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