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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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Sunday, 01 September 13
INDONESIA TO INDIA SPOT FREIGHT STAYS FIRM THIS WEEK - VISTAAR
COALspot.com: The freight market continued to be firm with even though the BDI and Cape index dropped by about 3 pct week on week.
The BDI was do ...
Friday, 30 August 13
US COAL PRODUCTION FELL 0.48 PERCENT WEEK ON WEEK - EIA
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.70 million short tons (mmst) of ...
Thursday, 29 August 13
HANDY: THE PACIFIC MARKET STARTED HEALTHY THIS WEEK - FEARNRESEARCH
Handy
The Pacific market started healthy this week. We have seen many bauxite, iron ore and few coal fixtures. Ships passing Singapore were able to ...
Thursday, 29 August 13
NO RATING IMPACT ON INDONESIAN ENERGY COMPANIES FROM RUPIAH DEPRECIATION - FITCH RATINGS
Fitch Ratings says the credit profiles of rated Indonesian energy and utilities companies, including thermal coal producers, will largely remain una ...
Wednesday, 28 August 13
THE BDI HAS MOVED TO LEVELS CONSIDERABLY STRONGER THAN THE BEGINNING OF THE YEAR - INTERMODAL
By George Bassakos
SnP Broker - Intermodal
We have already reached the end of August and whilst students are preparing themselves for another sc ...
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- New Zealand Coal & Carbon
- Therma Luzon, Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Goldman Sachs - Singapore
- Coalindo Energy - Indonesia
- Madhucon Powers Ltd - India
- Binh Thuan Hamico - Vietnam
- Edison Trading Spa - Italy
- CIMB Investment Bank - Malaysia
- Global Green Power PLC Corporation, Philippines
- Carbofer General Trading SA - India
- OPG Power Generation Pvt Ltd - India
- CNBM International Corporation - China
- Bulk Trading Sa - Switzerland
- Petron Corporation, Philippines
- Riau Bara Harum - Indonesia
- Thiess Contractors Indonesia
- Karaikal Port Pvt Ltd - India
- GMR Energy Limited - India
- Iligan Light & Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- Kepco SPC Power Corporation, Philippines
- MS Steel International - UAE
- McConnell Dowell - Australia
- Karbindo Abesyapradhi - Indoneisa
- Bhatia International Limited - India
- Eastern Energy - Thailand
- Wood Mackenzie - Singapore
- Australian Commodity Traders Exchange
- Jaiprakash Power Ventures ltd
- Banpu Public Company Limited - Thailand
- Simpson Spence & Young - Indonesia
- Maheswari Brothers Coal Limited - India
- Economic Council, Georgia
- Mintek Dendrill Indonesia
- Indo Tambangraya Megah - Indonesia
- Orica Australia Pty. Ltd.
