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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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Friday, 21 March 14
MERCURIA ANNOUNCES ACQUISITION OF J.P. MORGAN PHYSICAL COMMODITIES BUSINESS
COALspot.com: Mercuria Energy Group announced that it has reached a definitive agreement with J.P. Morgan Chase & Co. to acquire its physica ...
Thursday, 20 March 14
CAPESIZE: WEST AUSTRALIA TO CHINA RATES HAVE CLIMBED BACK TOWARD USD 11 PMT - FEARNRESEARCH
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From a slight improvement in the Atlantic to a more mixed picture this mid week. North Atlantic rounds showing softening signs whereas S ...
Wednesday, 19 March 14
INSTEAD OF DECIDING WHETHER THE GLASS IS HALF FULL OR HALF EMPTY, I AM CURRENTLY GLAD THERE IS WATER IN THE GLASS - EVA TZIMA
By Eva Tzima
Research Analyst
Intermodal Research & Valuations
Right when you think that you have all your facts straight, right wh ...
Wednesday, 19 March 14
EUROCOKE SUMMIT 2014
Press Release: ThyssenKrupp, Steel Institute VDEh, SSI and more headline Smithers Apex’s Eurocoke Summit
The leading coke, coal and s ...
Wednesday, 19 March 14
DRY BULK MARKET REBOUND LEADS TO MORE NEWBUILDING ORDERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The steady rise of the dry bulk market, as evidenced by the return, yesterday, of the Baltic Dry Index above the 1,500-point mark (1,518), is fu ...
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- Gujarat Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Grasim Industreis Ltd - India
- PowerSource Philippines DevCo
- Coastal Gujarat Power Limited - India
- Maheswari Brothers Coal Limited - India
- Heidelberg Cement - Germany
- Maharashtra Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Agrawal Coal Company - India
- Timah Investasi Mineral - Indoneisa
- Binh Thuan Hamico - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- New Zealand Coal & Carbon
- Bangladesh Power Developement Board
- Straits Asia Resources Limited - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Global Green Power PLC Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Orica Australia Pty. Ltd.
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- Pendopo Energi Batubara - Indonesia
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- Chamber of Mines of South Africa
- Vijayanagar Sugar Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Medco Energi Mining Internasional
- TeaM Sual Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Orica Mining Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Salva Resources Pvt Ltd - India
- ASAPP Information Group - India
- Power Finance Corporation Ltd., India
- Semirara Mining and Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- MS Steel International - UAE
- Carbofer General Trading SA - India
- Ministry of Mines - Canada
- Renaissance Capital - South Africa
- Miang Besar Coal Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Madhucon Powers Ltd - India
- Indian Energy Exchange, India
- Mercator Lines Limited - India
- GMR Energy Limited - India
- Independent Power Producers Association of India
- London Commodity Brokers - England
- White Energy Company Limited
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- Economic Council, Georgia
- Riau Bara Harum - Indonesia
- Central Electricity Authority - India
- Aditya Birla Group - India
- Indian Oil Corporation Limited
- Altura Mining Limited, Indonesia
- Port Waratah Coal Services - Australia
- Trasteel International SA, Italy
- Bukit Makmur.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Lanco Infratech Ltd - India
- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
- Bahari Cakrawala Sebuku - Indonesia
- Manunggal Multi Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Makarim & Taira - Indonesia
- SMG Consultants - Indonesia
- Xindia Steels Limited - India
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- Commonwealth Bank - Australia
- Vizag Seaport Private Limited - India
- Intertek Mineral Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Ambuja Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Bhatia International Limited - India
- Jorong Barutama Greston.PT - Indonesia
- SMC Global Power, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Leighton Contractors Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Uttam Galva Steels Limited - India
- Petron Corporation, Philippines
- McConnell Dowell - Australia
- Samtan Co., Ltd - South Korea
- Sakthi Sugars Limited - India
- PNOC Exploration Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Alfred C Toepfer International GmbH - Germany
- Posco Energy - South Korea
- International Coal Ventures Pvt Ltd - India
- Romanian Commodities Exchange
- Latin American Coal - Colombia
- Neyveli Lignite Corporation Ltd, - India
- Kepco SPC Power Corporation, Philippines
- The Treasury - Australian Government
- Larsen & Toubro Limited - India
- Ministry of Finance - Indonesia
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- Malabar Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- European Bulk Services B.V. - Netherlands
- The University of Queensland
- Pipit Mutiara Jaya. PT, Indonesia
- Georgia Ports Authority, United States
- Essar Steel Hazira Ltd - India
- CNBM International Corporation - China
- Kapuas Tunggal Persada - Indonesia
- Directorate Of Revenue Intelligence - India
- Eastern Energy - Thailand
- Rio Tinto Coal - Australia
- Bhoruka Overseas - Indonesia
- Kobexindo Tractors - Indoneisa
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- Kaltim Prima Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- LBH Netherlands Bv - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Antam Resourcindo - Indonesia
- Kumho Petrochemical, South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- India Bulls Power Limited - India
- Bhushan Steel Limited - India
- Simpson Spence & Young - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- Parry Sugars Refinery, India
- Marubeni Corporation - India
- Singapore Mercantile Exchange
- Sree Jayajothi Cements Limited - India
- Sarangani Energy Corporation, Philippines
- Star Paper Mills Limited - India
- Deloitte Consulting - India
- Mercuria Energy - Indonesia
- Ministry of Transport, Egypt
- Central Java Power - Indonesia
- Australian Coal Association
- ICICI Bank Limited - India
- Tata Chemicals Ltd - India
- Globalindo Alam Lestari - Indonesia
- PTC India Limited - India
- Mintek Dendrill Indonesia
- IHS Mccloskey Coal Group - USA
- Anglo American - United Kingdom
- Electricity Authority, New Zealand
- Parliament of New Zealand
- Sojitz Corporation - Japan
- TNB Fuel Sdn Bhd - Malaysia
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- VISA Power Limited - India
- Bharathi Cement Corporation - India
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- Sindya Power Generating Company Private Ltd
- Savvy Resources Ltd - HongKong
- Edison Trading Spa - Italy
- Vedanta Resources Plc - India
- Wood Mackenzie - Singapore
- Billiton Holdings Pty Ltd - Australia
- Interocean Group of Companies - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Videocon Industries ltd - India
- Indo Tambangraya Megah - Indonesia
- Thiess Contractors Indonesia
- Holcim Trading Pte Ltd - Singapore
- Gujarat Sidhee Cement - India
- Attock Cement Pakistan Limited
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
- Global Business Power Corporation, Philippines
- Thai Mozambique Logistica
- South Luzon Thermal Energy Corporation
- Coalindo Energy - Indonesia
- Oldendorff Carriers - Singapore
- Tamil Nadu electricity Board
- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cement Manufacturers Association - India
- Minerals Council of Australia
- Toyota Tsusho Corporation, Japan
- Kohat Cement Company Ltd. - Pakistan
- Bulk Trading Sa - Switzerland
- IEA Clean Coal Centre - UK
- Kartika Selabumi Mining - Indonesia
- Siam City Cement PLC, Thailand
- Goldman Sachs - Singapore
- Africa Commodities Group - South Africa
- Jaiprakash Power Ventures ltd
- Indogreen Group - Indonesia
- Indika Energy - Indonesia
- Mjunction Services Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GVK Power & Infra Limited - India
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
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