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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, 18 December 13
DEMOLITION ACTIVITY SCALED BACK AS FREIGHT RATES RISE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
It's always been the case that each time we witness a spike in freight rates, demolition activity is decreasing, as owners are looking for more car ...
Tuesday, 17 December 13
NEWCASTLE COAL EXPORTS UP 37.83% WEEK ON WEEK
COALspot.com: In the week ended December 16, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 3.45 ...
Monday, 16 December 13
SUB-BIT FOB INDONESIA COAL SWAP LOST $ 0.53 IN A WEEK
COALspot.com – Sub-Bit Indonesia coal swap (FOB) for average Q1’ 14 delivery gained $ 0.91 pmt month on month on Friday 13 December 2013 ...
Monday, 16 December 13
API 8 CFR SOUTH CHINA COAL Q3' 14 DELIVERY PRICE CLOSED $1.63 LESSER THAN Q1' 14 PRICE
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery gained 5.34 percept month on month as on Friday 13 December 2013. ...
Sunday, 15 December 13
SUPRAMAX'S FREIGHT RALLY COMES TO AN END THIS WEEK
COALspot.com: The BDI was up by 7 pct closing at 2,330 points week on week and the cape index was also up by 10.51 points and closed at 4,246 points ...
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- Sakthi Sugars Limited - India
- Essar Steel Hazira Ltd - India
- Sojitz Corporation - Japan
- Economic Council, Georgia
- Alfred C Toepfer International GmbH - Germany
- PNOC Exploration Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- San Jose City I Power Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Global Coal Blending Company Limited - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Baramulti Group, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- GVK Power & Infra Limited - India
- Mintek Dendrill Indonesia
- PTC India Limited - India
- Krishnapatnam Port Company Ltd. - India
- Petron Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- Goldman Sachs - Singapore
- Kapuas Tunggal Persada - Indonesia
- Malabar Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Altura Mining Limited, Indonesia
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- OPG Power Generation Pvt Ltd - India
- Commonwealth Bank - Australia
- Intertek Mineral Services - Indonesia
- Aboitiz Power Corporation - Philippines
- IEA Clean Coal Centre - UK
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Thai Mozambique Logistica
- IHS Mccloskey Coal Group - USA
- Carbofer General Trading SA - India
- Georgia Ports Authority, United States
- Kaltim Prima Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Global Business Power Corporation, Philippines
- Ministry of Mines - Canada
- Miang Besar Coal Terminal - Indonesia
- Chamber of Mines of South Africa
- Bhoruka Overseas - Indonesia
- Bulk Trading Sa - Switzerland
- Sinarmas Energy and Mining - Indonesia
- Thiess Contractors Indonesia
- Australian Coal Association
- TNB Fuel Sdn Bhd - Malaysia
- Indian Oil Corporation Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- PowerSource Philippines DevCo
- Posco Energy - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement - Thailand
- Metalloyd Limited - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Bangladesh Power Developement Board
- Sindya Power Generating Company Private Ltd
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- Borneo Indobara - Indonesia
- Formosa Plastics Group - Taiwan
- Attock Cement Pakistan Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Planning Commission, India
- Karbindo Abesyapradhi - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Semirara Mining Corp, Philippines
- Iligan Light & Power Inc, Philippines
- The Treasury - Australian Government
- International Coal Ventures Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- India Bulls Power Limited - India
- Sical Logistics Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- Tamil Nadu electricity Board
- Holcim Trading Pte Ltd - Singapore
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- Maharashtra Electricity Regulatory Commission - India
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Edison Trading Spa - Italy
- Makarim & Taira - Indonesia
- Orica Mining Services - Indonesia
- SMG Consultants - Indonesia
- Gujarat Electricity Regulatory Commission - India
- CNBM International Corporation - China
- Parry Sugars Refinery, India
- Energy Link Ltd, New Zealand
- Madhucon Powers Ltd - India
- Rio Tinto Coal - Australia
- Bayan Resources Tbk. - Indonesia
- Interocean Group of Companies - India
- Meralco Power Generation, Philippines
- Parliament of New Zealand
- Mercuria Energy - Indonesia
- Larsen & Toubro Limited - India
- Central Electricity Authority - India
- Mjunction Services Limited - India
- Eastern Energy - Thailand
- Toyota Tsusho Corporation, Japan
- Indian Energy Exchange, India
- Standard Chartered Bank - UAE
- Ministry of Transport, Egypt
- Merrill Lynch Commodities Europe
- Romanian Commodities Exchange
- Kideco Jaya Agung - Indonesia
- Aditya Birla Group - India
- AsiaOL BioFuels Corp., Philippines
- Agrawal Coal Company - India
- Electricity Authority, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Port Waratah Coal Services - Australia
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Indogreen Group - Indonesia
- Salva Resources Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Videocon Industries ltd - India
- Anglo American - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Kohat Cement Company Ltd. - Pakistan
- Ind-Barath Power Infra Limited - India
- Electricity Generating Authority of Thailand
- New Zealand Coal & Carbon
- Binh Thuan Hamico - Vietnam
- Marubeni Corporation - India
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- Lanco Infratech Ltd - India
- The University of Queensland
- Africa Commodities Group - South Africa
- Deloitte Consulting - India
- Coal and Oil Company - UAE
- Kalimantan Lumbung Energi - Indonesia
- Jaiprakash Power Ventures ltd
- LBH Netherlands Bv - Netherlands
- Coastal Gujarat Power Limited - India
- Wilmar Investment Holdings
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Tata Chemicals Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vedanta Resources Plc - India
- Cigading International Bulk Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Riau Bara Harum - Indonesia
- Vizag Seaport Private Limited - India
- Wood Mackenzie - Singapore
- Xindia Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Eastern Coal Council - USA
- SMC Global Power, Philippines
- Barasentosa Lestari - Indonesia
- ICICI Bank Limited - India
- Star Paper Mills Limited - India
- Banpu Public Company Limited - Thailand
- Samtan Co., Ltd - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Timah Investasi Mineral - Indoneisa
- Bhatia International Limited - India
- Billiton Holdings Pty Ltd - Australia
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- GMR Energy Limited - India
- Indo Tambangraya Megah - Indonesia
- The State Trading Corporation of India Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Grasim Industreis Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Bukit Asam (Persero) Tbk - Indonesia
- Independent Power Producers Association of India
- Indonesian Coal Mining Association
- Leighton Contractors Pty Ltd - Australia
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- Heidelberg Cement - Germany
- SN Aboitiz Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Savvy Resources Ltd - HongKong
- Dalmia Cement Bharat India
- VISA Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Minerals Council of Australia
- Kobexindo Tractors - Indoneisa
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- Bharathi Cement Corporation - India
- Karaikal Port Pvt Ltd - India
- White Energy Company Limited
- Ambuja Cements Ltd - India
- Antam Resourcindo - Indonesia
- Indika Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Singapore Mercantile Exchange
- Price Waterhouse Coopers - Russia
- Sree Jayajothi Cements Limited - India
- Uttam Galva Steels Limited - India
- TeaM Sual Corporation - Philippines
- Orica Australia Pty. Ltd.
- Medco Energi Mining Internasional
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