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