- Mjunction Services Limited - India
- India Bulls Power Limited - India
- Merrill Lynch Commodities Europe
- Bangladesh Power Developement Board
- Bhushan Steel Limited - India
- Agrawal Coal Company - India
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- Formosa Plastics Group - Taiwan
- Intertek Mineral Services - Indonesia
- San Jose City I Power Corp, Philippines
- Mercator Lines Limited - India
- Attock Cement Pakistan Limited
- Vedanta Resources Plc - India
- Meenaskhi Energy Private Limited - India
- Orica Mining Services - Indonesia
- Anglo American - United Kingdom
- Medco Energi Mining Internasional
- Ministry of Transport, Egypt
- Indika Energy - Indonesia
- Romanian Commodities Exchange
- Siam City Cement PLC, Thailand
- Minerals Council of Australia
- PTC India Limited - India
- Australian Coal Association
- Kohat Cement Company Ltd. - Pakistan
- Coastal Gujarat Power Limited - India
- Ind-Barath Power Infra Limited - India
- Georgia Ports Authority, United States
- VISA Power Limited - India
- Larsen & Toubro Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Cement Manufacturers Association - India
- Oldendorff Carriers - Singapore
- Coal and Oil Company - UAE
- Deloitte Consulting - India
- Grasim Industreis Ltd - India
- ICICI Bank Limited - India
- Toyota Tsusho Corporation, Japan
- Kartika Selabumi Mining - Indonesia
- Bharathi Cement Corporation - India
- Straits Asia Resources Limited - Singapore
- GAC Shipping (India) Pvt Ltd
- Sical Logistics Limited - India
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Posco Energy - South Korea
- Power Finance Corporation Ltd., India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thai Mozambique Logistica
- Bukit Baiduri Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- European Bulk Services B.V. - Netherlands
- Heidelberg Cement - Germany
- GVK Power & Infra Limited - India
- Electricity Authority, New Zealand
- IEA Clean Coal Centre - UK
- White Energy Company Limited
- PowerSource Philippines DevCo
- Energy Link Ltd, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Pipit Mutiara Jaya. PT, Indonesia
- Parliament of New Zealand
- Indian Oil Corporation Limited
- Gujarat Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kideco Jaya Agung - Indonesia
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Africa Commodities Group - South Africa
- Gujarat Sidhee Cement - India
- Bayan Resources Tbk. - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Eastern Coal Council - USA
- Price Waterhouse Coopers - Russia
- Renaissance Capital - South Africa
- Antam Resourcindo - Indonesia
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- SMC Global Power, Philippines
- Directorate Of Revenue Intelligence - India
- Kaltim Prima Coal - Indonesia
- Siam City Cement - Thailand
- Standard Chartered Bank - UAE
- Lanco Infratech Ltd - India
- Planning Commission, India
- Kumho Petrochemical, South Korea
- Ambuja Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Indonesian Coal Mining Association
- Electricity Generating Authority of Thailand
- Semirara Mining Corp, Philippines
- Salva Resources Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Indian Energy Exchange, India
- SMG Consultants - Indonesia
- Videocon Industries ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Savvy Resources Ltd - HongKong
- Directorate General of MIneral and Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Baramulti Group, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Independent Power Producers Association of India
- Latin American Coal - Colombia
- Rio Tinto Coal - Australia
- Sojitz Corporation - Japan
- Kalimantan Lumbung Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Chamber of Mines of South Africa
- Gujarat Mineral Development Corp Ltd - India
- Globalindo Alam Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- ASAPP Information Group - India
- Samtan Co., Ltd - South Korea
- Essar Steel Hazira Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Xindia Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- PetroVietnam Power Coal Import and Supply Company
- The University of Queensland
- Miang Besar Coal Terminal - Indonesia
- Energy Development Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Meralco Power Generation, Philippines
- Interocean Group of Companies - India
- Dalmia Cement Bharat India
- Port Waratah Coal Services - Australia
- IHS Mccloskey Coal Group - USA
- Bukit Makmur.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Star Paper Mills Limited - India
- TeaM Sual Corporation - Philippines
- London Commodity Brokers - England
- Altura Mining Limited, Indonesia
- Chettinad Cement Corporation Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Rashtriya Ispat Nigam Limited - India
- Manunggal Multi Energi - Indonesia
- Commonwealth Bank - Australia
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- The Treasury - Australian Government
- Krishnapatnam Port Company Ltd. - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The State Trading Corporation of India Ltd
- Uttam Galva Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- AsiaOL BioFuels Corp., Philippines
- Marubeni Corporation - India
- Ministry of Finance - Indonesia
- Tamil Nadu electricity Board
- Semirara Mining and Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Central Electricity Authority - India
- Wilmar Investment Holdings
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Trasteel International SA, Italy
- LBH Netherlands Bv - Netherlands
- Indogreen Group - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Borneo Indobara - Indonesia
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- Barasentosa Lestari - Indonesia
- Makarim & Taira - Indonesia
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