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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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Thursday, 26 February 15
DRY BULK MARKET LOOKING FOR POSITIVE MOMENTUM, BUT PROSPECTS REMAIN DIM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
As the Baltic Dry Index (BDI) inched a bit higher over the past couple of sessions and the Chinese are returning to the market after a week long hi ...
Wednesday, 25 February 15
PORT OF NEWCASTLE SHIPPED 13.16MT OF COAL IN JANUARY; DECLINED 16.70% FROM A MONTH AGO
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $1.15 billio ...
Wednesday, 25 February 15
BDI SLIPPING ONCE MORE TO FRESH HISTORICAL LOWS
COALspot.com: With the BDI slipping once more to fresh historical lows and the Chinese holidays underway, signs for a positive reversal in the Dry ...
Tuesday, 24 February 15
FOB INDONESIA COAL SWAP SET TO RALLY
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 rose week over week and month on month.
The Q2 swap increased US$ 3.30 (+7.30%) ...
Tuesday, 24 February 15
Q3' FOB RICHARDS BAY COAL SWAP CLOSED $59.80 W/E 20 FEB
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 surge month over month and decline week on week.
The Q2 swap has soar ...
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- Miang Besar Coal Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Attock Cement Pakistan Limited
- Indian Oil Corporation Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Sakthi Sugars Limited - India
- Riau Bara Harum - Indonesia
- Central Java Power - Indonesia
- Thai Mozambique Logistica
- Bangladesh Power Developement Board
- Billiton Holdings Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Toyota Tsusho Corporation, Japan
- Bhushan Steel Limited - India
- Straits Asia Resources Limited - Singapore
- Merrill Lynch Commodities Europe
- Bayan Resources Tbk. - Indonesia
- Singapore Mercantile Exchange
- Heidelberg Cement - Germany
- Economic Council, Georgia
- Grasim Industreis Ltd - India
- GMR Energy Limited - India
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- Meralco Power Generation, Philippines
- Electricity Authority, New Zealand
- Renaissance Capital - South Africa
- Sinarmas Energy and Mining - Indonesia
- Coastal Gujarat Power Limited - India
- CIMB Investment Bank - Malaysia
- Kartika Selabumi Mining - Indonesia
- Star Paper Mills Limited - India
- Asmin Koalindo Tuhup - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- Medco Energi Mining Internasional
- India Bulls Power Limited - India
- McConnell Dowell - Australia
- Sical Logistics Limited - India
- Posco Energy - South Korea
- Xindia Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- CNBM International Corporation - China
- Australian Coal Association
- Anglo American - United Kingdom
- Central Electricity Authority - India
- Borneo Indobara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Dalmia Cement Bharat India
- Therma Luzon, Inc, Philippines
- Standard Chartered Bank - UAE
- Vedanta Resources Plc - India
- Siam City Cement PLC, Thailand
- SN Aboitiz Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Africa Commodities Group - South Africa
- Uttam Galva Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Savvy Resources Ltd - HongKong
- Goldman Sachs - Singapore
- Vizag Seaport Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- New Zealand Coal & Carbon
- Power Finance Corporation Ltd., India
- ICICI Bank Limited - India
- Madhucon Powers Ltd - India
- Planning Commission, India
- Sojitz Corporation - Japan
- PowerSource Philippines DevCo
- GVK Power & Infra Limited - India
- Energy Link Ltd, New Zealand
- Barasentosa Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Price Waterhouse Coopers - Russia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thiess Contractors Indonesia
- Mjunction Services Limited - India
- Antam Resourcindo - Indonesia
- European Bulk Services B.V. - Netherlands
- Gujarat Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- ASAPP Information Group - India
- Karbindo Abesyapradhi - Indoneisa
- San Jose City I Power Corp, Philippines
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- Kumho Petrochemical, South Korea
- Chamber of Mines of South Africa
- Agrawal Coal Company - India
- Videocon Industries ltd - India
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- Tata Chemicals Ltd - India
- Iligan Light & Power Inc, Philippines
- Energy Development Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Australian Commodity Traders Exchange
- Ministry of Mines - Canada
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- White Energy Company Limited
- Binh Thuan Hamico - Vietnam
- Marubeni Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Eastern Coal Council - USA
- Carbofer General Trading SA - India
- Manunggal Multi Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- Coal and Oil Company - UAE
- VISA Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Electricity Generating Authority of Thailand
- Metalloyd Limited - United Kingdom
- Wood Mackenzie - Singapore
- The State Trading Corporation of India Ltd
- Bhatia International Limited - India
- Altura Mining Limited, Indonesia
- Minerals Council of Australia
- GN Power Mariveles Coal Plant, Philippines
- Maheswari Brothers Coal Limited - India
- Sree Jayajothi Cements Limited - India
- LBH Netherlands Bv - Netherlands
- Interocean Group of Companies - India
- Mintek Dendrill Indonesia
- Kapuas Tunggal Persada - Indonesia
- Indo Tambangraya Megah - Indonesia
- Directorate Of Revenue Intelligence - India
- Baramulti Group, Indonesia
- Indian Energy Exchange, India
- GAC Shipping (India) Pvt Ltd
- IEA Clean Coal Centre - UK
- Mercator Lines Limited - India
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- Jaiprakash Power Ventures ltd
- Karaikal Port Pvt Ltd - India
- SMC Global Power, Philippines
- Coalindo Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PTC India Limited - India
- London Commodity Brokers - England
- Aboitiz Power Corporation - Philippines
- Simpson Spence & Young - Indonesia
- OPG Power Generation Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Krishnapatnam Port Company Ltd. - India
- Global Business Power Corporation, Philippines
- The Treasury - Australian Government
- Independent Power Producers Association of India
- Rio Tinto Coal - Australia
- Ind-Barath Power Infra Limited - India
- Romanian Commodities Exchange
- Salva Resources Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Lanco Infratech Ltd - India
- Petron Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Larsen & Toubro Limited - India
- Ministry of Finance - Indonesia
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- International Coal Ventures Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meenaskhi Energy Private Limited - India
- Wilmar Investment Holdings
- IHS Mccloskey Coal Group - USA
- Formosa Plastics Group - Taiwan
- Global Green Power PLC Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercuria Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Transport, Egypt
- TeaM Sual Corporation - Philippines
- Orica Mining Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Indonesian Coal Mining Association
- Parliament of New Zealand
- Latin American Coal - Colombia
- Jindal Steel & Power Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Indogreen Group - Indonesia
- SMG Consultants - Indonesia
- Malabar Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Parry Sugars Refinery, India
- Commonwealth Bank - Australia
- MS Steel International - UAE
- Global Coal Blending Company Limited - Australia
- Alfred C Toepfer International GmbH - Germany
- Sarangani Energy Corporation, Philippines
- Eastern Energy - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Sindya Power Generating Company Private Ltd
- The University of Queensland
- Oldendorff Carriers - Singapore
- Makarim & Taira - Indonesia
- Indika Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
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