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