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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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Friday, 13 September 13
DIRECTOR GENERAL OF MINERAL AND COAL OF INDONESIA REVISED UP COAL PRICE REFERENCE TO US$ 76.89
COALspot. com - The Indonesian government has revised up its owned coal bench mark price by US$ 0.19/ MT to US$ 76.89 for September 2013 deliveries ...
Thursday, 12 September 13
PANAMAX : PACIFIC ROUNDS ARE NOW REPORTED BETWEEN USD 13K AND 15K PER DAY - FEARNRESEARCH
Handy
Nickel ore is a key support SE Asia/Feast rate at the moment; vessel in N.China were fixed around USD 11-12k, ships in mid China can expect a ...
Thursday, 12 September 13
CAPESIZE MARKET WILL BECOME EVEN TIGHTER - JEFFREY LANDSBERG
COALspot.com : While it is no secret that current capesize availability has become tight and has caused capesize rates to surge, availability is set ...
Thursday, 12 September 13
OVER THE WORST? WE MIGHT FIND OUT THIS WEEK - BIMCO
The shipping market has a spring in its step, even as summer draws to a close. There is it seems, confidence that finally, we are emerging into the ...
Thursday, 12 September 13
DRY BULK MARKET RALLY COMES AT A GOOD TIME FOR MOST SHIP OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The latest surge of the dry bulk market has helped offset other lingering factors, which otherwise, could have plunged freight rates to new lows. Fo ...
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- Neyveli Lignite Corporation Ltd, - India
- Kobexindo Tractors - Indoneisa
- Cement Manufacturers Association - India
- Intertek Mineral Services - Indonesia
- GVK Power & Infra Limited - India
- Commonwealth Bank - Australia
- Semirara Mining Corp, Philippines
- IEA Clean Coal Centre - UK
- Independent Power Producers Association of India
- Rashtriya Ispat Nigam Limited - India
- Carbofer General Trading SA - India
- Iligan Light & Power Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Pendopo Energi Batubara - Indonesia
- Ind-Barath Power Infra Limited - India
- Electricity Generating Authority of Thailand
- Heidelberg Cement - Germany
- Marubeni Corporation - India
- Indogreen Group - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Vedanta Resources Plc - India
- Electricity Authority, New Zealand
- Chettinad Cement Corporation Ltd - India
- Jaiprakash Power Ventures ltd
- Billiton Holdings Pty Ltd - Australia
- Eastern Coal Council - USA
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- Bharathi Cement Corporation - India
- Riau Bara Harum - Indonesia
- Coalindo Energy - Indonesia
- Petron Corporation, Philippines
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- New Zealand Coal & Carbon
- TeaM Sual Corporation - Philippines
- White Energy Company Limited
- Kumho Petrochemical, South Korea
- Sojitz Corporation - Japan
- London Commodity Brokers - England
- Banpu Public Company Limited - Thailand
- Mintek Dendrill Indonesia
- PNOC Exploration Corporation - Philippines
- Agrawal Coal Company - India
- Essar Steel Hazira Ltd - India
- South Luzon Thermal Energy Corporation
- Chamber of Mines of South Africa
- Parliament of New Zealand
- Maheswari Brothers Coal Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Baiduri Energy - Indonesia
- Bhoruka Overseas - Indonesia
- SMC Global Power, Philippines
- International Coal Ventures Pvt Ltd - India
- Energy Development Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Manunggal Multi Energi - Indonesia
- Deloitte Consulting - India
- Kalimantan Lumbung Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement PLC, Thailand
- PetroVietnam Power Coal Import and Supply Company
- Oldendorff Carriers - Singapore
- PTC India Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Price Waterhouse Coopers - Russia
- Kaltim Prima Coal - Indonesia
- Jindal Steel & Power Ltd - India
- Minerals Council of Australia
- Mercuria Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- ASAPP Information Group - India
- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- Krishnapatnam Port Company Ltd. - India
- Gujarat Sidhee Cement - India
- Indika Energy - Indonesia
- Parry Sugars Refinery, India
- VISA Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Meralco Power Generation, Philippines
