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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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Wednesday, 07 January 15
FUEL EFFICIENT SHIPS MAKE LESS SENSE IN LOWER BUNKER PRICE MARKET, BUT FUEL COSTS ARE BOUND TO RISE AGAIN
The shipping industry entered 2015 on mixed emotions, as a relatively buoyant tanker market is met by a rather lackluster dry bulk market. Still, a ...
Wednesday, 07 January 15
2015 IS RIDDLED WITH CHALLENGES FOR THE SHIPPING SECTOR, MOST NOTABLY THE DRY BULK MARKET - HELLENIC SHIPPING NEWS
As the new year has now set foot for real, many are still looking to detect what’s in store for the various shipping markets, with the first ...
Tuesday, 06 January 15
SHIPPING MUST ADOPT CAN-DO ATTITUDE IN 2015 - MOORE STEPHENS
Shipping needs to adopt a can-do attitude in order to successfully meet the challenges which are likely to come its way in 2015.
Shipping part ...
Tuesday, 06 January 15
Q4' 15 FOB INDONESIA COAL SWAP CLOSED 1.81% HIGHER COMPARED TO Q1' 15 CLOSING
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 lost month on month and week over week.
The Q1 swap has lost US$ 0.74 (-1.51%) m ...
Tuesday, 06 January 15
FOB RICHARDS BAY COAL SWAPS LOST W-O-W AND M-O-M, SGX DATA SHOWS
COALspot.com: API 4 FOB Richards Bay Coal for delivery Q1' 2015 lost month on month and week over week.
The Q1 swap has lost US$ 3.52 (-5. ...
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- Lanco Infratech Ltd - India
- Grasim Industreis Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Economic Council, Georgia
- IEA Clean Coal Centre - UK
- SN Aboitiz Power Inc, Philippines
- Mercator Lines Limited - India
- ASAPP Information Group - India
- Savvy Resources Ltd - HongKong
- Makarim & Taira - Indonesia
- Vedanta Resources Plc - India
- Formosa Plastics Group - Taiwan
- San Jose City I Power Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Tata Chemicals Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Heidelberg Cement - Germany
- PTC India Limited - India
- Banpu Public Company Limited - Thailand
- Orica Mining Services - Indonesia
- New Zealand Coal & Carbon
- Indogreen Group - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Larsen & Toubro Limited - India
- Ministry of Finance - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Mjunction Services Limited - India
- TeaM Sual Corporation - Philippines
- Indika Energy - Indonesia
- Deloitte Consulting - India
- Indian Energy Exchange, India
- Independent Power Producers Association of India
- Coalindo Energy - Indonesia
- SMG Consultants - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Australian Coal Association
- Kideco Jaya Agung - Indonesia
- Straits Asia Resources Limited - Singapore
- Siam City Cement PLC, Thailand
- Karaikal Port Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- PNOC Exploration Corporation - Philippines
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- The University of Queensland
- Wood Mackenzie - Singapore
- Bhoruka Overseas - Indonesia
- Global Coal Blending Company Limited - Australia
- Australian Commodity Traders Exchange
- Trasteel International SA, Italy
- Bhatia International Limited - India
- Kapuas Tunggal Persada - Indonesia
- Sical Logistics Limited - India
- Petron Corporation, Philippines
- Bangladesh Power Developement Board
- GN Power Mariveles Coal Plant, Philippines
- Coastal Gujarat Power Limited - India
- Binh Thuan Hamico - Vietnam
- Minerals Council of Australia
- Neyveli Lignite Corporation Ltd, - India
- Antam Resourcindo - Indonesia
- The State Trading Corporation of India Ltd
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- SMC Global Power, Philippines
- Maheswari Brothers Coal Limited - India
- Global Business Power Corporation, Philippines
- Marubeni Corporation - India
- Eastern Coal Council - USA
- Commonwealth Bank - Australia
- Chettinad Cement Corporation Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Essar Steel Hazira Ltd - India
- Merrill Lynch Commodities Europe
- Kaltim Prima Coal - Indonesia
- Bhushan Steel Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Edison Trading Spa - Italy
- Malabar Cements Ltd - India
- VISA Power Limited - India
- Directorate Of Revenue Intelligence - India
- Miang Besar Coal Terminal - Indonesia
