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