- Central Electricity Authority - India
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- Orica Mining Services - Indonesia
- Africa Commodities Group - South Africa
- LBH Netherlands Bv - Netherlands
- Rio Tinto Coal - Australia
- Semirara Mining and Power Corporation, Philippines
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- Georgia Ports Authority, United States
- Eastern Energy - Thailand
- Thai Mozambique Logistica
- Merrill Lynch Commodities Europe
- Madhucon Powers Ltd - India
- Therma Luzon, Inc, Philippines
- Indonesian Coal Mining Association
- Kartika Selabumi Mining - Indonesia
- Anglo American - United Kingdom
- Sical Logistics Limited - India
- Leighton Contractors Pty Ltd - Australia
- Central Java Power - Indonesia
- The University of Queensland
- Grasim Industreis Ltd - India
- Karaikal Port Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Ministry of Transport, Egypt
- ICICI Bank Limited - India
- Bhatia International Limited - India
- Tamil Nadu electricity Board
- Makarim & Taira - Indonesia
- Medco Energi Mining Internasional
- Romanian Commodities Exchange
- Holcim Trading Pte Ltd - Singapore
- Bulk Trading Sa - Switzerland
- Ministry of Mines - Canada
- Kohat Cement Company Ltd. - Pakistan
- Salva Resources Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- Samtan Co., Ltd - South Korea
- Xindia Steels Limited - India
- Antam Resourcindo - Indonesia
- Tata Chemicals Ltd - India
- Ministry of Finance - Indonesia
- Uttam Galva Steels Limited - India
- Energy Link Ltd, New Zealand
- SN Aboitiz Power Inc, Philippines
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- Cigading International Bulk Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Metalloyd Limited - United Kingdom
- Aditya Birla Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Lanco Infratech Ltd - India
- Wood Mackenzie - Singapore
- McConnell Dowell - Australia
- Straits Asia Resources Limited - Singapore
- GMR Energy Limited - India
- Dalmia Cement Bharat India
- GAC Shipping (India) Pvt Ltd
- Bhushan Steel Limited - India
- Globalindo Alam Lestari - Indonesia
- Economic Council, Georgia
- Goldman Sachs - Singapore
- Sindya Power Generating Company Private Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Bayan Resources Tbk. - Indonesia
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- Sinarmas Energy and Mining - Indonesia
- SMG Consultants - Indonesia
- Timah Investasi Mineral - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Attock Cement Pakistan Limited
- Power Finance Corporation Ltd., India
- Interocean Group of Companies - India
- Savvy Resources Ltd - HongKong
- Karbindo Abesyapradhi - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Aboitiz Power Corporation - Philippines
- Mercator Lines Limited - India
- Standard Chartered Bank - UAE
- CIMB Investment Bank - Malaysia
- Singapore Mercantile Exchange
- Vizag Seaport Private Limited - India
- MS Steel International - UAE
- Posco Energy - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Baramulti Group, Indonesia
- Ambuja Cements Ltd - India
- Planning Commission, India
- Indian Energy Exchange, India
- Altura Mining Limited, Indonesia
- Bukit Makmur.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Australian Coal Association
- Barasentosa Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Indo Tambangraya Megah - Indonesia
- Siam City Cement - Thailand
- Thiess Contractors Indonesia
- Larsen & Toubro Limited - India
- The State Trading Corporation of India Ltd
- Indian Oil Corporation Limited
- Binh Thuan Hamico - Vietnam
- Sakthi Sugars Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Global Coal Blending Company Limited - Australia
- Toyota Tsusho Corporation, Japan
- Meenaskhi Energy Private Limited - India
- Australian Commodity Traders Exchange
- India Bulls Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Sree Jayajothi Cements Limited - India
- Coastal Gujarat Power Limited - India
- San Jose City I Power Corp, Philippines
- Malabar Cements Ltd - India
- Global Business Power Corporation, Philippines
- Latin American Coal - Colombia
- Ceylon Electricity Board - Sri Lanka
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