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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, 27 November 13
SHIP OWNERS ONCE AGAIN TURN TO DRY BULK CARRIERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Ship owners once again turned to more dry bulk carrier ordering over the course of the past week, as more and more appear convinced of the industry ...
Tuesday, 26 November 13
EWP INVITES COAL BIDS FOR 2014 - 2018 DELIVERIES
COALspot.com: Korea East-West Power Co. Ltd (EWP) invited bids to supply 130,000MT of min 5,600kcal/kg (Sub)-bituminous Coal on NCV basis for March ...
Tuesday, 26 November 13
NEWCASTLE COAL EXPORTS SLIP 22.62% W-W
COALspot.com: In the week ended November 25, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 2.26 ...
Monday, 25 November 13
THE SUB-BIT INDONESIA COAL SWAP MOVEMENT IN YEAR 2014 IS STILL FAR FROM PROMISING
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q1’ 14 delivery gained $ 2.54 pmt month on month on Friday 22 Novemb ...
Sunday, 24 November 13
CFR SOUTH CHINA COAL SWAPS FOR Q4' 14 DELIVERY PRICE SHOWS A NEGATIVE TREND WEEK ON WEEK AND FLAT ON D-D
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery gained 0.13 percept d-d on Friday 22 November 2013. The CFR South ...
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- Manunggal Multi Energi - Indonesia
- Petron Corporation, Philippines
- Xindia Steels Limited - India
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- Kepco SPC Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Asmin Koalindo Tuhup - Indonesia
- Mercuria Energy - Indonesia
- Electricity Generating Authority of Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Bhushan Steel Limited - India
- Savvy Resources Ltd - HongKong
- Tata Chemicals Ltd - India
- Orica Mining Services - Indonesia
- The University of Queensland
- Grasim Industreis Ltd - India
- Star Paper Mills Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- San Jose City I Power Corp, Philippines
- McConnell Dowell - Australia
- Jindal Steel & Power Ltd - India
- Malabar Cements Ltd - India
- The State Trading Corporation of India Ltd
- Ministry of Transport, Egypt
- SMG Consultants - Indonesia
- Vizag Seaport Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Siam City Cement PLC, Thailand
- SMC Global Power, Philippines
- Samtan Co., Ltd - South Korea
- Directorate General of MIneral and Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Attock Cement Pakistan Limited
- Binh Thuan Hamico - Vietnam
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- Directorate Of Revenue Intelligence - India
- Sree Jayajothi Cements Limited - India
- Rio Tinto Coal - Australia
- Economic Council, Georgia
- Edison Trading Spa - Italy
- London Commodity Brokers - England
- Indian Oil Corporation Limited
- Lanco Infratech Ltd - India
- Mercator Lines Limited - India
- CNBM International Corporation - China
- South Luzon Thermal Energy Corporation
- Wilmar Investment Holdings
- Singapore Mercantile Exchange
- Coalindo Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Vedanta Resources Plc - India
- Australian Coal Association
- Gujarat Sidhee Cement - India
- Kapuas Tunggal Persada - Indonesia
- Wood Mackenzie - Singapore
- Uttam Galva Steels Limited - India
- Carbofer General Trading SA - India
- Sakthi Sugars Limited - India
- Chamber of Mines of South Africa
- Intertek Mineral Services - Indonesia
- Bhatia International Limited - India
- Anglo American - United Kingdom
- Maheswari Brothers Coal Limited - India
- Gujarat Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- CIMB Investment Bank - Malaysia
- Timah Investasi Mineral - Indoneisa
- Iligan Light & Power Inc, Philippines
- Borneo Indobara - Indonesia
- Kobexindo Tractors - Indoneisa
- Romanian Commodities Exchange
- Mintek Dendrill Indonesia
- Sarangani Energy Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Ministry of Finance - Indonesia
- Simpson Spence & Young - Indonesia
- Krishnapatnam Port Company Ltd. - India
- ICICI Bank Limited - India
- Sojitz Corporation - Japan
- ASAPP Information Group - India
- GVK Power & Infra Limited - India
- Antam Resourcindo - Indonesia
- Makarim & Taira - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sindya Power Generating Company Private Ltd
- Straits Asia Resources Limited - Singapore
- Kideco Jaya Agung - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Merrill Lynch Commodities Europe
- Planning Commission, India
- European Bulk Services B.V. - Netherlands
- Oldendorff Carriers - Singapore
- Videocon Industries ltd - India
- Agrawal Coal Company - India
- Latin American Coal - Colombia
- Rashtriya Ispat Nigam Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Aditya Birla Group - India
- VISA Power Limited - India
- Therma Luzon, Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Independent Power Producers Association of India
- Thai Mozambique Logistica
- Meralco Power Generation, Philippines
- Global Green Power PLC Corporation, Philippines
- Tamil Nadu electricity Board
- Bukit Baiduri Energy - Indonesia
- Eastern Coal Council - USA
- Global Business Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Indika Energy - Indonesia
- Altura Mining Limited, Indonesia
- White Energy Company Limited
- Kartika Selabumi Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Heidelberg Cement - Germany
- Essar Steel Hazira Ltd - India
- Cement Manufacturers Association - India
- Marubeni Corporation - India
- Baramulti Group, Indonesia
- Parry Sugars Refinery, India
- New Zealand Coal & Carbon
- Parliament of New Zealand
- Barasentosa Lestari - Indonesia
- Energy Link Ltd, New Zealand
- OPG Power Generation Pvt Ltd - India
- Electricity Authority, New Zealand
- Banpu Public Company Limited - Thailand
- Interocean Group of Companies - India
- Standard Chartered Bank - UAE
- The Treasury - Australian Government
- Trasteel International SA, Italy
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- Coal and Oil Company - UAE
- Indogreen Group - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- International Coal Ventures Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Semirara Mining and Power Corporation, Philippines
- Bangladesh Power Developement Board
- Posco Energy - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- PTC India Limited - India
- Medco Energi Mining Internasional
- Power Finance Corporation Ltd., India
- Thiess Contractors Indonesia
- PowerSource Philippines DevCo
- Semirara Mining Corp, Philippines
- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- Salva Resources Pvt Ltd - India
- Eastern Energy - Thailand
- IHS Mccloskey Coal Group - USA
- Siam City Cement - Thailand
- Globalindo Alam Lestari - Indonesia
- Minerals Council of Australia
- Georgia Ports Authority, United States
- Africa Commodities Group - South Africa
- Port Waratah Coal Services - Australia
- Aboitiz Power Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Coastal Gujarat Power Limited - India
- Central Electricity Authority - India
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- MS Steel International - UAE
- Indian Energy Exchange, India
- Ministry of Mines - Canada
- Dalmia Cement Bharat India
- Mjunction Services Limited - India
- Riau Bara Harum - Indonesia
- Jaiprakash Power Ventures ltd
- Bahari Cakrawala Sebuku - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Central Java Power - Indonesia
- Formosa Plastics Group - Taiwan
- Ceylon Electricity Board - Sri Lanka
- Karbindo Abesyapradhi - Indoneisa
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Commonwealth Bank - Australia
- Deloitte Consulting - India
- Chettinad Cement Corporation Ltd - India
- Ind-Barath Power Infra Limited - India
- IEA Clean Coal Centre - UK
- Kohat Cement Company Ltd. - Pakistan
- Bharathi Cement Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- Metalloyd Limited - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- TeaM Sual Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- Madhucon Powers Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Goldman Sachs - Singapore
- Ambuja Cements Ltd - India
- Bulk Trading Sa - Switzerland
- GMR Energy Limited - India
- Kumho Petrochemical, South Korea
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