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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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Thursday, 22 August 13
PANAMAX : PERIOD MARKET IS STILL BEING LED BY STRONGER SENTIMENT IN THE FFA'S - FEARNRESEARCH
Handy
This week started slowly as expected. Indo biz now rate APS around 7k +60k to china and around 8k+80k to India. However, there are some ships ...
Wednesday, 21 August 13
DRY BULK SHIPPING - POSITIVE WINDOW FOR CAPESIZE OWNERS - PETER SAND
By: Peter Sand, Chief Shipping Analyst, BIMCO
Demand:
“Expect the unexpected from the dry bulk market” was what we wrote last time ar ...
Wednesday, 21 August 13
RATES FOR CAPES MOVED DECISIVELY NORTH THIS WEEK - INTERMODAL
COALspot.com - Right when the BDI seemed ready for another dive below the 1000 points level, the Dry Bulk market made significant comeback this week ...
Tuesday, 20 August 13
AUSTRALIA NEWCASTLE COAL EXPORTS FALL 19.15 PERCENT ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port fell 19.15 per cent week on week to 2.39 million mt f ...
Tuesday, 20 August 13
CAPESIZE RATES MORE SENSITIVE TO DEMAND - COMMODORE RESEARCH & CONSULTANCY
COALspot.com : Approximately 71.50 million tons of iron ore is now stockpiled at Chinese ports, 900,000 tons (-1%) less than a week ago, Commodore R ...
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- OPG Power Generation Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- GVK Power & Infra Limited - India
- Ministry of Mines - Canada
- Jindal Steel & Power Ltd - India
- Vedanta Resources Plc - India
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- Indian Energy Exchange, India
- Deloitte Consulting - India
- Straits Asia Resources Limited - Singapore
- Kartika Selabumi Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- LBH Netherlands Bv - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Indonesian Coal Mining Association
- MS Steel International - UAE
- GAC Shipping (India) Pvt Ltd
- IHS Mccloskey Coal Group - USA
- Kumho Petrochemical, South Korea
- Independent Power Producers Association of India
- Malabar Cements Ltd - India
- Petron Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- SMG Consultants - Indonesia
- Directorate Of Revenue Intelligence - India
- Holcim Trading Pte Ltd - Singapore
- Sical Logistics Limited - India
- Chettinad Cement Corporation Ltd - India
- Madhucon Powers Ltd - India
- Maheswari Brothers Coal Limited - India
- Krishnapatnam Port Company Ltd. - India
- IEA Clean Coal Centre - UK
- Australian Coal Association
- Cement Manufacturers Association - India
- Planning Commission, India
- Thai Mozambique Logistica
- Orica Mining Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Star Paper Mills Limited - India
- Coal and Oil Company - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Antam Resourcindo - Indonesia
- PTC India Limited - India
- India Bulls Power Limited - India
- Global Coal Blending Company Limited - Australia
- Carbofer General Trading SA - India
- Indogreen Group - Indonesia
- Chamber of Mines of South Africa
- Sree Jayajothi Cements Limited - India
- Vizag Seaport Private Limited - India
- Electricity Generating Authority of Thailand
- Jorong Barutama Greston.PT - Indonesia
- Africa Commodities Group - South Africa
- Heidelberg Cement - Germany
- Metalloyd Limited - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Aditya Birla Group - India
- Bhoruka Overseas - Indonesia
- Dalmia Cement Bharat India
- Orica Australia Pty. Ltd.
