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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, 30 May 13
HANDY: RBCT ROUND WAS AROUND USD 9K + 300 BB - FEARNRESEARCH
Handy
THE Atlantic market remained flat. The USG-Feast was at USD 19k and Black Sea-Feast was at USD 12k. The Pacific market remained quiet with no ...
Wednesday, 29 May 13
SHIP OWNERS KEEP ON SPENDING ON NEWBUILDINGS AS PRICES ARE DEEMED TOO LOW TO RESIST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
It's been yet another week on increased newbuilding ordering activity with Hellenic ship owners appearing rathe active, on the back of attractive f ...
Tuesday, 28 May 13
NEWCASTLE PORT SHIPPED 9.76 PERCENT MORE COAL W/E 27 MAY 2013
COALspot.com - Newcastle port in Australia has loaded 2,420,366 tons of coal for week ended 0700 hours 27 May 2013, Newcastle Port Corp. said ...
Sunday, 26 May 13
AMPLE SUPPLY, LOW DEMAND KEEP COAL PRICES UNDER PRESSURE
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average July 2013 delivery have lost 0.07 percent and API 8 CFR South China Coal shipment los ...
Friday, 24 May 13
ENGAGEMENT WITH POTENTIAL STRATEGIC AND OFF TAKE PARTNERS ACCELERATING - REALM RESOURCES
COALspot.com - Following the recent completion of the Feasibility Study, the Realm Resources Ltd. (ASX: RRP) has focused on securing strategic ...
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- Oldendorff Carriers - Singapore
- PTC India Limited - India
- Binh Thuan Hamico - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Carbofer General Trading SA - India
- Chamber of Mines of South Africa
- Anglo American - United Kingdom
- Central Electricity Authority - India
- White Energy Company Limited
- Antam Resourcindo - Indonesia
- London Commodity Brokers - England
- Marubeni Corporation - India
- Meenaskhi Energy Private Limited - India
- McConnell Dowell - Australia
- Australian Coal Association
- Holcim Trading Pte Ltd - Singapore
- Ceylon Electricity Board - Sri Lanka
- The University of Queensland
- Rashtriya Ispat Nigam Limited - India
- Cement Manufacturers Association - India
- Singapore Mercantile Exchange
- Global Green Power PLC Corporation, Philippines
- Posco Energy - South Korea
- Sinarmas Energy and Mining - Indonesia
- Aditya Birla Group - India
- Maheswari Brothers Coal Limited - India
- Gujarat Sidhee Cement - India
- ICICI Bank Limited - India
- Goldman Sachs - Singapore
- Bhatia International Limited - India
- Sical Logistics Limited - India
- Thiess Contractors Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Billiton Holdings Pty Ltd - Australia
- New Zealand Coal & Carbon
- GAC Shipping (India) Pvt Ltd
- Toyota Tsusho Corporation, Japan
- Essar Steel Hazira Ltd - India
- Global Coal Blending Company Limited - Australia
- Romanian Commodities Exchange
- India Bulls Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement - Thailand
- Petron Corporation, Philippines
- Baramulti Group, Indonesia
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- Kideco Jaya Agung - Indonesia
- Indonesian Coal Mining Association
- Ministry of Transport, Egypt
- Krishnapatnam Port Company Ltd. - India
- Cigading International Bulk Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Trasteel International SA, Italy
- Siam City Cement PLC, Thailand
- Neyveli Lignite Corporation Ltd, - India
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- Savvy Resources Ltd - HongKong
- Banpu Public Company Limited - Thailand
- Barasentosa Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Coal Council - USA
- Africa Commodities Group - South Africa
- Mjunction Services Limited - India
- Merrill Lynch Commodities Europe
- OPG Power Generation Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Planning Commission, India
- Salva Resources Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Vedanta Resources Plc - India
- Meralco Power Generation, Philippines
- Independent Power Producers Association of India
- Semirara Mining and Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMC Global Power, Philippines
- Leighton Contractors Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Makarim & Taira - Indonesia
- Ind-Barath Power Infra Limited - India
- ASAPP Information Group - India
