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