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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, 09 January 14
CAPESIZE: WEST AUSTRALIA FREIGHT IS NOW DOWN IN THE $8S AND STILL DROPPING - FEARNLEYS
Handy
In the Atlantic we see rates sliding slowly for the start of 2014. Several players cvrd over the holidays and the rate decline was som ...
Thursday, 09 January 14
THE SHIPPING MARKET IN 2013 AND LOOKING FORWARD GLOBAL ECONOMY: STEADY AS SHE GOES UPWARDS - BIMCO
Over the past year, developed economies have gained traction while developing and emerging economies have suffered from slower growth. Despite key e ...
Wednesday, 08 January 14
DRY BULK MARKET PROSPECTS LOOKING BRIGHTER DESPITE SLOW START TO THE NEW YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite the fact that the dry bulk market's benchmark, the BDI has been on a fall since the start of 2014, ending yesterday's session down to 1,87 ...
Wednesday, 08 January 14
AUSTRALIAN NEWCASTLE PORT'S WEEKLY COAL EXPORTS FALL
COALspot.com: In the week ended January 6, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 3.27 m ...
Wednesday, 08 January 14
THE DRY BULK MARKET HAS LOST SOME OF ITS STEAM THESE PAST COUPLE OF DAYS: INTERMODAL
Chartering (Wet: Softer- / Dry: Softer- )
The Dry Bulk market has lost some of its steam these past couple of days although hires, espe ...
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- Bharathi Cement Corporation - India
- Coal and Oil Company - UAE
- European Bulk Services B.V. - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- Aboitiz Power Corporation - Philippines
- Borneo Indobara - Indonesia
- Intertek Mineral Services - Indonesia
- Wilmar Investment Holdings
- Africa Commodities Group - South Africa
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
- Uttam Galva Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Central Electricity Authority - India
- Australian Coal Association
- Simpson Spence & Young - Indonesia
- Karaikal Port Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- OPG Power Generation Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Mjunction Services Limited - India
- Maheswari Brothers Coal Limited - India
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Lanco Infratech Ltd - India
- Singapore Mercantile Exchange
- Jaiprakash Power Ventures ltd
- Kepco SPC Power Corporation, Philippines
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- Vizag Seaport Private Limited - India
- Baramulti Group, Indonesia
- Kumho Petrochemical, South Korea
- Orica Australia Pty. Ltd.
- Indonesian Coal Mining Association
- Sinarmas Energy and Mining - Indonesia
- Marubeni Corporation - India
- Mercator Lines Limited - India
- Wood Mackenzie - Singapore
- The University of Queensland
- Standard Chartered Bank - UAE
- Global Green Power PLC Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Sical Logistics Limited - India
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- Australian Commodity Traders Exchange
- Siam City Cement PLC, Thailand
- Neyveli Lignite Corporation Ltd, - India
- Therma Luzon, Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Posco Energy - South Korea
- Renaissance Capital - South Africa
- Altura Mining Limited, Indonesia
- Thiess Contractors Indonesia
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- Tamil Nadu electricity Board
- White Energy Company Limited
- Port Waratah Coal Services - Australia
- Essar Steel Hazira Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Global Business Power Corporation, Philippines
- Siam City Cement - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CIMB Investment Bank - Malaysia
- SMC Global Power, Philippines
- Planning Commission, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Romanian Commodities Exchange
- Bukit Makmur.PT - Indonesia
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Energy Development Corp, Philippines
- Bhatia International Limited - India
- Billiton Holdings Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
- Chettinad Cement Corporation Ltd - India
- Thai Mozambique Logistica
- ASAPP Information Group - India
- Georgia Ports Authority, United States
- GVK Power & Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Grasim Industreis Ltd - India
- Bhushan Steel Limited - India
- Latin American Coal - Colombia
- TeaM Sual Corporation - Philippines
- Ministry of Finance - Indonesia
- PTC India Limited - India
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- IEA Clean Coal Centre - UK
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- Parry Sugars Refinery, India
- Makarim & Taira - Indonesia
- Meenaskhi Energy Private Limited - India
- Tata Chemicals Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- New Zealand Coal & Carbon
- Iligan Light & Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Goldman Sachs - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- PNOC Exploration Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Bangladesh Power Developement Board
- Kohat Cement Company Ltd. - Pakistan
- Leighton Contractors Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Xindia Steels Limited - India
- Coalindo Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- Rashtriya Ispat Nigam Limited - India
- Ministry of Mines - Canada
- Power Finance Corporation Ltd., India
- Gujarat Mineral Development Corp Ltd - India
- Vedanta Resources Plc - India
- Indian Energy Exchange, India
- Economic Council, Georgia
- Bulk Trading Sa - Switzerland
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Sidhee Cement - India
- Ceylon Electricity Board - Sri Lanka
- Attock Cement Pakistan Limited
- Globalindo Alam Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Agrawal Coal Company - India
- Vijayanagar Sugar Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- South Luzon Thermal Energy Corporation
- Trasteel International SA, Italy
- Videocon Industries ltd - India
- Petron Corporation, Philippines
- Independent Power Producers Association of India
- Ministry of Transport, Egypt
- Orica Mining Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Binh Thuan Hamico - Vietnam
- Larsen & Toubro Limited - India
- Mercuria Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Link Ltd, New Zealand
- Star Paper Mills Limited - India
- Bhoruka Overseas - Indonesia
- Sree Jayajothi Cements Limited - India
- London Commodity Brokers - England
- Parliament of New Zealand
- Sojitz Corporation - Japan
- GN Power Mariveles Coal Plant, Philippines
- Riau Bara Harum - Indonesia
- Bayan Resources Tbk. - Indonesia
- Banpu Public Company Limited - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Ind-Barath Power Infra Limited - India
- Malabar Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- MS Steel International - UAE
- Jindal Steel & Power Ltd - India
- Kideco Jaya Agung - Indonesia
- Directorate Of Revenue Intelligence - India
- Carbofer General Trading SA - India
- Salva Resources Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- SMG Consultants - Indonesia
- Eastern Energy - Thailand
- Madhucon Powers Ltd - India
- Global Coal Blending Company Limited - Australia
- Edison Trading Spa - Italy
- Price Waterhouse Coopers - Russia
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- Metalloyd Limited - United Kingdom
- Rio Tinto Coal - Australia
- CNBM International Corporation - China
- Aditya Birla Group - India
- Sarangani Energy Corporation, Philippines
- Cement Manufacturers Association - India
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- Cigading International Bulk Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- LBH Netherlands Bv - Netherlands
- Semirara Mining Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Indika Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Meralco Power Generation, Philippines
- Anglo American - United Kingdom
- Sindya Power Generating Company Private Ltd
- Straits Asia Resources Limited - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Commonwealth Bank - Australia
- Interocean Group of Companies - India
- Gujarat Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Chamber of Mines of South Africa
- ICICI Bank Limited - India
- India Bulls Power Limited - India
- The Treasury - Australian Government
- TNB Fuel Sdn Bhd - Malaysia
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