- Rio Tinto Coal - Australia
- Indian Energy Exchange, India
- Edison Trading Spa - Italy
- Straits Asia Resources Limited - Singapore
- Commonwealth Bank - Australia
- European Bulk Services B.V. - Netherlands
- Attock Cement Pakistan Limited
- TNB Fuel Sdn Bhd - Malaysia
- Manunggal Multi Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Globalindo Alam Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Altura Mining Limited, Indonesia
- Sree Jayajothi Cements Limited - India
- International Coal Ventures Pvt Ltd - India
- Deloitte Consulting - India
- Vizag Seaport Private Limited - India
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Kumho Petrochemical, South Korea
- Mintek Dendrill Indonesia
- Xindia Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Jorong Barutama Greston.PT - Indonesia
- Australian Commodity Traders Exchange
- Asmin Koalindo Tuhup - Indonesia
- Power Finance Corporation Ltd., India
- Indo Tambangraya Megah - Indonesia
- Ministry of Finance - Indonesia
- Georgia Ports Authority, United States
- Tata Chemicals Ltd - India
- Latin American Coal - Colombia
- Jaiprakash Power Ventures ltd
- Orica Australia Pty. Ltd.
- Indogreen Group - Indonesia
- Sarangani Energy Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- SMG Consultants - Indonesia
- Price Waterhouse Coopers - Russia
- Mercuria Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Grasim Industreis Ltd - India
- Thai Mozambique Logistica
- Coastal Gujarat Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Malabar Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- LBH Netherlands Bv - Netherlands
- Bayan Resources Tbk. - Indonesia
- Orica Mining Services - Indonesia
- Tamil Nadu electricity Board
- Port Waratah Coal Services - Australia
- MS Steel International - UAE
- Interocean Group of Companies - India
- IEA Clean Coal Centre - UK
- Kalimantan Lumbung Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Economic Council, Georgia
- Samtan Co., Ltd - South Korea
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CNBM International Corporation - China
- Indian Oil Corporation Limited
- Renaissance Capital - South Africa
- Standard Chartered Bank - UAE
- TeaM Sual Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Star Paper Mills Limited - India
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- Wilmar Investment Holdings
- PetroVietnam Power Coal Import and Supply Company
- Intertek Mineral Services - Indonesia
- San Jose City I Power Corp, Philippines
- Bulk Trading Sa - Switzerland
- Bangladesh Power Developement Board
- Karaikal Port Pvt Ltd - India
- Energy Development Corp, Philippines
- VISA Power Limited - India
- Dalmia Cement Bharat India
- Directorate Of Revenue Intelligence - India
- Videocon Industries ltd - India
- Therma Luzon, Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Central Java Power - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kaltim Prima Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Coalindo Energy - Indonesia
- Sakthi Sugars Limited - India
- Heidelberg Cement - Germany
- Mercator Lines Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Eastern Energy - Thailand
- Sojitz Corporation - Japan
- The Treasury - Australian Government
- Larsen & Toubro Limited - India
- PowerSource Philippines DevCo
- Borneo Indobara - Indonesia
- Ministry of Mines - Canada
- Electricity Generating Authority of Thailand
- Medco Energi Mining Internasional
- Electricity Authority, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Sindya Power Generating Company Private Ltd
- Bharathi Cement Corporation - India
- Kepco SPC Power Corporation, Philippines
- Indika Energy - Indonesia
- Coal and Oil Company - UAE
- Parry Sugars Refinery, India
- Lanco Infratech Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Madhucon Powers Ltd - India
- Bhushan Steel Limited - India
- Pendopo Energi Batubara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Minerals Council of Australia
- Uttam Galva Steels Limited - India
- Semirara Mining Corp, Philippines
- Simpson Spence & Young - Indonesia
- Global Business Power Corporation, Philippines
- Energy Link Ltd, New Zealand
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