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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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Tuesday, 19 November 13
SHIP OWNER POUR MORE MONEY INTO DRY BULK CARRIER ACQUISITIONS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The recent dry bulk market's rally, coupled with an expected fall in oversupply and robust cargo demand has boosted ship owners' optimism on the l ...
Monday, 18 November 13
SUB-BIT INDONESIA COAL SWAP LOST ON WEEK; MARGINALLY GAINED ON DAY
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q1’ 14 delivery gained $ 1.25 pmt month on month on Friday 15 Novemb ...
Sunday, 17 November 13
Q4' 14 API 8 CFR SOUTH CHINA COAL SWAP CLOSED $ 3.43 PMT (4.34 %) HIGHER THAN Q1' 14 SWAP
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery gained 0.05 percept d-d on Friday 15 November 2013. The CFR South ...
Saturday, 16 November 13
INDONESIA TO INDIA SUPRAMAX FREIGHT RATES FIRM DUE TO STRONG COAL ACTIVITIES
COALspot.com: The Cape and Panamax index was down this week and pulling down the BDI by about 5 pct. BDI was closed at 1507 points on Friday 1 ...
Friday, 15 November 13
DRY BULK MARKET STILL LINGERING ON, DESPITE PREDICTIONS OF NEW IMMINENT RALLY PRIOR TO THE YEAR'S END - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market hasn't yet managed to stage a new comeback after its retreat from the recent multiyear highs. Yesterday, the industry's benchm ...
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- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- Maheswari Brothers Coal Limited - India
- Mercator Lines Limited - India
- Sree Jayajothi Cements Limited - India
- Electricity Generating Authority of Thailand
- Australian Commodity Traders Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Aditya Birla Group - India
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Alfred C Toepfer International GmbH - Germany
- Toyota Tsusho Corporation, Japan
- Kapuas Tunggal Persada - Indonesia
- Indonesian Coal Mining Association
- Karbindo Abesyapradhi - Indoneisa
- Price Waterhouse Coopers - Russia
- Deloitte Consulting - India
- Binh Thuan Hamico - Vietnam
- Simpson Spence & Young - Indonesia
- Bukit Makmur.PT - Indonesia
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- The University of Queensland
- Posco Energy - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Australian Coal Association
- Romanian Commodities Exchange
- ICICI Bank Limited - India
- Globalindo Alam Lestari - Indonesia
- Energy Development Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Goldman Sachs - Singapore
- Videocon Industries ltd - India
- Orica Mining Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Directorate Of Revenue Intelligence - India
- Interocean Group of Companies - India
- Kaltim Prima Coal - Indonesia
- London Commodity Brokers - England
- Merrill Lynch Commodities Europe
- Chettinad Cement Corporation Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Thiess Contractors Indonesia
- Sical Logistics Limited - India
- Savvy Resources Ltd - HongKong
- Barasentosa Lestari - Indonesia
- Sakthi Sugars Limited - India
- Cigading International Bulk Terminal - Indonesia
- Indika Energy - Indonesia
- Commonwealth Bank - Australia
- Agrawal Coal Company - India
- McConnell Dowell - Australia
- Tata Chemicals Ltd - India
- Independent Power Producers Association of India
- Attock Cement Pakistan Limited
- Jaiprakash Power Ventures ltd
- Xindia Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- VISA Power Limited - India
- Chamber of Mines of South Africa
- Mjunction Services Limited - India
- Latin American Coal - Colombia
- Bukit Baiduri Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Sarangani Energy Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- ASAPP Information Group - India
- Electricity Authority, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Sojitz Corporation - Japan
- Billiton Holdings Pty Ltd - Australia
- Minerals Council of Australia
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
- SN Aboitiz Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Banpu Public Company Limited - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Baramulti Group, Indonesia
- TeaM Sual Corporation - Philippines
- Oldendorff Carriers - Singapore
- Renaissance Capital - South Africa
- Lanco Infratech Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Dalmia Cement Bharat India
- Coalindo Energy - Indonesia
- Mercuria Energy - Indonesia
- Malabar Cements Ltd - India
- Orica Australia Pty. Ltd.
- Africa Commodities Group - South Africa
- Mintek Dendrill Indonesia
- White Energy Company Limited
- Thai Mozambique Logistica
- Bhoruka Overseas - Indonesia
- PowerSource Philippines DevCo
- Planning Commission, India
- Power Finance Corporation Ltd., India
- Ceylon Electricity Board - Sri Lanka
- The State Trading Corporation of India Ltd
- Bhatia International Limited - India
- Siam City Cement PLC, Thailand
- Ministry of Mines - Canada
- Energy Link Ltd, New Zealand
- PTC India Limited - India
- Parliament of New Zealand
- Straits Asia Resources Limited - Singapore
- OPG Power Generation Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Trasteel International SA, Italy
- Vedanta Resources Plc - India
- IHS Mccloskey Coal Group - USA
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
- Manunggal Multi Energi - Indonesia
- Meralco Power Generation, Philippines
- Larsen & Toubro Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Petrochimia International Co. Ltd.- Taiwan
- Rio Tinto Coal - Australia
- CIMB Investment Bank - Malaysia
- Kideco Jaya Agung - Indonesia
- Kepco SPC Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Karaikal Port Pvt Ltd - India
- Central Java Power - Indonesia
- Formosa Plastics Group - Taiwan
- Economic Council, Georgia
- Leighton Contractors Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- South Luzon Thermal Energy Corporation
- Kalimantan Lumbung Energi - Indonesia
- Carbofer General Trading SA - India
- Singapore Mercantile Exchange
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Ind-Barath Power Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Makarim & Taira - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cement Manufacturers Association - India
- Wilmar Investment Holdings
- Kobexindo Tractors - Indoneisa
- Grasim Industreis Ltd - India
- Eastern Coal Council - USA
- India Bulls Power Limited - India
- Jindal Steel & Power Ltd - India
- SMG Consultants - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- MS Steel International - UAE
- CNBM International Corporation - China
- Miang Besar Coal Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kumho Petrochemical, South Korea
- Marubeni Corporation - India
- Star Paper Mills Limited - India
- Standard Chartered Bank - UAE
- AsiaOL BioFuels Corp., Philippines
- Essar Steel Hazira Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Energy - Thailand
- Iligan Light & Power Inc, Philippines
- GVK Power & Infra Limited - India
- New Zealand Coal & Carbon
- Antam Resourcindo - Indonesia
- Coastal Gujarat Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Indogreen Group - Indonesia
- Coal and Oil Company - UAE
- SMC Global Power, Philippines
- Metalloyd Limited - United Kingdom
- Medco Energi Mining Internasional
- Uttam Galva Steels Limited - India
- Intertek Mineral Services - Indonesia
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Indian Oil Corporation Limited
- Indian Energy Exchange, India
- Vizag Seaport Private Limited - India
- The Treasury - Australian Government
- Ambuja Cements Ltd - India
- Altura Mining Limited, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Petron Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Georgia Ports Authority, United States
- Sindya Power Generating Company Private Ltd
- Central Electricity Authority - India
- Edison Trading Spa - Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining Corp, Philippines
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- Bhushan Steel Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Borneo Indobara - Indonesia
- Wood Mackenzie - Singapore
- Riau Bara Harum - Indonesia
- GMR Energy Limited - India
- Bayan Resources Tbk. - Indonesia
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