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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, 02 October 14
CAPESIZE - DULL AND WITHOUT MUCH DIRECTION AS IRON ORE AND COAL VOLUMES FAIL TO LIVE UP EXPECTATIONS
Handy
After the recent weeks´ rate increase in the Atlantic we see Panamaxes snapping up handymax and Supra cargoes at much lower levels, p ...
Wednesday, 01 October 14
ASIAN THERMAL COAL PRICES TO REMAIN WEAK ON OVERSUPPLY - FITCH
COALspot.com: The thermal coal market in Asia will remain oversupplied in the next 12 months, in spite of on-going rationalisation of production, a ...
Wednesday, 01 October 14
PANAMAXES: DEFENSIVE, STRUGGLING TO KEEP ANY FURTHER DECREASES - INTERMODAL
COALspot.com: The Dry Bulk market seemed unable to shake off the trend of the week prior and the BDI remained on a downward slope for the bigger pa ...
Wednesday, 01 October 14
FITCH: GLOBAL ECONOMY FACES MULTI-SPEED RECOVERY, MULTIPLE RISKS
Fitch Ratings says in its latest Global Economic Outlook (GEO) that global growth will pick up in 2015 and 2016, but risks are weighted to the down ...
Tuesday, 30 September 14
COALVIEW TO PARTICIPATE AT MET COKE WORLD SUMMIT 2014 IN CHICAGO
COALspot.com: Coalview Ltd., LLC(“Coalview”) America's leading fully integrated coal technology and fine coal recovery company prov ...
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- Planning Commission, India
- Karbindo Abesyapradhi - Indoneisa
- Madhucon Powers Ltd - India
- Jaiprakash Power Ventures ltd
- Straits Asia Resources Limited - Singapore
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- Meenaskhi Energy Private Limited - India
- Global Green Power PLC Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Manunggal Multi Energi - Indonesia
- ASAPP Information Group - India
- Kapuas Tunggal Persada - Indonesia
- Larsen & Toubro Limited - India
- Sree Jayajothi Cements Limited - India
- Iligan Light & Power Inc, Philippines
- GMR Energy Limited - India
- Trasteel International SA, Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mintek Dendrill Indonesia
- Deloitte Consulting - India
- Orica Australia Pty. Ltd.
- Therma Luzon, Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Coastal Gujarat Power Limited - India
- Posco Energy - South Korea
- Parliament of New Zealand
- Gujarat Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Standard Chartered Bank - UAE
- Samtan Co., Ltd - South Korea
- Essar Steel Hazira Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Medco Energi Mining Internasional
- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- Tata Chemicals Ltd - India
- Sakthi Sugars Limited - India
- Antam Resourcindo - Indonesia
- Makarim & Taira - Indonesia
- Coalindo Energy - Indonesia
- Xindia Steels Limited - India
- Indian Oil Corporation Limited
- Videocon Industries ltd - India
- Ambuja Cements Ltd - India
- Aditya Birla Group - India
- Rio Tinto Coal - Australia
- Latin American Coal - Colombia
- Interocean Group of Companies - India
- VISA Power Limited - India
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- Australian Coal Association
- Meralco Power Generation, Philippines
- Ministry of Finance - Indonesia
- CNBM International Corporation - China
- Renaissance Capital - South Africa
- Directorate General of MIneral and Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- Metalloyd Limited - United Kingdom
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- Altura Mining Limited, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IEA Clean Coal Centre - UK
- Salva Resources Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Central Electricity Authority - India
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- Attock Cement Pakistan Limited
- PowerSource Philippines DevCo
- Maharashtra Electricity Regulatory Commission - India
- Minerals Council of Australia
- Ministry of Transport, Egypt
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ICICI Bank Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Mjunction Services Limited - India
- Port Waratah Coal Services - Australia
- Dalmia Cement Bharat India
- Kepco SPC Power Corporation, Philippines
- Economic Council, Georgia
- Ind-Barath Power Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- GN Power Mariveles Coal Plant, Philippines
