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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, 09 March 15
CHINA'S IMPORTS - NEVER MORE IMPORTANT TO SHIPPING? - CLARKSONS
Over the last 15 years China has led maritime forecasters a right old dance. In 2002, rumours that Chinese iron ore imports were about to take off ...
Sunday, 08 March 15
FREIGHT RATES FROM INDONESIA TO INDIA IS TRENDING UP
COALspot.com: The freight market continued to see gains this week and all the indices were rose except for Cape index. The BDI was increased 4.62 p ...
Friday, 06 March 15
BALTIC DRY INDEX: IS THIS POWERFUL INDICATOR SIGNALING A GLOBAL RECESSION? - STREET AUTHORITY
Although memories of the Great Recession linger, a case can be made that better days lie ahead.
That’s because central banks around the ...
Friday, 06 March 15
U.S. WEEKLY COAL PRODUCTION ROSE 3.5% WEEK ON WEEK
COALspot.com – United States the world's one of the largest coal producers, produced approximately 17.1 million short tons (mmst) of coal ...
Thursday, 05 March 15
PANAMAX : THE ATLANTIC ROUND IS NOW PAYING AROUND US$ 5K PER DAY
COALspot.com: Handy - The activity in the handy/supra segment is back. “ We see more fresh cargo in the market for 2nd half March dates ...
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- Price Waterhouse Coopers - Russia
- Indogreen Group - Indonesia
- Bharathi Cement Corporation - India
- Directorate Of Revenue Intelligence - India
- Xindia Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Romanian Commodities Exchange
- AsiaOL BioFuels Corp., Philippines
- The University of Queensland
- CIMB Investment Bank - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Global Green Power PLC Corporation, Philippines
- Ministry of Mines - Canada
- Lanco Infratech Ltd - India
- Eastern Coal Council - USA
- Bayan Resources Tbk. - Indonesia
- Coastal Gujarat Power Limited - India
- Eastern Energy - Thailand
- White Energy Company Limited
- Rashtriya Ispat Nigam Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vedanta Resources Plc - India
- Samtan Co., Ltd - South Korea
- Alfred C Toepfer International GmbH - Germany
- Cigading International Bulk Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Sical Logistics Limited - India
- Edison Trading Spa - Italy
- ASAPP Information Group - India
- Star Paper Mills Limited - India
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Indonesian Coal Mining Association
- Bulk Trading Sa - Switzerland
- South Luzon Thermal Energy Corporation
- Gujarat Sidhee Cement - India
- MS Steel International - UAE
- PowerSource Philippines DevCo
- TeaM Sual Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Iligan Light & Power Inc, Philippines
- Energy Link Ltd, New Zealand
- PNOC Exploration Corporation - Philippines
- Wilmar Investment Holdings
- Mjunction Services Limited - India
- Australian Commodity Traders Exchange
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- Jorong Barutama Greston.PT - Indonesia
- Attock Cement Pakistan Limited
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Mercuria Energy - Indonesia
- The Treasury - Australian Government
- IEA Clean Coal Centre - UK
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Interocean Group of Companies - India
- TNB Fuel Sdn Bhd - Malaysia
- Pendopo Energi Batubara - Indonesia
- International Coal Ventures Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Simpson Spence & Young - Indonesia
- Grasim Industreis Ltd - India
- Kepco SPC Power Corporation, Philippines
- ICICI Bank Limited - India
- SMG Consultants - Indonesia
- Marubeni Corporation - India
- Indian Oil Corporation Limited
- Electricity Authority, New Zealand
- Timah Investasi Mineral - Indoneisa
- Global Coal Blending Company Limited - Australia
- Kartika Selabumi Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Globalindo Alam Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Bukit Asam (Persero) Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Australian Coal Association
- Binh Thuan Hamico - Vietnam
- Madhucon Powers Ltd - India
- The State Trading Corporation of India Ltd
- Sarangani Energy Corporation, Philippines
- Siam City Cement - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kapuas Tunggal Persada - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bahari Cakrawala Sebuku - Indonesia
- GMR Energy Limited - India
- Ind-Barath Power Infra Limited - India
- Makarim & Taira - Indonesia
- Central Java Power - Indonesia
- Manunggal Multi Energi - Indonesia
- Africa Commodities Group - South Africa
- Essar Steel Hazira Ltd - India
- Oldendorff Carriers - Singapore
- Billiton Holdings Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Borneo Indobara - Indonesia
- Thiess Contractors Indonesia
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- Jindal Steel & Power Ltd - India
- Chettinad Cement Corporation Ltd - India
- Sindya Power Generating Company Private Ltd
- Parry Sugars Refinery, India
- Savvy Resources Ltd - HongKong
- Gujarat Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Aboitiz Power Corporation - Philippines
- Goldman Sachs - Singapore
- CNBM International Corporation - China
- Energy Development Corp, Philippines
- Merrill Lynch Commodities Europe
- Latin American Coal - Colombia
- Mercator Lines Limited - India
- VISA Power Limited - India
- Indian Energy Exchange, India
- Mintek Dendrill Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Renaissance Capital - South Africa
- Thai Mozambique Logistica
- Banpu Public Company Limited - Thailand
- Toyota Tsusho Corporation, Japan
- Larsen & Toubro Limited - India
- Commonwealth Bank - Australia
- SMC Global Power, Philippines
- Tamil Nadu electricity Board
- Trasteel International SA, Italy
- Bhoruka Overseas - Indonesia
- Carbofer General Trading SA - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coalindo Energy - Indonesia
- Agrawal Coal Company - India
- Rio Tinto Coal - Australia
- SN Aboitiz Power Inc, Philippines
- Economic Council, Georgia
- Jaiprakash Power Ventures ltd
- Vizag Seaport Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Intertek Mineral Services - Indonesia
- Riau Bara Harum - Indonesia
- Ministry of Transport, Egypt
- GN Power Mariveles Coal Plant, Philippines
- Independent Power Producers Association of India
- Kideco Jaya Agung - Indonesia
- Parliament of New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Altura Mining Limited, Indonesia
- Cement Manufacturers Association - India
- Videocon Industries ltd - India
- Central Electricity Authority - India
- Petrochimia International Co. Ltd.- Taiwan
- Barasentosa Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- Sojitz Corporation - Japan
- Planning Commission, India
- Bukit Makmur.PT - Indonesia
- Siam City Cement PLC, Thailand
- Posco Energy - South Korea
- London Commodity Brokers - England
- Therma Luzon, Inc, Philippines
- Anglo American - United Kingdom
- Kaltim Prima Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- Indika Energy - Indonesia
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- Bhushan Steel Limited - India
- Leighton Contractors Pty Ltd - Australia
- Malabar Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Meralco Power Generation, Philippines
- Heidelberg Cement - Germany
- Formosa Plastics Group - Taiwan
- Standard Chartered Bank - UAE
- Tata Chemicals Ltd - India
- Meenaskhi Energy Private Limited - India
- McConnell Dowell - Australia
- Uttam Galva Steels Limited - India
- Orica Mining Services - Indonesia
- Medco Energi Mining Internasional
- Chamber of Mines of South Africa
- Minerals Council of Australia
- Ministry of Finance - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Port Waratah Coal Services - Australia
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- Antam Resourcindo - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Aditya Birla Group - India
- Kohat Cement Company Ltd. - Pakistan
- Deloitte Consulting - India
- Electricity Generating Authority of Thailand
- Baramulti Group, Indonesia
- Bangladesh Power Developement Board
- Ambuja Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
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