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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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Wednesday, 11 September 13
ASIA - PACIFIC THERMAL COAL MARKET TO REMAIN OVERSUPPLIED IN NEXT 12 MONTHS - FITCH RATINGS
COALspot.com: Fitch Ratings says the Asia-Pacific thermal coal market will remain oversupplied in the next 12 months because strong production has b ...
Tuesday, 10 September 13
COAL EXPORTS AT AUSTRALIA'S NEWCASTLE PORT SLIP 30.31% ON WEEK TO 2.36 MMT
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port down 30.31 per cent week on week to 2.36 million mt f ...
Tuesday, 10 September 13
WORLDWIDE COAL CONSUMPTION RISES SHARPLY - RA DR. ERICH SCHMITZ
By: RA Dr. Erich Schmitz, Verein der Kohlenimporteure (Germany Coal Importers Association)
World hard coal market in the first half of 2013: worl ...
Monday, 09 September 13
REBOUND IN NEWBUILDING ORDERS HASN'T HURT DRY BULK MARKET PROSPECTS, BUT SHIP OWNERS SHOULD STILL BE CAUTIOUS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Since the start of 2013 and up until the end of August, one thing has really caught the headlines in the dry bulk market, except of course, the frei ...
Sunday, 08 September 13
Q3 2014 THERMAL COAL SWAPS : STEADY DIRECTION
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery up 1.88 percent month on month. The swap was moved ...
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- PetroVietnam Power Coal Import and Supply Company
- MS Steel International - UAE
- Romanian Commodities Exchange
- Agrawal Coal Company - India
- Leighton Contractors Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pendopo Energi Batubara - Indonesia
- Videocon Industries ltd - India
- Global Business Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Australian Commodity Traders Exchange
- Kepco SPC Power Corporation, Philippines
- Baramulti Group, Indonesia
- International Coal Ventures Pvt Ltd - India
- Goldman Sachs - Singapore
- Aditya Birla Group - India
- Indika Energy - Indonesia
- Chamber of Mines of South Africa
- Cement Manufacturers Association - India
- Sindya Power Generating Company Private Ltd
- Intertek Mineral Services - Indonesia
- Bulk Trading Sa - Switzerland
- Coal and Oil Company - UAE
- Kobexindo Tractors - Indoneisa
- Orica Mining Services - Indonesia
- Dalmia Cement Bharat India
- Pipit Mutiara Jaya. PT, Indonesia
- Coalindo Energy - Indonesia
- Electricity Authority, New Zealand
- Krishnapatnam Port Company Ltd. - India
- New Zealand Coal & Carbon
- Semirara Mining Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- The University of Queensland
- Sojitz Corporation - Japan
- Gujarat Mineral Development Corp Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Bhushan Steel Limited - India
- Uttam Galva Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Timah Investasi Mineral - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Interocean Group of Companies - India
- Kaltim Prima Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Indian Energy Exchange, India
- Altura Mining Limited, Indonesia
- London Commodity Brokers - England
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- Eastern Energy - Thailand
- McConnell Dowell - Australia
- Siam City Cement PLC, Thailand
- Karbindo Abesyapradhi - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Binh Thuan Hamico - Vietnam
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Bahari Cakrawala Sebuku - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Mercator Lines Limited - India
- OPG Power Generation Pvt Ltd - India
- Borneo Indobara - Indonesia
- PowerSource Philippines DevCo
- Formosa Plastics Group - Taiwan
- IHS Mccloskey Coal Group - USA
- Indonesian Coal Mining Association
- Bhatia International Limited - India
- The State Trading Corporation of India Ltd
- Planning Commission, India
- Ministry of Mines - Canada
- Renaissance Capital - South Africa
- Ind-Barath Power Infra Limited - India
- Parliament of New Zealand
- Holcim Trading Pte Ltd - Singapore
- Gujarat Sidhee Cement - India
- Sakthi Sugars Limited - India
- Posco Energy - South Korea
- Tamil Nadu electricity Board
- Malabar Cements Ltd - India
