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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, 19 June 14
PANAMAX: VERY CLOSE TO BREAKING THE ALL TIME LOW RECORD - FEARNLEYS AS
Handy
The Supra-Handy market is experiencing the same market slow down as its bigger sister markets however not to the same extent. We see TA rat ...
Wednesday, 18 June 14
CHINESE STEEL PRODUCTION SETS RECORD DURING FIRST TEN DAYS OF JUNE - COMMODORE RESEARCH & CONSULTANCY
Recently released data shows that average daily crude steel production at China's key steel mills hit a record high of 1.833 million tons durin ...
Wednesday, 18 June 14
MARKET INSIGHT - TIMOS PAPADIMITRIOU
Back in January the expectations for Q3 and Q4 were more than great. Talks and claims for a rising BDI and a healthy market were coming from everyw ...
Tuesday, 17 June 14
DRY BULK FREIGHT RATES TO RISE DURING THE SECOND HALF OF 2014, AS CHINA IS EXPECTED TO START IMPORTING MORE IRON ORE FROM BRAZIL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
In its latest analysis of the dry bulk market, BIMCO said that it doesn’t expect freight rates to react significantly to increased demand bef ...
Monday, 16 June 14
INDONESIAN COAL SWAPS FOR Q3 DELIVERY FALL 2.34 % MONTH ON MONTH
COALspot.com: Indonesian coal swaps for average Q3’ 2014 lost on day, week and on month according to AsiaClear OTC coal swap's reports re ...
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Showing 3651 to 3655 news of total 6871 |
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- CNBM International Corporation - China
- TeaM Sual Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- McConnell Dowell - Australia
- Parliament of New Zealand
- Riau Bara Harum - Indonesia
- Wood Mackenzie - Singapore
- Trasteel International SA, Italy
- Iligan Light & Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Intertek Mineral Services - Indonesia
- GVK Power & Infra Limited - India
- Salva Resources Pvt Ltd - India
- PowerSource Philippines DevCo
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- Tata Chemicals Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Bulk Trading Sa - Switzerland
- Edison Trading Spa - Italy
- Bhushan Steel Limited - India
- ICICI Bank Limited - India
- Jaiprakash Power Ventures ltd
- Meralco Power Generation, Philippines
- Global Coal Blending Company Limited - Australia
- Kalimantan Lumbung Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Romanian Commodities Exchange
- Altura Mining Limited, Indonesia
- Eastern Coal Council - USA
- Vedanta Resources Plc - India
- Makarim & Taira - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Mines - Canada
- Star Paper Mills Limited - India
- Meenaskhi Energy Private Limited - India
- Formosa Plastics Group - Taiwan
- Grasim Industreis Ltd - India
- Merrill Lynch Commodities Europe
- Borneo Indobara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Pipit Mutiara Jaya. PT, Indonesia
- Jindal Steel & Power Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Planning Commission, India
- Goldman Sachs - Singapore
- Oldendorff Carriers - Singapore
- Ambuja Cements Ltd - India
- Electricity Authority, New Zealand
- SMG Consultants - Indonesia
- Africa Commodities Group - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Pendopo Energi Batubara - Indonesia
- Ind-Barath Power Infra Limited - India
- Indika Energy - Indonesia
- Baramulti Group, Indonesia
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- IHS Mccloskey Coal Group - USA
- Energy Development Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- IEA Clean Coal Centre - UK
- MS Steel International - UAE
- Globalindo Alam Lestari - Indonesia
- Sakthi Sugars Limited - India
- Dalmia Cement Bharat India
- White Energy Company Limited
- GMR Energy Limited - India
- Larsen & Toubro Limited - India
- Central Electricity Authority - India
- VISA Power Limited - India
- Indian Oil Corporation Limited
- PetroVietnam Power Coal Import and Supply Company
- Miang Besar Coal Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Sindya Power Generating Company Private Ltd
- Singapore Mercantile Exchange
- Essar Steel Hazira Ltd - India
- Madhucon Powers Ltd - India
- Therma Luzon, Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Uttam Galva Steels Limited - India
- Siam City Cement PLC, Thailand
- AsiaOL BioFuels Corp., Philippines
- Kideco Jaya Agung - Indonesia
- Tamil Nadu electricity Board
- Siam City Cement - Thailand
- The University of Queensland
- Interocean Group of Companies - India
- Rio Tinto Coal - Australia
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- Barasentosa Lestari - Indonesia
- India Bulls Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Sree Jayajothi Cements Limited - India
- Gujarat Sidhee Cement - India
- CIMB Investment Bank - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Medco Energi Mining Internasional
- Deloitte Consulting - India
- Australian Coal Association
- Latin American Coal - Colombia
- Bhatia International Limited - India
- Georgia Ports Authority, United States
- International Coal Ventures Pvt Ltd - India
- Malabar Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Central Java Power - Indonesia
- Eastern Energy - Thailand
- Wilmar Investment Holdings
- Billiton Holdings Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Simpson Spence & Young - Indonesia
- Sarangani Energy Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Mercuria Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Binh Thuan Hamico - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Aditya Birla Group - India
- SN Aboitiz Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Thai Mozambique Logistica
- Videocon Industries ltd - India
- Karaikal Port Pvt Ltd - India
- Petron Corporation, Philippines
- Mintek Dendrill Indonesia
- Parry Sugars Refinery, India
- Commonwealth Bank - Australia
- The State Trading Corporation of India Ltd
- Attock Cement Pakistan Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- Antam Resourcindo - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Cement Manufacturers Association - India
- PTC India Limited - India
- Standard Chartered Bank - UAE
- Maharashtra Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- GAC Shipping (India) Pvt Ltd
- Savvy Resources Ltd - HongKong
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Port Waratah Coal Services - Australia
- Sojitz Corporation - Japan
- Australian Commodity Traders Exchange
- Carbofer General Trading SA - India
- Kobexindo Tractors - Indoneisa
- Kumho Petrochemical, South Korea
- Economic Council, Georgia
- Kartika Selabumi Mining - Indonesia
- Independent Power Producers Association of India
- Posco Energy - South Korea
- Gujarat Electricity Regulatory Commission - India
- Leighton Contractors Pty Ltd - Australia
- Indonesian Coal Mining Association
- Alfred C Toepfer International GmbH - Germany
- Maheswari Brothers Coal Limited - India
- Samtan Co., Ltd - South Korea
- Chettinad Cement Corporation Ltd - India
- Bangladesh Power Developement Board
- Indian Energy Exchange, India
- Sical Logistics Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Mercator Lines Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining and Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Minerals Council of Australia
- Thiess Contractors Indonesia
- London Commodity Brokers - England
- Orica Mining Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- OPG Power Generation Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Bharathi Cement Corporation - India
- Marubeni Corporation - India
- Straits Asia Resources Limited - Singapore
- Energy Link Ltd, New Zealand
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- Coalindo Energy - Indonesia
- New Zealand Coal & Carbon
- The Treasury - Australian Government
- Ministry of Transport, Egypt
- Global Business Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Renaissance Capital - South Africa
- Semirara Mining Corp, Philippines
- Indogreen Group - Indonesia
- Bhoruka Overseas - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- European Bulk Services B.V. - Netherlands
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- Vizag Seaport Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMC Global Power, Philippines
- Chamber of Mines of South Africa
- Rashtriya Ispat Nigam Limited - India
- Heidelberg Cement - Germany
- Kaltim Prima Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Coal and Oil Company - UAE
- Ministry of Finance - Indonesia
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