- Malabar Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Indonesian Coal Mining Association
- Bahari Cakrawala Sebuku - Indonesia
- Oldendorff Carriers - Singapore
- Commonwealth Bank - Australia
- Toyota Tsusho Corporation, Japan
- Petron Corporation, Philippines
- The Treasury - Australian Government
- Power Finance Corporation Ltd., India
- Georgia Ports Authority, United States
- Kartika Selabumi Mining - Indonesia
- Central Java Power - Indonesia
- Formosa Plastics Group - Taiwan
- Simpson Spence & Young - Indonesia
- PTC India Limited - India
- Australian Commodity Traders Exchange
- Indian Energy Exchange, India
- Petrochimia International Co. Ltd.- Taiwan
- Wood Mackenzie - Singapore
- Bharathi Cement Corporation - India
- Baramulti Group, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Krishnapatnam Port Company Ltd. - India
- Chettinad Cement Corporation Ltd - India
- Price Waterhouse Coopers - Russia
- LBH Netherlands Bv - Netherlands
- South Luzon Thermal Energy Corporation
- Carbofer General Trading SA - India
- Jindal Steel & Power Ltd - India
- New Zealand Coal & Carbon
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The State Trading Corporation of India Ltd
- White Energy Company Limited
- Bukit Baiduri Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Barasentosa Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Sojitz Corporation - Japan
- Miang Besar Coal Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kobexindo Tractors - Indoneisa
- Aboitiz Power Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Riau Bara Harum - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercator Lines Limited - India
- SMG Consultants - Indonesia
- Energy Development Corp, Philippines
- Energy Link Ltd, New Zealand
- Global Business Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Indogreen Group - Indonesia
- Bukit Makmur.PT - Indonesia
- Siam City Cement PLC, Thailand
- Bhushan Steel Limited - India
- Coal and Oil Company - UAE
- Sarangani Energy Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- London Commodity Brokers - England
- Sical Logistics Limited - India
- Indo Tambangraya Megah - Indonesia
- Parry Sugars Refinery, India
- Independent Power Producers Association of India
- McConnell Dowell - Australia
- Indika Energy - Indonesia
- Kumho Petrochemical, South Korea
- Africa Commodities Group - South Africa
- Semirara Mining and Power Corporation, Philippines
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Anglo American - United Kingdom
- International Coal Ventures Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Merrill Lynch Commodities Europe
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- IHS Mccloskey Coal Group - USA
- MS Steel International - UAE
- Bangladesh Power Developement Board
- Romanian Commodities Exchange
- Heidelberg Cement - Germany
- Pendopo Energi Batubara - Indonesia
- European Bulk Services B.V. - Netherlands
- Borneo Indobara - Indonesia
- Banpu Public Company Limited - Thailand
- Savvy Resources Ltd - HongKong
- Edison Trading Spa - Italy
- Gujarat Sidhee Cement - India
- Karaikal Port Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Uttam Galva Steels Limited - India
- TeaM Sual Corporation - Philippines
- Tamil Nadu electricity Board
- Chamber of Mines of South Africa
- Maheswari Brothers Coal Limited - India
- Semirara Mining Corp, Philippines
- Bulk Trading Sa - Switzerland
- Agrawal Coal Company - India
- Bhoruka Overseas - Indonesia
- PNOC Exploration Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Star Paper Mills Limited - India
- GVK Power & Infra Limited - India
- Orica Mining Services - Indonesia
- Bhatia International Limited - India
- Sinarmas Energy and Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- India Bulls Power Limited - India
- Eastern Coal Council - USA
- Marubeni Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Vedanta Resources Plc - India
- Siam City Cement - Thailand
- Directorate Of Revenue Intelligence - India
- SMC Global Power, Philippines
- Cigading International Bulk Terminal - Indonesia
- Grasim Industreis Ltd - India
- Goldman Sachs - Singapore
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