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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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Monday, 23 September 13
AUSTRALIA'S NEWCASTLE PORT SHIPPED 3 PERCENT LESS COAL WEEK ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port fell 3 per cent week on week to 2.92 million mt for t ...
Sunday, 22 September 13
BDI STRENGTHENS FURTHER AS CAPESIZE FREIGHT RATES JUMP - CAPT. REDDY
COALspot.com: The freight market continued its upward trend and maintaining the moment with BDI and Cape index up by 16 pct week on week. The Capesi ...
Sunday, 22 September 13
API 8 CFR SOUTH CHINA COAL SWAPS ADVANCE
COALspot.com : SGX has launched API 8 CFR South China Coal Swap on 29 April 2013 and SGX replaced the previous swap.
API 8 CFR South China Coal s ...
Sunday, 22 September 13
SUB-BIT INDONESIA COAL SWAPS REMAIN UNDER PRESSURE
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery down 2.09 percept month on month on Friday 20 September 2 ...
Friday, 20 September 13
SHIP OWNERS INVEST MORE THAN $9.2 BILLION ON NEW BUILDING VESSELS DURING AUGUST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Despite the fact that August is traditionally a slow month in terms of ships investment activity, ship owners have grasped this year the opportunity ...
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- Directorate Of Revenue Intelligence - India
- Attock Cement Pakistan Limited
- ICICI Bank Limited - India
- Billiton Holdings Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Sarangani Energy Corporation, Philippines
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Mintek Dendrill Indonesia
- Samtan Co., Ltd - South Korea
- Rashtriya Ispat Nigam Limited - India
- Tamil Nadu electricity Board
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- European Bulk Services B.V. - Netherlands
- Antam Resourcindo - Indonesia
- Medco Energi Mining Internasional
- Australian Coal Association
- South Luzon Thermal Energy Corporation
- CIMB Investment Bank - Malaysia
- Ind-Barath Power Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Posco Energy - South Korea
- Ambuja Cements Ltd - India
- IEA Clean Coal Centre - UK
- The State Trading Corporation of India Ltd
- Meenaskhi Energy Private Limited - India
- Ministry of Transport, Egypt
- Holcim Trading Pte Ltd - Singapore
- TeaM Sual Corporation - Philippines
- Merrill Lynch Commodities Europe
- Sree Jayajothi Cements Limited - India
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- SMG Consultants - Indonesia
- PTC India Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- SMC Global Power, Philippines
- Lanco Infratech Ltd - India
- Wilmar Investment Holdings
- Baramulti Group, Indonesia
- Interocean Group of Companies - India
- Thiess Contractors Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Barasentosa Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Tata Chemicals Ltd - India
- Vedanta Resources Plc - India
- PetroVietnam Power Coal Import and Supply Company
- Formosa Plastics Group - Taiwan
- Kapuas Tunggal Persada - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- VISA Power Limited - India
- Mercator Lines Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Savvy Resources Ltd - HongKong
- Siam City Cement PLC, Thailand
- GVK Power & Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Sical Logistics Limited - India
- Bayan Resources Tbk. - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Latin American Coal - Colombia
- GMR Energy Limited - India
- Marubeni Corporation - India
- Chettinad Cement Corporation Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coal and Oil Company - UAE
- Toyota Tsusho Corporation, Japan
- Global Business Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- CNBM International Corporation - China
- Pipit Mutiara Jaya. PT, Indonesia
- Goldman Sachs - Singapore
- Electricity Authority, New Zealand
- Riau Bara Harum - Indonesia
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- Energy Development Corp, Philippines
- Therma Luzon, Inc, Philippines
- Bharathi Cement Corporation - India
- Star Paper Mills Limited - India
- Bhatia International Limited - India
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Heidelberg Cement - Germany
- The Treasury - Australian Government
- San Jose City I Power Corp, Philippines
- Xindia Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
- Price Waterhouse Coopers - Russia
- AsiaOL BioFuels Corp., Philippines
- Kepco SPC Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Georgia Ports Authority, United States
- Metalloyd Limited - United Kingdom
- Intertek Mineral Services - Indonesia
- Kumho Petrochemical, South Korea
- Global Green Power PLC Corporation, Philippines
- Indian Oil Corporation Limited
- Australian Commodity Traders Exchange
- Asmin Koalindo Tuhup - Indonesia
- Vizag Seaport Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Uttam Galva Steels Limited - India
- Edison Trading Spa - Italy
- Altura Mining Limited, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Mines - Canada
- Gujarat Electricity Regulatory Commission - India
- The University of Queensland
- Central Java Power - Indonesia
- Commonwealth Bank - Australia
- Deloitte Consulting - India
- Chamber of Mines of South Africa
- Gujarat Sidhee Cement - India
- PowerSource Philippines DevCo
- Aboitiz Power Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Videocon Industries ltd - India
- Petron Corporation, Philippines
- Larsen & Toubro Limited - India
- Cement Manufacturers Association - India
- Jorong Barutama Greston.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Indika Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- IHS Mccloskey Coal Group - USA
- London Commodity Brokers - England
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- Ministry of Finance - Indonesia
- SN Aboitiz Power Inc, Philippines
- Malabar Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Semirara Mining Corp, Philippines
- Eastern Energy - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- MS Steel International - UAE
- Trasteel International SA, Italy
- Global Coal Blending Company Limited - Australia
- Bulk Trading Sa - Switzerland
- Salva Resources Pvt Ltd - India
- Standard Chartered Bank - UAE
- Borneo Indobara - Indonesia
- Romanian Commodities Exchange
- India Bulls Power Limited - India
- Thai Mozambique Logistica
- Port Waratah Coal Services - Australia
- Parliament of New Zealand
- Meralco Power Generation, Philippines
- Energy Link Ltd, New Zealand
- Anglo American - United Kingdom
- Jaiprakash Power Ventures ltd
- Agrawal Coal Company - India
- Dalmia Cement Bharat India
- Bangladesh Power Developement Board
- GAC Shipping (India) Pvt Ltd
- Oldendorff Carriers - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Planning Commission, India
- Maheswari Brothers Coal Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Orica Mining Services - Indonesia
- White Energy Company Limited
- Cigading International Bulk Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Sindya Power Generating Company Private Ltd
- Power Finance Corporation Ltd., India
- Electricity Generating Authority of Thailand
- Bhoruka Overseas - Indonesia
- Indian Energy Exchange, India
- Miang Besar Coal Terminal - Indonesia
- Rio Tinto Coal - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Indogreen Group - Indonesia
- Straits Asia Resources Limited - Singapore
- Mjunction Services Limited - India
- Semirara Mining and Power Corporation, Philippines
- New Zealand Coal & Carbon
- Coalindo Energy - Indonesia
- Africa Commodities Group - South Africa
- Wood Mackenzie - Singapore
- Aditya Birla Group - India
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- Essar Steel Hazira Ltd - India
- Singapore Mercantile Exchange
- Minerals Council of Australia
- Leighton Contractors Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- Madhucon Powers Ltd - India
- Bhushan Steel Limited - India
- Siam City Cement - Thailand
- Renaissance Capital - South Africa
- Mercuria Energy - Indonesia
- McConnell Dowell - Australia
- Economic Council, Georgia
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