- Kohat Cement Company Ltd. - Pakistan
- Banpu Public Company Limited - Thailand
- South Luzon Thermal Energy Corporation
- Bhushan Steel Limited - India
- Tata Chemicals Ltd - India
- Aboitiz Power Corporation - Philippines
- Xindia Steels Limited - India
- Larsen & Toubro Limited - India
- Videocon Industries ltd - India
- Ceylon Electricity Board - Sri Lanka
- Attock Cement Pakistan Limited
- Leighton Contractors Pty Ltd - Australia
- Ministry of Transport, Egypt
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Bhatia International Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- CNBM International Corporation - China
- Miang Besar Coal Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Indika Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Georgia Ports Authority, United States
- Petrochimia International Co. Ltd.- Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wood Mackenzie - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Agrawal Coal Company - India
- ASAPP Information Group - India
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- Ambuja Cements Ltd - India
- Renaissance Capital - South Africa
- Savvy Resources Ltd - HongKong
- Bangladesh Power Developement Board
- Billiton Holdings Pty Ltd - Australia
- Singapore Mercantile Exchange
- Kapuas Tunggal Persada - Indonesia
- White Energy Company Limited
- Mercator Lines Limited - India
- Commonwealth Bank - Australia
- Cigading International Bulk Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Eastern Energy - Thailand
- Kobexindo Tractors - Indoneisa
- Manunggal Multi Energi - Indonesia
- Makarim & Taira - Indonesia
- Mjunction Services Limited - India
- Electricity Authority, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Altura Mining Limited, Indonesia
- Eastern Coal Council - USA
- SMC Global Power, Philippines
- London Commodity Brokers - England
- Semirara Mining Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Essar Steel Hazira Ltd - India
- Romanian Commodities Exchange
- Uttam Galva Steels Limited - India
- Baramulti Group, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Economic Council, Georgia
- Toyota Tsusho Corporation, Japan
- Karbindo Abesyapradhi - Indoneisa
- Sarangani Energy Corporation, Philippines
- Sakthi Sugars Limited - India
- Borneo Indobara - Indonesia
- VISA Power Limited - India
- Kideco Jaya Agung - Indonesia
- Coastal Gujarat Power Limited - India
- Tamil Nadu electricity Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- The State Trading Corporation of India Ltd
- Iligan Light & Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- McConnell Dowell - Australia
- Bulk Trading Sa - Switzerland
- PowerSource Philippines DevCo
- Price Waterhouse Coopers - Russia
- Intertek Mineral Services - Indonesia
- ICICI Bank Limited - India
- Maharashtra Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- Trasteel International SA, Italy
- Bukit Baiduri Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- TeaM Sual Corporation - Philippines
- Merrill Lynch Commodities Europe
- Energy Development Corp, Philippines
- Interocean Group of Companies - India
- PNOC Exploration Corporation - Philippines
- Mintek Dendrill Indonesia
- Formosa Plastics Group - Taiwan
- Jaiprakash Power Ventures ltd
- Anglo American - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Port Waratah Coal Services - Australia
- Wilmar Investment Holdings
- Rio Tinto Coal - Australia
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- Posco Energy - South Korea
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- The University of Queensland
- Bahari Cakrawala Sebuku - Indonesia
- Medco Energi Mining Internasional
- Goldman Sachs - Singapore
- Gujarat Mineral Development Corp Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Minerals Council of Australia
- Parry Sugars Refinery, India
- Sojitz Corporation - Japan
- Edison Trading Spa - Italy
- Lanco Infratech Ltd - India
- Global Business Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- New Zealand Coal & Carbon
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Link Ltd, New Zealand
- Oldendorff Carriers - Singapore
- Samtan Co., Ltd - South Korea
- Parliament of New Zealand
- Central Java Power - Indonesia
- Simpson Spence & Young - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Ministry of Finance - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Meralco Power Generation, Philippines
- CIMB Investment Bank - Malaysia
- Meenaskhi Energy Private Limited - India
- Siam City Cement - Thailand
- Standard Chartered Bank - UAE
- SN Aboitiz Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Therma Luzon, Inc, Philippines
- Latin American Coal - Colombia
- Marubeni Corporation - India
- Timah Investasi Mineral - Indoneisa
- Power Finance Corporation Ltd., India
- Global Green Power PLC Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Bayan Resources Tbk. - Indonesia
- Barasentosa Lestari - Indonesia
- Australian Commodity Traders Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Thiess Contractors Indonesia
- The Treasury - Australian Government
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