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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, 13 November 14
MODERN DRY BULK SHIPS' PRICES START FIRMING UP - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
While the main story of the past few weeks has been the rebound of the dry bulk market, which has been a result of increased Chinese iron ore impor ...
Wednesday, 12 November 14
PANAMAX: WITNESSED A FAIRLY STABLE MARKET IN THE ATLANTIC
COALspot.com: Despite the fact that the Dry Bulk market noted another weekly increase, clouds of uncertainty returned mid-week onwards, as the mini ...
Wednesday, 12 November 14
SHIPPING MARKET INSIGHT - CHRISTOPHER T. WHITTY
COALspot.com: The fight continues between the low-cost iron ore producers and the big three: Vale, Rio Tinto and BHP Billiton. We are moving into a ...
Tuesday, 11 November 14
FACING CHALLENGES AND MEETING OPPORTUNITIES - INTERNATIONAL EPC CONFERENCE & EXHIBITION
Press Release: SKYCONNECTION and TRANSEVENT, which is fully supported by the Institution of Engineers Indonesia and Ministry of Industry of the Rep ...
Tuesday, 11 November 14
NEWCASTLE COAL SWAP CLOSED AT $ 52.65 FOR Q1' 15 DELIVERY
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery decreased US$ 2.83 (-5.10%) month over month and US$ 1.35 (-2.50%) week ove ...
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- ASAPP Information Group - India
- Carbofer General Trading SA - India
- Mjunction Services Limited - India
- Ambuja Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Global Business Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coal and Oil Company - UAE
- SN Aboitiz Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Minerals Council of Australia
- Grasim Industreis Ltd - India
- Power Finance Corporation Ltd., India
- GAC Shipping (India) Pvt Ltd
- Singapore Mercantile Exchange
- Central Electricity Authority - India
- Riau Bara Harum - Indonesia
- Wood Mackenzie - Singapore
- Independent Power Producers Association of India
- New Zealand Coal & Carbon
- Star Paper Mills Limited - India
- Ministry of Transport, Egypt
- Sree Jayajothi Cements Limited - India
- Gujarat Electricity Regulatory Commission - India
- Economic Council, Georgia
- Cement Manufacturers Association - India
- Videocon Industries ltd - India
- Directorate Of Revenue Intelligence - India
- GN Power Mariveles Coal Plant, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Port Waratah Coal Services - Australia
- TeaM Sual Corporation - Philippines
- CNBM International Corporation - China
- Xindia Steels Limited - India
- Malabar Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- SMC Global Power, Philippines
- Chamber of Mines of South Africa
- Bayan Resources Tbk. - Indonesia
- Bhushan Steel Limited - India
- MS Steel International - UAE
- Tamil Nadu electricity Board
- Gujarat Sidhee Cement - India
- Maheswari Brothers Coal Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Marubeni Corporation - India
- LBH Netherlands Bv - Netherlands
- Ministry of Finance - Indonesia
- Siam City Cement PLC, Thailand
- The State Trading Corporation of India Ltd
- Intertek Mineral Services - Indonesia
- Thai Mozambique Logistica
- Meenaskhi Energy Private Limited - India
- European Bulk Services B.V. - Netherlands
- Medco Energi Mining Internasional
- San Jose City I Power Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Larsen & Toubro Limited - India
- CIMB Investment Bank - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Ministry of Mines - Canada
- Energy Development Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petron Corporation, Philippines
- Bharathi Cement Corporation - India
- Pendopo Energi Batubara - Indonesia
- Agrawal Coal Company - India
- Essar Steel Hazira Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Sakthi Sugars Limited - India
- Bangladesh Power Developement Board
- Aboitiz Power Corporation - Philippines
- Jaiprakash Power Ventures ltd
- PowerSource Philippines DevCo
- Wilmar Investment Holdings
- Siam City Cement - Thailand
- Lanco Infratech Ltd - India
- PTC India Limited - India
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- VISA Power Limited - India
- Parry Sugars Refinery, India
- Indonesian Coal Mining Association
- Miang Besar Coal Terminal - Indonesia
- Madhucon Powers Ltd - India
- Bhoruka Overseas - Indonesia
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Sical Logistics Limited - India
- Coastal Gujarat Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Merrill Lynch Commodities Europe
- Vedanta Resources Plc - India
- Binh Thuan Hamico - Vietnam
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Australian Coal Association
- Manunggal Multi Energi - Indonesia
- Renaissance Capital - South Africa
- Indika Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Aditya Birla Group - India
- India Bulls Power Limited - India
- Tata Chemicals Ltd - India
- AsiaOL BioFuels Corp., Philippines
- The University of Queensland
- Anglo American - United Kingdom
- Kideco Jaya Agung - Indonesia
- Interocean Group of Companies - India
- Global Green Power PLC Corporation, Philippines
- Africa Commodities Group - South Africa
- Electricity Generating Authority of Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Savvy Resources Ltd - HongKong
- Kaltim Prima Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining Corp, Philippines
- IEA Clean Coal Centre - UK
- Rashtriya Ispat Nigam Limited - India
- Edison Trading Spa - Italy
- Mercuria Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Goldman Sachs - Singapore
- Metalloyd Limited - United Kingdom
- Sindya Power Generating Company Private Ltd
- Meralco Power Generation, Philippines
- Straits Asia Resources Limited - Singapore
- Krishnapatnam Port Company Ltd. - India
- White Energy Company Limited
- Standard Chartered Bank - UAE
- Vizag Seaport Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Australian Commodity Traders Exchange
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- IHS Mccloskey Coal Group - USA
- TNB Fuel Sdn Bhd - Malaysia
- Globalindo Alam Lestari - Indonesia
- Deloitte Consulting - India
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Ind-Barath Power Infra Limited - India
- Posco Energy - South Korea
- Sojitz Corporation - Japan
- Alfred C Toepfer International GmbH - Germany
- Uttam Galva Steels Limited - India
- GVK Power & Infra Limited - India
- Electricity Authority, New Zealand
- Eastern Coal Council - USA
- Commonwealth Bank - Australia
- ICICI Bank Limited - India
- Global Coal Blending Company Limited - Australia
- Thiess Contractors Indonesia
- Trasteel International SA, Italy
- Central Java Power - Indonesia
- Eastern Energy - Thailand
- Formosa Plastics Group - Taiwan
- Makarim & Taira - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Kartika Selabumi Mining - Indonesia
- Planning Commission, India
- Coalindo Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Oldendorff Carriers - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Karaikal Port Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- London Commodity Brokers - England
- Bukit Makmur.PT - Indonesia
- Latin American Coal - Colombia
- Orica Australia Pty. Ltd.
- Karbindo Abesyapradhi - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Romanian Commodities Exchange
- Chettinad Cement Corporation Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Dalmia Cement Bharat India
- Therma Luzon, Inc, Philippines
- Indogreen Group - Indonesia
- Orica Mining Services - Indonesia
- The Treasury - Australian Government
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercator Lines Limited - India
- Baramulti Group, Indonesia
- Indian Oil Corporation Limited
- Attock Cement Pakistan Limited
- Georgia Ports Authority, United States
- Antam Resourcindo - Indonesia
- Borneo Indobara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Indian Energy Exchange, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Parliament of New Zealand
- Rio Tinto Coal - Australia
- Banpu Public Company Limited - Thailand
- GMR Energy Limited - India
- PNOC Exploration Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- SMG Consultants - Indonesia
- Price Waterhouse Coopers - Russia
- McConnell Dowell - Australia
- Timah Investasi Mineral - Indoneisa
- Heidelberg Cement - Germany
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