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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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- Merrill Lynch Commodities Europe
- Trasteel International SA, Italy
- Orica Australia Pty. Ltd.
- Sical Logistics Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Aditya Birla Group - India
- Lanco Infratech Ltd - India
- Aboitiz Power Corporation - Philippines
- GVK Power & Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Cement Manufacturers Association - India
- Deloitte Consulting - India
- Energy Link Ltd, New Zealand
- The University of Queensland
- Gujarat Sidhee Cement - India
- Parliament of New Zealand
- Banpu Public Company Limited - Thailand
- London Commodity Brokers - England
- PetroVietnam Power Coal Import and Supply Company
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Madhucon Powers Ltd - India
- Manunggal Multi Energi - Indonesia
- Eastern Energy - Thailand
- Vedanta Resources Plc - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mintek Dendrill Indonesia
- Krishnapatnam Port Company Ltd. - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Energy Development Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Global Green Power PLC Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Ministry of Mines - Canada
- Economic Council, Georgia
- Iligan Light & Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- VISA Power Limited - India
- Therma Luzon, Inc, Philippines
- Attock Cement Pakistan Limited
- Indika Energy - Indonesia
- Marubeni Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- TeaM Sual Corporation - Philippines
- Coal and Oil Company - UAE
- Meralco Power Generation, Philippines
- Agrawal Coal Company - India
- Petron Corporation, Philippines
- Mercator Lines Limited - India
- Electricity Generating Authority of Thailand
- Bangladesh Power Developement Board
- Heidelberg Cement - Germany
- Pendopo Energi Batubara - Indonesia
- Indogreen Group - Indonesia
- Indian Oil Corporation Limited
- Savvy Resources Ltd - HongKong
- GMR Energy Limited - India
- New Zealand Coal & Carbon
- Barasentosa Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Bharathi Cement Corporation - India
- Kobexindo Tractors - Indoneisa
- Simpson Spence & Young - Indonesia
- Singapore Mercantile Exchange
- Tata Chemicals Ltd - India
- Bhushan Steel Limited - India
- Romanian Commodities Exchange
- OPG Power Generation Pvt Ltd - India
- SMG Consultants - Indonesia
- Central Java Power - Indonesia
- Altura Mining Limited, Indonesia
- Rio Tinto Coal - Australia
- Timah Investasi Mineral - Indoneisa
- Planning Commission, India
- Price Waterhouse Coopers - Russia
- The Treasury - Australian Government
- Bahari Cakrawala Sebuku - Indonesia
- Coalindo Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Jindal Steel & Power Ltd - India
- Dalmia Cement Bharat India
- Alfred C Toepfer International GmbH - Germany
- Maheswari Brothers Coal Limited - India
- Indo Tambangraya Megah - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Ambuja Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Edison Trading Spa - Italy
- Goldman Sachs - Singapore
- Power Finance Corporation Ltd., India
- Thiess Contractors Indonesia
- SN Aboitiz Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- PowerSource Philippines DevCo
- Carbofer General Trading SA - India
- PTC India Limited - India
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- SMC Global Power, Philippines
- Indian Energy Exchange, India
- IEA Clean Coal Centre - UK
- Holcim Trading Pte Ltd - Singapore
- Renaissance Capital - South Africa
- Gujarat Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Bukit Baiduri Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- India Bulls Power Limited - India
- White Energy Company Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Baramulti Group, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Independent Power Producers Association of India
- Kumho Petrochemical, South Korea
- Tamil Nadu electricity Board
- Directorate Of Revenue Intelligence - India
- Global Business Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Standard Chartered Bank - UAE
- Georgia Ports Authority, United States
- Jorong Barutama Greston.PT - Indonesia
- Australian Commodity Traders Exchange
- Bhoruka Overseas - Indonesia
- Posco Energy - South Korea
- Orica Mining Services - Indonesia
- MS Steel International - UAE
- The State Trading Corporation of India Ltd
- Wilmar Investment Holdings
- Makarim & Taira - Indonesia
- Siam City Cement - Thailand
- Xindia Steels Limited - India
- Sindya Power Generating Company Private Ltd
- Chamber of Mines of South Africa
- Central Electricity Authority - India
- LBH Netherlands Bv - Netherlands
- Karaikal Port Pvt Ltd - India
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- Commonwealth Bank - Australia
- Eastern Coal Council - USA
- Ceylon Electricity Board - Sri Lanka
- Gujarat Mineral Development Corp Ltd - India
- Minerals Council of Australia
- Cigading International Bulk Terminal - Indonesia
- Videocon Industries ltd - India
- Sojitz Corporation - Japan
- Star Paper Mills Limited - India
- Rashtriya Ispat Nigam Limited - India
- Sinarmas Energy and Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Ministry of Transport, Egypt
- Ministry of Finance - Indonesia
- Salva Resources Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Authority, New Zealand
- South Luzon Thermal Energy Corporation
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- Vizag Seaport Private Limited - India
- Grasim Industreis Ltd - India
- Sree Jayajothi Cements Limited - India
- GAC Shipping (India) Pvt Ltd
- Wood Mackenzie - Singapore
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- Siam City Cement PLC, Thailand
- Jaiprakash Power Ventures ltd
- International Coal Ventures Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Antam Resourcindo - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- McConnell Dowell - Australia
- Chettinad Cement Corporation Ltd - India
- Oldendorff Carriers - Singapore
- Meenaskhi Energy Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- ASAPP Information Group - India
- Anglo American - United Kingdom
- Borneo Indobara - Indonesia
- Metalloyd Limited - United Kingdom
- Africa Commodities Group - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhatia International Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Malabar Cements Ltd - India
- Semirara Mining Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Samtan Co., Ltd - South Korea
- ICICI Bank Limited - India
- Sakthi Sugars Limited - India
- Uttam Galva Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Larsen & Toubro Limited - India
- CIMB Investment Bank - Malaysia
- Riau Bara Harum - Indonesia
- Indonesian Coal Mining Association
- Directorate General of MIneral and Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Parry Sugars Refinery, India
- Bulk Trading Sa - Switzerland
- Australian Coal Association
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