- Ministry of Transport, Egypt
- Chettinad Cement Corporation Ltd - India
- Wood Mackenzie - Singapore
- Merrill Lynch Commodities Europe
- Deloitte Consulting - India
- The Treasury - Australian Government
- Bhoruka Overseas - Indonesia
- Heidelberg Cement - Germany
- Bukit Baiduri Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Central Java Power - Indonesia
- Vizag Seaport Private Limited - India
- Meralco Power Generation, Philippines
- Bangladesh Power Developement Board
- Directorate General of MIneral and Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ambuja Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- White Energy Company Limited
- Gujarat Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- European Bulk Services B.V. - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- GMR Energy Limited - India
- Tata Chemicals Ltd - India
- Latin American Coal - Colombia
- Power Finance Corporation Ltd., India
- Rio Tinto Coal - Australia
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- CIMB Investment Bank - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Mjunction Services Limited - India
- Toyota Tsusho Corporation, Japan
- Global Coal Blending Company Limited - Australia
- Kartika Selabumi Mining - Indonesia
- Indian Oil Corporation Limited
- Sical Logistics Limited - India
- Madhucon Powers Ltd - India
- PNOC Exploration Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Metalloyd Limited - United Kingdom
- Minerals Council of Australia
- Jindal Steel & Power Ltd - India
- Indogreen Group - Indonesia
- Anglo American - United Kingdom
- Central Electricity Authority - India
- Edison Trading Spa - Italy
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- Aboitiz Power Corporation - Philippines
- Makarim & Taira - Indonesia
- Standard Chartered Bank - UAE
- Commonwealth Bank - Australia
- Karaikal Port Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- Energy Development Corp, Philippines
- Price Waterhouse Coopers - Russia
- Kapuas Tunggal Persada - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Independent Power Producers Association of India
- Orica Australia Pty. Ltd.
- Barasentosa Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Thai Mozambique Logistica
- Australian Coal Association
- Global Green Power PLC Corporation, Philippines
- Siam City Cement - Thailand
- Vedanta Resources Plc - India
- Ministry of Finance - Indonesia
- Star Paper Mills Limited - India
- Parry Sugars Refinery, India
- TeaM Sual Corporation - Philippines
- PTC India Limited - India
- Banpu Public Company Limited - Thailand
- Larsen & Toubro Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Singapore Mercantile Exchange
- Energy Link Ltd, New Zealand
- Alfred C Toepfer International GmbH - Germany
- Sree Jayajothi Cements Limited - India
- San Jose City I Power Corp, Philippines
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- Straits Asia Resources Limited - Singapore
- SN Aboitiz Power Inc, Philippines
- SMC Global Power, Philippines
- Marubeni Corporation - India
- Cigading International Bulk Terminal - Indonesia
- SMG Consultants - Indonesia
- ASAPP Information Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wilmar Investment Holdings
- Bukit Asam (Persero) Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- Kumho Petrochemical, South Korea
- Georgia Ports Authority, United States
- GVK Power & Infra Limited - India
- Grasim Industreis Ltd - India
- Petron Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Trasteel International SA, Italy
- Bharathi Cement Corporation - India
- Thiess Contractors Indonesia
- VISA Power Limited - India
- Economic Council, Georgia
- Port Waratah Coal Services - Australia
- Carbofer General Trading SA - India
- Mercuria Energy - Indonesia
- Mintek Dendrill Indonesia
- Bukit Makmur.PT - Indonesia
- Simpson Spence & Young - Indonesia
- CNBM International Corporation - China
- Essar Steel Hazira Ltd - India
- GAC Shipping (India) Pvt Ltd
- Petrochimia International Co. Ltd.- Taiwan
- India Bulls Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Attock Cement Pakistan Limited
- IEA Clean Coal Centre - UK
- Riau Bara Harum - Indonesia
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