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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, 18 July 13
DRY BULK MARKETS RETAINS RECENT GAINS, MOVES SIDEWAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept on moving sideways this week, as evidenced by the latest trends of the industry's benchmark, the Baltic Dry Index (BDI ...
Wednesday, 17 July 13
NEWCASTLE COAL EXPORTS FELL 3.85% ON WEEK
COALspot.com: Newcastle port in Australia has loaded 2,860,149 tons of coal for the week ended 0700 hours 15 July 2013, Newcastle Port Corp. s ...
Wednesday, 17 July 13
TORN BETWEEN A CREDIT CRUNCH AND SUSTAINABLE GROWTH - GEORGE DERMATIS
COALspot.com: In 2012 China expanded at a rate of 7.8%, its worst annual performance in 13 years, raising criticism over the newly appointed governm ...
Tuesday, 16 July 13
TAKE - OR - PAY CONTRACTS CONTINUE TO INCENTIVISE AUSTRALIAN COAL PRODUCERS DESPITE POTENTIAL NEGATIVE CASH MARGINS - WOOD MACKENZIE
Australia's coal production has continued to grow, despite lower coal prices in 2013. Global investors and suppliers are therefore questioning whet ...
Monday, 15 July 13
INDONESIAN GOVERNMENT HAS REVISED DOWN ITS JULY BENCH-MARK COAL PRICE TO US$ 81.69 PER MT
COALspot. com - Indonesian Coal Price Reference dropped 3.75 % and hitting a 2013 low. The Indonesian government has revised down its owned coal ben ...
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- Port Waratah Coal Services - Australia
- Kapuas Tunggal Persada - Indonesia
- VISA Power Limited - India
- Bangladesh Power Developement Board
- Malabar Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Sakthi Sugars Limited - India
- Neyveli Lignite Corporation Ltd, - India
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- SMG Consultants - Indonesia
- Banpu Public Company Limited - Thailand
- Metalloyd Limited - United Kingdom
- Bulk Trading Sa - Switzerland
- Ind-Barath Power Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Madhucon Powers Ltd - India
- Energy Development Corp, Philippines
- Tamil Nadu electricity Board
- Central Electricity Authority - India
- Agrawal Coal Company - India
- European Bulk Services B.V. - Netherlands
- Toyota Tsusho Corporation, Japan
- Asmin Koalindo Tuhup - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- New Zealand Coal & Carbon
- GN Power Mariveles Coal Plant, Philippines
- Orica Australia Pty. Ltd.
- Kaltim Prima Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- Orica Mining Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Central Java Power - Indonesia
- Global Coal Blending Company Limited - Australia
- Indika Energy - Indonesia
- Indonesian Coal Mining Association
- Planning Commission, India
- Salva Resources Pvt Ltd - India
- Larsen & Toubro Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Barasentosa Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- SMC Global Power, Philippines
- Altura Mining Limited, Indonesia
- Vedanta Resources Plc - India
- TeaM Sual Corporation - Philippines
- GVK Power & Infra Limited - India
- Indian Oil Corporation Limited
- International Coal Ventures Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Riau Bara Harum - Indonesia
- Semirara Mining and Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Eastern Energy - Thailand
- Bharathi Cement Corporation - India
- Thai Mozambique Logistica
- CIMB Investment Bank - Malaysia
- Essar Steel Hazira Ltd - India
- Vizag Seaport Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- London Commodity Brokers - England
- GMR Energy Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement PLC, Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Cement Manufacturers Association - India
- Bukit Makmur.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Anglo American - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Marubeni Corporation - India
- Standard Chartered Bank - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Romanian Commodities Exchange
- Bhoruka Overseas - Indonesia
- Chamber of Mines of South Africa
- Miang Besar Coal Terminal - Indonesia
- Star Paper Mills Limited - India
- Ambuja Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Savvy Resources Ltd - HongKong
- South Luzon Thermal Energy Corporation
- Mercuria Energy - Indonesia
- Deloitte Consulting - India
- Gujarat Sidhee Cement - India
- Alfred C Toepfer International GmbH - Germany
- Indogreen Group - Indonesia
- Karaikal Port Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Bhatia International Limited - India
- Goldman Sachs - Singapore
- Grasim Industreis Ltd - India
- Globalindo Alam Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Price Waterhouse Coopers - Russia
- Indian Energy Exchange, India
- PTC India Limited - India
- Global Business Power Corporation, Philippines
- Interocean Group of Companies - India
- LBH Netherlands Bv - Netherlands
- Coal and Oil Company - UAE
- Aboitiz Power Corporation - Philippines
- Sojitz Corporation - Japan
- Meralco Power Generation, Philippines
- Dalmia Cement Bharat India
- Holcim Trading Pte Ltd - Singapore
- Merrill Lynch Commodities Europe
- Therma Luzon, Inc, Philippines
- Latin American Coal - Colombia
- Semirara Mining Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jindal Steel & Power Ltd - India
- Sical Logistics Limited - India
- Rio Tinto Coal - Australia
- Ministry of Finance - Indonesia
- Energy Link Ltd, New Zealand
- Bhushan Steel Limited - India
- Kobexindo Tractors - Indoneisa
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- Indo Tambangraya Megah - Indonesia
- ICICI Bank Limited - India
- McConnell Dowell - Australia
- Borneo Indobara - Indonesia
- Australian Commodity Traders Exchange
- Economic Council, Georgia
- Iligan Light & Power Inc, Philippines
- Commonwealth Bank - Australia
- Ministry of Mines - Canada
- GAC Shipping (India) Pvt Ltd
- Kumho Petrochemical, South Korea
- Uttam Galva Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Tata Chemicals Ltd - India
- Timah Investasi Mineral - Indoneisa
- Directorate Of Revenue Intelligence - India
- Renaissance Capital - South Africa
- Ministry of Transport, Egypt
- Australian Coal Association
- Singapore Mercantile Exchange
- Coastal Gujarat Power Limited - India
- Minerals Council of Australia
- CNBM International Corporation - China
- White Energy Company Limited
- Oldendorff Carriers - Singapore
- Wilmar Investment Holdings
- Georgia Ports Authority, United States
- Wood Mackenzie - Singapore
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- Kepco SPC Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Makarim & Taira - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Posco Energy - South Korea
- The Treasury - Australian Government
- Coalindo Energy - Indonesia
- India Bulls Power Limited - India
- IEA Clean Coal Centre - UK
- Leighton Contractors Pty Ltd - Australia
- Mintek Dendrill Indonesia
- AsiaOL BioFuels Corp., Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Africa Commodities Group - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sindya Power Generating Company Private Ltd
- The University of Queensland
- Maharashtra Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- Jaiprakash Power Ventures ltd
- Independent Power Producers Association of India
- San Jose City I Power Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Bukit Baiduri Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Sinarmas Energy and Mining - Indonesia
- Parry Sugars Refinery, India
- Mercator Lines Limited - India
- Carbofer General Trading SA - India
- Pendopo Energi Batubara - Indonesia
- Eastern Coal Council - USA
- IHS Mccloskey Coal Group - USA
- Kohat Cement Company Ltd. - Pakistan
- Xindia Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Aditya Birla Group - India
- Lanco Infratech Ltd - India
- Intertek Mineral Services - Indonesia
- Parliament of New Zealand
- Simpson Spence & Young - Indonesia
- Siam City Cement - Thailand
- Electricity Authority, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- MS Steel International - UAE
- Edison Trading Spa - Italy
- Antam Resourcindo - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Medco Energi Mining Internasional
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