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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, 27 February 14
SHIPPING LOANS WORTH $5 BILLION HAVE CHANGED HANDS OVER THE PAST YEAR, AS FUNDS INVEST IN SHIPPING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Funds investing in shipping has been the "talk of the town" over the past couple of years, as institutional investors, private equity and ...
Thursday, 27 February 14
NEWCASTLE COAL EXPORTS SLIP 26.68 PERCENT WEEK ON WEEK
COALspot.com: In the week ended 24 February 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, total 2. ...
Wednesday, 26 February 14
SMALLER SIZE SEGMENTS HOLDING ON TO THEIR LEVELS; CAPES CORRECTING UPWARDS - INTERMODAL
Chartering (Wet: Stable- / Dry: Stable+)
The Dry Bulk market continued to improve this past week, on the back of rates for the smaller size s ...
Tuesday, 25 February 14
GBCE, A COAL UPGRADING TECHNOLOGY DEVELOPER, APPOINTS RICHARD BULMAN AS PROJECT DIRECTOR
Press Release: GB Clean Energy Ltd. (GBCE) announced today the appointment of Richard Bulman as Project Director. In this capacity Mr. Bulman ...
Tuesday, 25 February 14
ULTRAMAXES ARE THE 'WEAPON OF CHOICE' FOR DRY BULK SHIP OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
It's been a busy start in 2014, as the first month of the year was a rather active in terms of second hand vessel purchases and newbuilding orderin ...
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- LBH Netherlands Bv - Netherlands
- Sree Jayajothi Cements Limited - India
- Planning Commission, India
- Essar Steel Hazira Ltd - India
- Makarim & Taira - Indonesia
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Star Paper Mills Limited - India
- Formosa Plastics Group - Taiwan
- SMG Consultants - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Bhushan Steel Limited - India
- Tamil Nadu electricity Board
- Wilmar Investment Holdings
- Latin American Coal - Colombia
- Dalmia Cement Bharat India
- Savvy Resources Ltd - HongKong
- Global Green Power PLC Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Goldman Sachs - Singapore
- OPG Power Generation Pvt Ltd - India
- Mintek Dendrill Indonesia
- Energy Link Ltd, New Zealand
- Grasim Industreis Ltd - India
- Timah Investasi Mineral - Indoneisa
- Vizag Seaport Private Limited - India
- VISA Power Limited - India
- Aboitiz Power Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Directorate Of Revenue Intelligence - India
- Vijayanagar Sugar Pvt Ltd - India
- White Energy Company Limited
- Coastal Gujarat Power Limited - India
- Orica Mining Services - Indonesia
- Ministry of Mines - Canada
- Petrochimia International Co. Ltd.- Taiwan
- Medco Energi Mining Internasional
- Madhucon Powers Ltd - India
- Videocon Industries ltd - India
- Indian Oil Corporation Limited
- Oldendorff Carriers - Singapore
- Alfred C Toepfer International GmbH - Germany
- Sakthi Sugars Limited - India
- Leighton Contractors Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Edison Trading Spa - Italy
- Kaltim Prima Coal - Indonesia
- Vedanta Resources Plc - India
- Posco Energy - South Korea
- IEA Clean Coal Centre - UK
- Energy Development Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Trasteel International SA, Italy
- Central Java Power - Indonesia
- Petron Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- The University of Queensland
- Maheswari Brothers Coal Limited - India
- Australian Coal Association
- Baramulti Group, Indonesia
- Malabar Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Parry Sugars Refinery, India
- Miang Besar Coal Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Kalimantan Lumbung Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Thai Mozambique Logistica
- India Bulls Power Limited - India
- Sojitz Corporation - Japan
- Asmin Koalindo Tuhup - Indonesia
- GVK Power & Infra Limited - India
- Meenaskhi Energy Private Limited - India
- PNOC Exploration Corporation - Philippines
- Port Waratah Coal Services - Australia
- Salva Resources Pvt Ltd - India
- Singapore Mercantile Exchange
- Power Finance Corporation Ltd., India
- Marubeni Corporation - India
- Electricity Generating Authority of Thailand
- Carbofer General Trading SA - India
- Intertek Mineral Services - Indonesia
