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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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Friday, 03 May 13
SHIP OWNERS ARE INVESTING HEAVILY IN DRY BULK CARRIER NEWBUILDINGS ONCE MORE: IS THERE ANY RATIONALE? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite the fact that the dry bulk market remains heavily oversupplied and just as the orderbook of newbuildings had began to shrink, it seems that sh ...
Wednesday, 01 May 13
NEWCASTLE PORT SHIPPED 23.14 PER CENT MORE COAL WEEK ON WEEK
COALspot.com - Newcastle port in Australia has loaded 2,997,729 tons of thermal and coking coal for week ended 0700 hours 29 April 2013, Newca ...
Tuesday, 30 April 13
KATINGAN RIA THERMAL COAL TO START PRODUCTION FROM EARLY 2014
COALspot.com - Realm Resources Ltd. (ASX: RRP) has announced the completion of the Feasibility Study for its 51% owned Katingan Ria thermal co ...
Monday, 29 April 13
FIRST TRADES OF SGX API 8 CFR SOUTH CHINA COAL SWAP
COALspot.com - The SGX API 8 CFR South China Coal Swap went live for clearing on SGX-DC today with a total volume of 25,000 metric tonnes (25 lots). ...
Sunday, 28 April 13
SUB BIT INDONESIA COAL & CFR SOUTH CHINA COAL SWAPS STAY POSITIVE
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average May 2013 delivery has gained 0.34 percent and CFR South China coal shipment gai ...
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- Samtan Co., Ltd - South Korea
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Trasteel International SA, Italy
- Indo Tambangraya Megah - Indonesia
- Power Finance Corporation Ltd., India
- Bharathi Cement Corporation - India
- Orica Australia Pty. Ltd.
- Semirara Mining Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Medco Energi Mining Internasional
- Australian Commodity Traders Exchange
- Manunggal Multi Energi - Indonesia
- Wilmar Investment Holdings
- Orica Mining Services - Indonesia
- Eastern Coal Council - USA
- Globalindo Alam Lestari - Indonesia
- Barasentosa Lestari - Indonesia
- Marubeni Corporation - India
- Kaltim Prima Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bangladesh Power Developement Board
- Meralco Power Generation, Philippines
- San Jose City I Power Corp, Philippines
- VISA Power Limited - India
- Aboitiz Power Corporation - Philippines
- Wood Mackenzie - Singapore
- Australian Coal Association
- Mercator Lines Limited - India
- Miang Besar Coal Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Ministry of Transport, Egypt
- Pendopo Energi Batubara - Indonesia
- Edison Trading Spa - Italy
- Formosa Plastics Group - Taiwan
- London Commodity Brokers - England
- Mjunction Services Limited - India
- Billiton Holdings Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- ICICI Bank Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- Agrawal Coal Company - India
- Banpu Public Company Limited - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Thai Mozambique Logistica
- Bulk Trading Sa - Switzerland
- Coalindo Energy - Indonesia
- Kumho Petrochemical, South Korea
- GAC Shipping (India) Pvt Ltd
- Maharashtra Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- PowerSource Philippines DevCo
- Posco Energy - South Korea
- Timah Investasi Mineral - Indoneisa
- TeaM Sual Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Indogreen Group - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Sree Jayajothi Cements Limited - India
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- Electricity Authority, New Zealand
- Bukit Baiduri Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Karaikal Port Pvt Ltd - India
- Indonesian Coal Mining Association
- Global Coal Blending Company Limited - Australia
- Xindia Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Malabar Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- Latin American Coal - Colombia
- Gujarat Sidhee Cement - India
- Commonwealth Bank - Australia
- Sakthi Sugars Limited - India
- Carbofer General Trading SA - India
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Merrill Lynch Commodities Europe
- Maheswari Brothers Coal Limited - India
- South Luzon Thermal Energy Corporation
- Renaissance Capital - South Africa
- McConnell Dowell - Australia
- Georgia Ports Authority, United States
- Vijayanagar Sugar Pvt Ltd - India
- The Treasury - Australian Government
- Gujarat Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ambuja Cements Ltd - India
- Vizag Seaport Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Baramulti Group, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Port Waratah Coal Services - Australia
- Chamber of Mines of South Africa
- Economic Council, Georgia
- Kideco Jaya Agung - Indonesia
- Eastern Energy - Thailand
- Alfred C Toepfer International GmbH - Germany
- Jindal Steel & Power Ltd - India
- Global Business Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Interocean Group of Companies - India
- Rio Tinto Coal - Australia
- CNBM International Corporation - China
- Uttam Galva Steels Limited - India
- Salva Resources Pvt Ltd - India
- Ministry of Mines - Canada
- Aditya Birla Group - India
- Indika Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- Straits Asia Resources Limited - Singapore
- Energy Development Corp, Philippines
- GVK Power & Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Mercuria Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Africa Commodities Group - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Central Electricity Authority - India
- MS Steel International - UAE
- Singapore Mercantile Exchange
- Cement Manufacturers Association - India
- Gujarat Mineral Development Corp Ltd - India
- Antam Resourcindo - Indonesia
- Goldman Sachs - Singapore
- The University of Queensland
- Meenaskhi Energy Private Limited - India
- Savvy Resources Ltd - HongKong
- Indian Energy Exchange, India
- Rashtriya Ispat Nigam Limited - India
- Dalmia Cement Bharat India
- Ministry of Finance - Indonesia
- SMG Consultants - Indonesia
- Romanian Commodities Exchange
- Star Paper Mills Limited - India
- PTC India Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bhushan Steel Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Coal and Oil Company - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Sical Logistics Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tata Chemicals Ltd - India
- Anglo American - United Kingdom
- European Bulk Services B.V. - Netherlands
- Intertek Mineral Services - Indonesia
- Videocon Industries ltd - India
- Bayan Resources Tbk. - Indonesia
- Simpson Spence & Young - Indonesia
- Therma Luzon, Inc, Philippines
- Madhucon Powers Ltd - India
- Jaiprakash Power Ventures ltd
- Chettinad Cement Corporation Ltd - India
- Energy Link Ltd, New Zealand
- International Coal Ventures Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- IEA Clean Coal Centre - UK
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- LBH Netherlands Bv - Netherlands
- Thiess Contractors Indonesia
- Mintek Dendrill Indonesia
- Essar Steel Hazira Ltd - India
- Minerals Council of Australia
- Heidelberg Cement - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- Borneo Indobara - Indonesia
- Indian Oil Corporation Limited
- White Energy Company Limited
- Oldendorff Carriers - Singapore
- Global Green Power PLC Corporation, Philippines
- India Bulls Power Limited - India
- Bhatia International Limited - India
- Grasim Industreis Ltd - India
- Central Java Power - Indonesia
- Attock Cement Pakistan Limited
- Makarim & Taira - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Standard Chartered Bank - UAE
- Larsen & Toubro Limited - India
- Independent Power Producers Association of India
- Lanco Infratech Ltd - India
- Deloitte Consulting - India
- The State Trading Corporation of India Ltd
- OPG Power Generation Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Planning Commission, India
- Parliament of New Zealand
- ASAPP Information Group - India
- Kohat Cement Company Ltd. - Pakistan
- Sojitz Corporation - Japan
- TNB Fuel Sdn Bhd - Malaysia
- Tamil Nadu electricity Board
- Bukit Makmur.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- GMR Energy Limited - India
- Sindya Power Generating Company Private Ltd
- Parry Sugars Refinery, India
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