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