- IHS Mccloskey Coal Group - USA
- Romanian Commodities Exchange
- CNBM International Corporation - China
- Parliament of New Zealand
- Ambuja Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Australian Commodity Traders Exchange
- Borneo Indobara - Indonesia
- Meralco Power Generation, Philippines
- Ministry of Finance - Indonesia
- Aditya Birla Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Iligan Light & Power Inc, Philippines
- The State Trading Corporation of India Ltd
- GAC Shipping (India) Pvt Ltd
- TeaM Sual Corporation - Philippines
- ASAPP Information Group - India
- Commonwealth Bank - Australia
- Georgia Ports Authority, United States
- Deloitte Consulting - India
- SMC Global Power, Philippines
- Chettinad Cement Corporation Ltd - India
- Renaissance Capital - South Africa
- Therma Luzon, Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Economic Council, Georgia
- McConnell Dowell - Australia
- Binh Thuan Hamico - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kumho Petrochemical, South Korea
- PTC India Limited - India
- CIMB Investment Bank - Malaysia
- Minerals Council of Australia
- Africa Commodities Group - South Africa
- Simpson Spence & Young - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Sarangani Energy Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Standard Chartered Bank - UAE
- Larsen & Toubro Limited - India
- Jorong Barutama Greston.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Bukit Makmur.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Mercator Lines Limited - India
- Kepco SPC Power Corporation, Philippines
- Xindia Steels Limited - India
- Agrawal Coal Company - India
- Heidelberg Cement - Germany
- Riau Bara Harum - Indonesia
- Siam City Cement PLC, Thailand
- Coalindo Energy - Indonesia
- Merrill Lynch Commodities Europe
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tata Chemicals Ltd - India
- Rio Tinto Coal - Australia
- Kartika Selabumi Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Mercuria Energy - Indonesia
- Indonesian Coal Mining Association
- Global Business Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Bangladesh Power Developement Board
- Price Waterhouse Coopers - Russia
- Bukit Asam (Persero) Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Bharathi Cement Corporation - India
- Karaikal Port Pvt Ltd - India
- PowerSource Philippines DevCo
- Neyveli Lignite Corporation Ltd, - India
- Toyota Tsusho Corporation, Japan
- San Jose City I Power Corp, Philippines
- Jindal Steel & Power Ltd - India
- Central Electricity Authority - India
- Cement Manufacturers Association - India
- Siam City Cement - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- The Treasury - Australian Government
- Independent Power Producers Association of India
- Krishnapatnam Port Company Ltd. - India
- Bhoruka Overseas - Indonesia
- Indian Energy Exchange, India
- Billiton Holdings Pty Ltd - Australia
- Anglo American - United Kingdom
- Electricity Authority, New Zealand
- Banpu Public Company Limited - Thailand
- Altura Mining Limited, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Gujarat Sidhee Cement - India
- Indika Energy - Indonesia
- London Commodity Brokers - England
- Directorate General of MIneral and Coal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- ICICI Bank Limited - India
- Thiess Contractors Indonesia
- Indo Tambangraya Megah - Indonesia
- Manunggal Multi Energi - Indonesia
- Attock Cement Pakistan Limited
- Ind-Barath Power Infra Limited - India
- Chamber of Mines of South Africa
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
- Wood Mackenzie - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Coal Council - USA
- Mjunction Services Limited - India
- New Zealand Coal & Carbon
- Interocean Group of Companies - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kideco Jaya Agung - Indonesia
- Global Coal Blending Company Limited - Australia
- Coal and Oil Company - UAE
- MS Steel International - UAE
- Indogreen Group - Indonesia
- SN Aboitiz Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Transport, Egypt
- Sical Logistics Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Eastern Energy - Thailand
- International Coal Ventures Pvt Ltd - India
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