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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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- Parliament of New Zealand
- Antam Resourcindo - Indonesia
- ICICI Bank Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- International Coal Ventures Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- London Commodity Brokers - England
- South Luzon Thermal Energy Corporation
- CNBM International Corporation - China
- Eastern Energy - Thailand
- Price Waterhouse Coopers - Russia
- Coal and Oil Company - UAE
- Formosa Plastics Group - Taiwan
- Trasteel International SA, Italy
- SMC Global Power, Philippines
- Agrawal Coal Company - India
- TeaM Sual Corporation - Philippines
- Indian Oil Corporation Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- Kartika Selabumi Mining - Indonesia
- Indika Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Ambuja Cements Ltd - India
- Marubeni Corporation - India
- Indo Tambangraya Megah - Indonesia
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- Standard Chartered Bank - UAE
- Maheswari Brothers Coal Limited - India
- Essar Steel Hazira Ltd - India
- Ind-Barath Power Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Grasim Industreis Ltd - India
- Semirara Mining Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Edison Trading Spa - Italy
- Cigading International Bulk Terminal - Indonesia
- The University of Queensland
- Semirara Mining and Power Corporation, Philippines
- Planning Commission, India
- Attock Cement Pakistan Limited
- Ministry of Mines - Canada
- Medco Energi Mining Internasional
- Cement Manufacturers Association - India
- Ceylon Electricity Board - Sri Lanka
- Indonesian Coal Mining Association
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- Sree Jayajothi Cements Limited - India
- Indian Energy Exchange, India
- Uttam Galva Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- Georgia Ports Authority, United States
- White Energy Company Limited
- India Bulls Power Limited - India
- Ministry of Finance - Indonesia
- Indogreen Group - Indonesia
- Electricity Authority, New Zealand
- Singapore Mercantile Exchange
- Posco Energy - South Korea
- Energy Link Ltd, New Zealand
- Petron Corporation, Philippines
- Sical Logistics Limited - India
- Rashtriya Ispat Nigam Limited - India
- Riau Bara Harum - Indonesia
- Central Electricity Authority - India
- IEA Clean Coal Centre - UK
- Sinarmas Energy and Mining - Indonesia
- Orica Mining Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- Gujarat Sidhee Cement - India
- LBH Netherlands Bv - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Interocean Group of Companies - India
- Aboitiz Power Corporation - Philippines
- Star Paper Mills Limited - India
- Kobexindo Tractors - Indoneisa
- San Jose City I Power Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Samtan Co., Ltd - South Korea
- Bhoruka Overseas - Indonesia
- New Zealand Coal & Carbon
- CIMB Investment Bank - Malaysia
- Kideco Jaya Agung - Indonesia
- Bhatia International Limited - India
- Rio Tinto Coal - Australia
- Sojitz Corporation - Japan
- Directorate Of Revenue Intelligence - India
- McConnell Dowell - Australia
- Kepco SPC Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Renaissance Capital - South Africa
- Global Green Power PLC Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Mercator Lines Limited - India
- Siam City Cement PLC, Thailand
- Economic Council, Georgia
- The State Trading Corporation of India Ltd
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Barasentosa Lestari - Indonesia
- Borneo Indobara - Indonesia
- Videocon Industries ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Eastern Coal Council - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Baramulti Group, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Deloitte Consulting - India
- Ministry of Transport, Egypt
- Dalmia Cement Bharat India
- Madhucon Powers Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Alfred C Toepfer International GmbH - Germany
- Parry Sugars Refinery, India
- Thiess Contractors Indonesia
- Electricity Generating Authority of Thailand
- Altura Mining Limited, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Vedanta Resources Plc - India
- Energy Development Corp, Philippines
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Africa Commodities Group - South Africa
- Iligan Light & Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Xindia Steels Limited - India
- GVK Power & Infra Limited - India
- Lanco Infratech Ltd - India
- Wood Mackenzie - Singapore
- Siam City Cement - Thailand
- Timah Investasi Mineral - Indoneisa
- Independent Power Producers Association of India
- Oldendorff Carriers - Singapore
- Australian Commodity Traders Exchange
- PTC India Limited - India
- Commonwealth Bank - Australia
- Globalindo Alam Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- SMG Consultants - Indonesia
- Mintek Dendrill Indonesia
- MS Steel International - UAE
- Wilmar Investment Holdings
- Bangladesh Power Developement Board
- Port Waratah Coal Services - Australia
- Simpson Spence & Young - Indonesia
- Straits Asia Resources Limited - Singapore
- Australian Coal Association
- Jindal Steel & Power Ltd - India
- Mjunction Services Limited - India
- Meralco Power Generation, Philippines
- Carbofer General Trading SA - India
- SN Aboitiz Power Inc, Philippines
- Central Java Power - Indonesia
- Pendopo Energi Batubara - Indonesia
- Merrill Lynch Commodities Europe
- Romanian Commodities Exchange
- Tamil Nadu electricity Board
- Malabar Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Minerals Council of Australia
- Kaltim Prima Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Makarim & Taira - Indonesia
- Thai Mozambique Logistica
- Bukit Makmur.PT - Indonesia
- Mercuria Energy - Indonesia
- Global Business Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Tata Chemicals Ltd - India
- PowerSource Philippines DevCo
- Metalloyd Limited - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Sarangani Energy Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Bhushan Steel Limited - India
- Kumho Petrochemical, South Korea
- Savvy Resources Ltd - HongKong
- Sindya Power Generating Company Private Ltd
- AsiaOL BioFuels Corp., Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Heidelberg Cement - Germany
- VISA Power Limited - India
- Anglo American - United Kingdom
- Power Finance Corporation Ltd., India
- Vizag Seaport Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- ASAPP Information Group - India
- Salva Resources Pvt Ltd - India
- Latin American Coal - Colombia
- Karaikal Port Pvt Ltd - India
- The Treasury - Australian Government
- PNOC Exploration Corporation - Philippines
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