- Vizag Seaport Private Limited - India
- London Commodity Brokers - England
- Ministry of Mines - Canada
- Bank of Tokyo Mitsubishi UFJ Ltd
- Medco Energi Mining Internasional
- OPG Power Generation Pvt Ltd - India
- Baramulti Group, Indonesia
- Kobexindo Tractors - Indoneisa
- Uttam Galva Steels Limited - India
- Semirara Mining Corp, Philippines
- Singapore Mercantile Exchange
- Coal and Oil Company - UAE
- Kartika Selabumi Mining - Indonesia
- India Bulls Power Limited - India
- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- Leighton Contractors Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Kepco SPC Power Corporation, Philippines
- Agrawal Coal Company - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sojitz Corporation - Japan
- Georgia Ports Authority, United States
- Rio Tinto Coal - Australia
- Posco Energy - South Korea
- Africa Commodities Group - South Africa
- Manunggal Multi Energi - Indonesia
- GVK Power & Infra Limited - India
- Dalmia Cement Bharat India
- Thai Mozambique Logistica
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Mintek Dendrill Indonesia
- Pendopo Energi Batubara - Indonesia
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- Renaissance Capital - South Africa
- Price Waterhouse Coopers - Russia
- Jaiprakash Power Ventures ltd
- Chamber of Mines of South Africa
- GAC Shipping (India) Pvt Ltd
- IHS Mccloskey Coal Group - USA
- Madhucon Powers Ltd - India
- Meralco Power Generation, Philippines
- Globalindo Alam Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Orica Australia Pty. Ltd.
- LBH Netherlands Bv - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- European Bulk Services B.V. - Netherlands
- Riau Bara Harum - Indonesia
- Planning Commission, India
- Standard Chartered Bank - UAE
- ICICI Bank Limited - India
- Xindia Steels Limited - India
- Altura Mining Limited, Indonesia
- Timah Investasi Mineral - Indoneisa
- Aditya Birla Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Bharathi Cement Corporation - India
- Carbofer General Trading SA - India
- Eastern Energy - Thailand
- Ambuja Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Cement Manufacturers Association - India
- Aboitiz Power Corporation - Philippines
- Electricity Authority, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Asmin Koalindo Tuhup - Indonesia
- Wilmar Investment Holdings
- Romanian Commodities Exchange
- Power Finance Corporation Ltd., India
- MS Steel International - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sakthi Sugars Limited - India
- Bulk Trading Sa - Switzerland
- Jorong Barutama Greston.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Anglo American - United Kingdom
- CNBM International Corporation - China
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining and Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Metalloyd Limited - United Kingdom
- Central Java Power - Indonesia
- Simpson Spence & Young - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement - Thailand
- Intertek Mineral Services - Indonesia
- Star Paper Mills Limited - India
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- CIMB Investment Bank - Malaysia
- McConnell Dowell - Australia
- Latin American Coal - Colombia
- Salva Resources Pvt Ltd - India
- Attock Cement Pakistan Limited
- Energy Link Ltd, New Zealand
- Energy Development Corp, Philippines
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- Barasentosa Lestari - Indonesia
- Tamil Nadu electricity Board
- Sindya Power Generating Company Private Ltd
- Thiess Contractors Indonesia
- Rashtriya Ispat Nigam Limited - India
- Samtan Co., Ltd - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Borneo Indobara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Indonesian Coal Mining Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- South Luzon Thermal Energy Corporation
- Parry Sugars Refinery, India
- Bayan Resources Tbk. - Indonesia
- Bukit Makmur.PT - Indonesia
- Kumho Petrochemical, South Korea
- Bukit Baiduri Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Goldman Sachs - Singapore
- Ind-Barath Power Infra Limited - India
- Parliament of New Zealand
- Ministry of Transport, Egypt
- Therma Luzon, Inc, Philippines
- Interocean Group of Companies - India
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