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