia Resources Limited - Singapore
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- The Treasury - Australian Government
- Mercator Lines Limited - India
- CNBM International Corporation - China
- CIMB Investment Bank - Malaysia
- Australian Commodity Traders Exchange
- Tamil Nadu electricity Board
- Intertek Mineral Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indogreen Group - Indonesia
- Planning Commission, India
- Siam City Cement PLC, Thailand
- Kohat Cement Company Ltd. - Pakistan
- Minerals Council of Australia
- Rashtriya Ispat Nigam Limited - India
- VISA Power Limited - India
- Iligan Light & Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- IHS Mccloskey Coal Group - USA
- Pendopo Energi Batubara - Indonesia
- Australian Coal Association
- Manunggal Multi Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Singapore Mercantile Exchange
- AsiaOL BioFuels Corp., Philippines
- Medco Energi Mining Internasional
- Bhushan Steel Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Standard Chartered Bank - UAE
- Aboitiz Power Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Dalmia Cement Bharat India
- Salva Resources Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Barasentosa Lestari - Indonesia
- PowerSource Philippines DevCo
- Chettinad Cement Corporation Ltd - India
- Thai Mozambique Logistica
- TNB Fuel Sdn Bhd - Malaysia
- Riau Bara Harum - Indonesia
- Indian Energy Exchange, India
- Formosa Plastics Group - Taiwan
- Edison Trading Spa - Italy
- Kalimantan Lumbung Energi - Indonesia
- Bhatia International Limited - India
- San Jose City I Power Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Renaissance Capital - South Africa
- Mercuria Energy - Indonesia
- Sakthi Sugars Limited - India
- Timah Investasi Mineral - Indoneisa
- Borneo Indobara - Indonesia
- Posco Energy - South Korea
- Global Green Power PLC Corporation, Philippines
- London Commodity Brokers - England
- Latin American Coal - Colombia
- Bulk Trading Sa - Switzerland
- GN Power Mariveles Coal Plant, Philippines
- Sarangani Energy Corporation, Philippines
- Aditya Birla Group - India
- Coastal Gujarat Power Limited - India
- Metalloyd Limited - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Indonesian Coal Mining Association
- Bharathi Cement Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Romanian Commodities Exchange
- The University of Queensland
- Central Electricity Authority - India
- Siam City Cement - Thailand
- Sree Jayajothi Cements Limited - India
- GAC Shipping (India) Pvt Ltd
- Star Paper Mills Limited - India
- International Coal Ventures Pvt Ltd - India
- Sical Logistics Limited - India
- Indian Oil Corporation Limited
- Eastern Coal Council - USA
- Vizag Seaport Private Limited - India
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
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