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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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Thursday, 26 September 13
INTERCARGO PUBLISHES BENCHMARKING BULK CARRIERS 2012-13 REPORT
The International Association of Dry Cargo Shipowners (Intercargo) has today launched Benchmarking Bulk Carriers 2012-13, the latest edition of our ...
Thursday, 26 September 13
DRY BULK MARKET KEEPS ON RALLYING ON THE BACK OF HIGH CAPESIZE DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept its momentum over the course of the past week, on the back of increased demand for Capesizes and an improvement of mark ...
Wednesday, 25 September 13
RBCT'S COAL EXPORT DECLINES IN AUGUST
COALspot.com - Richards Bay Coal Terminal (RBCT) is the single largest coal export terminal in South African as well as in the world has shipped 16. ...
Wednesday, 25 September 13
CAPES TOUCHING RATES NO ONE BELIEVED COULD BE ACHIEVED IN 2013 - INTERMODAL
Chartering (Wet: Stable- / Dry: Firm+ )
The Dry Bulk market is the gift that keeps on giving these days. With rates for Capes touching numbers ...
Wednesday, 25 September 13
IS IT TIME AGAIN TO SUPERSIZE AGAIN? - GEORGE LAZARIDIS
After an early arrival of the seasonal rally in the Capesize market, things look to be on the upbeat for these dry bulk giants. With the Index reach ...
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- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- ICICI Bank Limited - India
- Cement Manufacturers Association - India
- Dalmia Cement Bharat India
- Sojitz Corporation - Japan
- South Luzon Thermal Energy Corporation
- Orica Mining Services - Indonesia
- India Bulls Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Goldman Sachs - Singapore
- Wilmar Investment Holdings
- Thiess Contractors Indonesia
- Formosa Plastics Group - Taiwan
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- Petrochimia International Co. Ltd.- Taiwan
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Anglo American - United Kingdom
- Bhushan Steel Limited - India
- LBH Netherlands Bv - Netherlands
- Sakthi Sugars Limited - India
- Latin American Coal - Colombia
- ASAPP Information Group - India
- Trasteel International SA, Italy
- Directorate Of Revenue Intelligence - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- International Coal Ventures Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Malabar Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Xindia Steels Limited - India
- SMC Global Power, Philippines
- Kepco SPC Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Semirara Mining Corp, Philippines
- Mjunction Services Limited - India
- Tata Chemicals Ltd - India
- Coastal Gujarat Power Limited - India
- Planning Commission, India
- Karbindo Abesyapradhi - Indoneisa
- Metalloyd Limited - United Kingdom
- CIMB Investment Bank - Malaysia
- Thai Mozambique Logistica
- Ministry of Mines - Canada
- PetroVietnam Power Coal Import and Supply Company
- Larsen & Toubro Limited - India
- Carbofer General Trading SA - India
- Bhatia International Limited - India
- The University of Queensland
- Gujarat Mineral Development Corp Ltd - India
- New Zealand Coal & Carbon
- Holcim Trading Pte Ltd - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Mercuria Energy - Indonesia
- Electricity Authority, New Zealand
- Antam Resourcindo - Indonesia
- Petron Corporation, Philippines
- Marubeni Corporation - India
- Singapore Mercantile Exchange
- Coal and Oil Company - UAE
- Globalindo Alam Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Price Waterhouse Coopers - Russia
- SMG Consultants - Indonesia
- IEA Clean Coal Centre - UK
- Chettinad Cement Corporation Ltd - India
- GVK Power & Infra Limited - India
- Baramulti Group, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Standard Chartered Bank - UAE
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- Energy Link Ltd, New Zealand
- Aditya Birla Group - India
- Aboitiz Power Corporation - Philippines
- Eastern Coal Council - USA
- Posco Energy - South Korea
- Orica Australia Pty. Ltd.
- Kohat Cement Company Ltd. - Pakistan
- Commonwealth Bank - Australia
- Kaltim Prima Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Ministry of Finance - Indonesia
- Romanian Commodities Exchange
- Miang Besar Coal Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indogreen Group - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Sical Logistics Limited - India
- Riau Bara Harum - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Medco Energi Mining Internasional
- Vijayanagar Sugar Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- McConnell Dowell - Australia
- GMR Energy Limited - India
- Bayan Resources Tbk. - Indonesia
- Madhucon Powers Ltd - India
- Bukit Baiduri Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement PLC, Thailand
- Simpson Spence & Young - Indonesia
- The State Trading Corporation of India Ltd
- Siam City Cement - Thailand
- Mercator Lines Limited - India
- Ministry of Transport, Egypt
- Star Paper Mills Limited - India
- Energy Development Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Videocon Industries ltd - India
- Central Java Power - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- The Treasury - Australian Government
- Port Waratah Coal Services - Australia
- Minerals Council of Australia
- Jaiprakash Power Ventures ltd
- Indo Tambangraya Megah - Indonesia
- CNBM International Corporation - China
- Pipit Mutiara Jaya. PT, Indonesia
- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- Indika Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Indonesian Coal Mining Association
- Karaikal Port Pvt Ltd - India
- Chamber of Mines of South Africa
- White Energy Company Limited
- Pendopo Energi Batubara - Indonesia
- Central Electricity Authority - India
- Manunggal Multi Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Heidelberg Cement - Germany
- Electricity Generating Authority of Thailand
- Semirara Mining and Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Bahari Cakrawala Sebuku - Indonesia
- Straits Asia Resources Limited - Singapore
- Bangladesh Power Developement Board
- Oldendorff Carriers - Singapore
- VISA Power Limited - India
- San Jose City I Power Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Meenaskhi Energy Private Limited - India
- London Commodity Brokers - England
- Vedanta Resources Plc - India
- Ambuja Cements Ltd - India
- Vizag Seaport Private Limited - India
- Lanco Infratech Ltd - India
- Samtan Co., Ltd - South Korea
- Parliament of New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Independent Power Producers Association of India
- Indian Energy Exchange, India
- Attock Cement Pakistan Limited
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- IHS Mccloskey Coal Group - USA
- Iligan Light & Power Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Mintek Dendrill Indonesia
- Renaissance Capital - South Africa
- Kumho Petrochemical, South Korea
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- Leighton Contractors Pty Ltd - Australia
- Africa Commodities Group - South Africa
- SN Aboitiz Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Rio Tinto Coal - Australia
- Merrill Lynch Commodities Europe
- Therma Luzon, Inc, Philippines
- Bharathi Cement Corporation - India
- Altura Mining Limited, Indonesia
- Interocean Group of Companies - India
- Kobexindo Tractors - Indoneisa
- Tamil Nadu electricity Board
- Binh Thuan Hamico - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Sarangani Energy Corporation, Philippines
- PTC India Limited - India
- Intertek Mineral Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Asmin Koalindo Tuhup - Indonesia
- Global Green Power PLC Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Global Business Power Corporation, Philippines
- Grasim Industreis Ltd - India
- PowerSource Philippines DevCo
- Timah Investasi Mineral - Indoneisa
- Wood Mackenzie - Singapore
- GAC Shipping (India) Pvt Ltd
- Barasentosa Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Economic Council, Georgia
- Kapuas Tunggal Persada - Indonesia
- Sree Jayajothi Cements Limited - India
- Edison Trading Spa - Italy
- Krishnapatnam Port Company Ltd. - India
- Parry Sugars Refinery, India
- Power Finance Corporation Ltd., India
- Australian Commodity Traders Exchange
- Uttam Galva Steels Limited - India
- European Bulk Services B.V. - Netherlands
- MS Steel International - UAE
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