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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, 06 February 14
THE WORLD LARGEST COAL EXPORTER SHIPPED AROUND 35.90 MMT OF COAL IN DECEMBER 2013
COALspot.com: Indonesia, the world 4th largest coal producer and the Global largest multi grade coal exporter shipped around $2* billion worth ...
Thursday, 06 February 14
PANAMAX: FAR EAST IS ALMOST ABSENT AND ATLANTIC ON SLOW STEAM
Handy
Due to ongoing Chinese New Year the market is still quiet. Slowly we can see some fresh coal cargos entering the market with second half Feb/ ...
Wednesday, 05 February 14
DRY BULK MARKET HAS LOST FURTHER GROUND THIS PAST WEEK - INTERMODAL
COALspot.com: The Dry Bulk market has lost further ground this past week as activity ex-Far East disappeared into the Chinese holidays and owners id ...
Wednesday, 05 February 14
MARKET INSIGHT - TASOS PAPADOPOULOS
KNOWLEDGE TO ELEVATE
COALspot.com: Let's take a break from market prospects, numbers, order book etc. and shed some light on the conclusions of ...
Tuesday, 04 February 14
NEWCASTLE PORT'S WEEKLY COAL EXPORTS HIT NEW HIGH OF 3.53 MMT
COALspot.com: In the week ended 3 February 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled ...
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- Bhushan Steel Limited - India
- Price Waterhouse Coopers - Russia
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- Asmin Koalindo Tuhup - Indonesia
- Coal and Oil Company - UAE
- Uttam Galva Steels Limited - India
- Tamil Nadu electricity Board
- Economic Council, Georgia
- Central Electricity Authority - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Finance - Indonesia
- Parliament of New Zealand
- Larsen & Toubro Limited - India
- Sindya Power Generating Company Private Ltd
- Manunggal Multi Energi - Indonesia
- Madhucon Powers Ltd - India
- Electricity Authority, New Zealand
- Pendopo Energi Batubara - Indonesia
- Eastern Coal Council - USA
- Minerals Council of Australia
- Savvy Resources Ltd - HongKong
- McConnell Dowell - Australia
- Medco Energi Mining Internasional
- Globalindo Alam Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Kapuas Tunggal Persada - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- New Zealand Coal & Carbon
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- Formosa Plastics Group - Taiwan
- Bharathi Cement Corporation - India
- Directorate Of Revenue Intelligence - India
- Grasim Industreis Ltd - India
- Wood Mackenzie - Singapore
- Chamber of Mines of South Africa
- Antam Resourcindo - Indonesia
- Australian Commodity Traders Exchange
- Metalloyd Limited - United Kingdom
- Marubeni Corporation - India
- Commonwealth Bank - Australia
- VISA Power Limited - India
- Sarangani Energy Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Global Coal Blending Company Limited - Australia
- Indian Oil Corporation Limited
- OPG Power Generation Pvt Ltd - India
- Latin American Coal - Colombia
- Videocon Industries ltd - India
- The Treasury - Australian Government
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- Posco Energy - South Korea
- Simpson Spence & Young - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bayan Resources Tbk. - Indonesia
- Binh Thuan Hamico - Vietnam
- Singapore Mercantile Exchange
- Africa Commodities Group - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Baiduri Energy - Indonesia
- Banpu Public Company Limited - Thailand
- ICICI Bank Limited - India
- Borneo Indobara - Indonesia
- Siam City Cement - Thailand
- SMG Consultants - Indonesia
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- Vizag Seaport Private Limited - India
- Energy Link Ltd, New Zealand
- Eastern Energy - Thailand
- Rashtriya Ispat Nigam Limited - India
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Sakthi Sugars Limited - India
- Romanian Commodities Exchange
- Electricity Generating Authority of Thailand
- Anglo American - United Kingdom
- Independent Power Producers Association of India
- Bhatia International Limited - India
- Billiton Holdings Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Attock Cement Pakistan Limited
- Makarim & Taira - Indonesia
- Interocean Group of Companies - India
- Dalmia Cement Bharat India
- Rio Tinto Coal - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Meralco Power Generation, Philippines
- Gujarat Sidhee Cement - India
- Carbofer General Trading SA - India
- Standard Chartered Bank - UAE
- Orica Australia Pty. Ltd.
- Riau Bara Harum - Indonesia
- Kideco Jaya Agung - Indonesia
- Toyota Tsusho Corporation, Japan
- Indonesian Coal Mining Association
- Neyveli Lignite Corporation Ltd, - India
- Lanco Infratech Ltd - India
- Siam City Cement PLC, Thailand
- GAC Shipping (India) Pvt Ltd
- Oldendorff Carriers - Singapore
- Edison Trading Spa - Italy
- Xindia Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Global Business Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- Ind-Barath Power Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Orica Mining Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Semirara Mining Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- The University of Queensland
- Kepco SPC Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indo Tambangraya Megah - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- LBH Netherlands Bv - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Intertek Mineral Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Deloitte Consulting - India
- London Commodity Brokers - England
- PNOC Exploration Corporation - Philippines
- Sical Logistics Limited - India
- Karaikal Port Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Vedanta Resources Plc - India
- Kumho Petrochemical, South Korea
- IHS Mccloskey Coal Group - USA
- Wilmar Investment Holdings
- ASAPP Information Group - India
- PTC India Limited - India
- The State Trading Corporation of India Ltd
- Petron Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Renaissance Capital - South Africa
- Aboitiz Power Corporation - Philippines
- Indika Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Merrill Lynch Commodities Europe
- AsiaOL BioFuels Corp., Philippines
- Mintek Dendrill Indonesia
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- Timah Investasi Mineral - Indoneisa
- Agrawal Coal Company - India
- Malabar Cements Ltd - India
- Cement Manufacturers Association - India
- Thiess Contractors Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Georgia Ports Authority, United States
- Port Waratah Coal Services - Australia
- South Luzon Thermal Energy Corporation
- Australian Coal Association
- Salva Resources Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Indogreen Group - Indonesia
- Kartika Selabumi Mining - Indonesia
- Mercator Lines Limited - India
- Star Paper Mills Limited - India
- Maheswari Brothers Coal Limited - India
- India Bulls Power Limited - India
- Energy Development Corp, Philippines
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
- Coalindo Energy - Indonesia
- CNBM International Corporation - China
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Barasentosa Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Ambuja Cements Ltd - India
- Planning Commission, India
- Bukit Asam (Persero) Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bulk Trading Sa - Switzerland
- TeaM Sual Corporation - Philippines
- Altura Mining Limited, Indonesia
- Therma Luzon, Inc, Philippines
- Indian Energy Exchange, India
- Leighton Contractors Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- Essar Steel Hazira Ltd - India
- Ministry of Transport, Egypt
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- Aditya Birla Group - India
- Maharashtra Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- MS Steel International - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Thai Mozambique Logistica
- Kaltim Prima Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- GVK Power & Infra Limited - India
- Ministry of Mines - Canada
- White Energy Company Limited
- Bangladesh Power Developement Board
- International Coal Ventures Pvt Ltd - India
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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