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