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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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Wednesday, 25 December 13
SHIPPING : AS FAR AS THIS CYCLE IS CONCERNED, 'WE HAVE SEEN THE WORST....!' - JOHN N. COTZIAS
In a week’s time the year comes to an end. Having been a speaker in two seminars over the past 5 days I was able to see the year ending trends ...
Tuesday, 24 December 13
AUSTRALIAN NEWCASTLE PORT'S WEEKLY COAL EXPORTS UP 11.46% W-W
COALspot.com: In the week ended December 23, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 3.84 ...
Tuesday, 24 December 13
SGX HAS LAUNCHED FREIGHT FUTURES
COALspot.com: Singapore Exchange (SGX) has announced the launch of freight future yesterday.
According to SGX’s press release, SGX has laun ...
Monday, 23 December 13
API 8 CFR SOUTH CHINA COAL SWAP FOR AVERAGE Q1' 14 CLOSED AT $ 82.80
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery gained 2.97 percept month on month as on Friday 20 December 2013. ...
Sunday, 22 December 13
Q1' 14 DELIVERY COAL SWAPS CLOSING HIGH COMPARED TO Q4' 14 DELIVERY CLOSING
COALspot.com – Sub-Bit Indonesia coal swap (FOB) for average Q1’ 14 delivery gained $ 1.31 pmt month on month on Friday 20 December 2013 ...
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- GN Power Mariveles Coal Plant, Philippines
- SMC Global Power, Philippines
- Bulk Trading Sa - Switzerland
- LBH Netherlands Bv - Netherlands
- Straits Asia Resources Limited - Singapore
- Bangladesh Power Developement Board
- Kideco Jaya Agung - Indonesia
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- Interocean Group of Companies - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Agrawal Coal Company - India
- Karbindo Abesyapradhi - Indoneisa
- Madhucon Powers Ltd - India
- Renaissance Capital - South Africa
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Tamil Nadu electricity Board
- Global Business Power Corporation, Philippines
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- Dalmia Cement Bharat India
- Salva Resources Pvt Ltd - India
- Goldman Sachs - Singapore
- Billiton Holdings Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- CIMB Investment Bank - Malaysia
- ICICI Bank Limited - India
- VISA Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Ind-Barath Power Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- MS Steel International - UAE
- Heidelberg Cement - Germany
- New Zealand Coal & Carbon
- Semirara Mining and Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Larsen & Toubro Limited - India
- TeaM Sual Corporation - Philippines
- Eastern Coal Council - USA
- Wilmar Investment Holdings
- SN Aboitiz Power Inc, Philippines
- Central Java Power - Indonesia
- Mjunction Services Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Savvy Resources Ltd - HongKong
- Jorong Barutama Greston.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Port Waratah Coal Services - Australia
- South Luzon Thermal Energy Corporation
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- Mercator Lines Limited - India
- Bukit Makmur.PT - Indonesia
- Antam Resourcindo - Indonesia
- Meralco Power Generation, Philippines
- Makarim & Taira - Indonesia
- Sical Logistics Limited - India
- Ministry of Mines - Canada
- Parliament of New Zealand
- AsiaOL BioFuels Corp., Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Sindya Power Generating Company Private Ltd
- Carbofer General Trading SA - India
- Karaikal Port Pvt Ltd - India
- White Energy Company Limited
- Bayan Resources Tbk. - Indonesia
- Deloitte Consulting - India
- Commonwealth Bank - Australia
- Planning Commission, India
- Bukit Baiduri Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bhatia International Limited - India
- The State Trading Corporation of India Ltd
- Indogreen Group - Indonesia
- IHS Mccloskey Coal Group - USA
- London Commodity Brokers - England
- TNB Fuel Sdn Bhd - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Bharathi Cement Corporation - India
- GAC Shipping (India) Pvt Ltd
- Kobexindo Tractors - Indoneisa
- Eastern Energy - Thailand
- Metalloyd Limited - United Kingdom
- Semirara Mining Corp, Philippines
- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Electricity Authority - India
- Sree Jayajothi Cements Limited - India
- Indian Oil Corporation Limited
- Wood Mackenzie - Singapore
- Cement Manufacturers Association - India
- Georgia Ports Authority, United States
- Africa Commodities Group - South Africa
- Malabar Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Anglo American - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- GVK Power & Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Attock Cement Pakistan Limited
- Electricity Authority, New Zealand
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- Pendopo Energi Batubara - Indonesia
- Price Waterhouse Coopers - Russia
- Grasim Industreis Ltd - India
- Petron Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Manunggal Multi Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Medco Energi Mining Internasional
- PNOC Exploration Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Mercuria Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Star Paper Mills Limited - India
- Cigading International Bulk Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- The Treasury - Australian Government
- Jaiprakash Power Ventures ltd
- Bhoruka Overseas - Indonesia
- Binh Thuan Hamico - Vietnam
- OPG Power Generation Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- ASAPP Information Group - India
- Indika Energy - Indonesia
- Baramulti Group, Indonesia
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Maheswari Brothers Coal Limited - India
- IEA Clean Coal Centre - UK
- Indian Energy Exchange, India
- PTC India Limited - India
- Vizag Seaport Private Limited - India
- Formosa Plastics Group - Taiwan
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Riau Bara Harum - Indonesia
- Trasteel International SA, Italy
- Banpu Public Company Limited - Thailand
- PowerSource Philippines DevCo
- SMG Consultants - Indonesia
- Barasentosa Lestari - Indonesia
- Aditya Birla Group - India
- Siam City Cement PLC, Thailand
- Alfred C Toepfer International GmbH - Germany
- Independent Power Producers Association of India
- Oldendorff Carriers - Singapore
- India Bulls Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Videocon Industries ltd - India
- The University of Queensland
- Kaltim Prima Coal - Indonesia
- Parry Sugars Refinery, India
- Leighton Contractors Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Meenaskhi Energy Private Limited - India
- Therma Luzon, Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Ministry of Finance - Indonesia
- Energy Link Ltd, New Zealand
- Bhushan Steel Limited - India
- Vedanta Resources Plc - India
- Siam City Cement - Thailand
- Kepco SPC Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Singapore Mercantile Exchange
- International Coal Ventures Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- Economic Council, Georgia
- Kalimantan Lumbung Energi - Indonesia
- CNBM International Corporation - China
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Toyota Tsusho Corporation, Japan
- Coal and Oil Company - UAE
- Electricity Generating Authority of Thailand
- Posco Energy - South Korea
- Australian Commodity Traders Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- Ministry of Transport, Egypt
- Standard Chartered Bank - UAE
- Rio Tinto Coal - Australia
- Minerals Council of Australia
- Altura Mining Limited, Indonesia
- Simpson Spence & Young - Indonesia
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- Romanian Commodities Exchange
- Aboitiz Power Corporation - Philippines
- GMR Energy Limited - India
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Merrill Lynch Commodities Europe
- Kumho Petrochemical, South Korea
- Marubeni Corporation - India
- Power Finance Corporation Ltd., India
- Directorate Of Revenue Intelligence - India
- Uttam Galva Steels Limited - India
- Mintek Dendrill Indonesia
- Australian Coal Association
- Holcim Trading Pte Ltd - Singapore
- Sakthi Sugars Limited - India
- Orica Mining Services - Indonesia
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