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