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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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Monday, 15 April 13
SUB - BIT INDONESIA COAL SWAP SHOWS POSITIVE TREND
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q2’ 2013 delivery has gained 2.70 percent and CFR South China coal shipment&nbs ...
Saturday, 13 April 13
THE FREIGHT MARKETS EXPECTED TO HOLD FIRM NEXT WEEK - CAPT. REDDY
COALspot.com - This freight market firmed up this week and all sectors were up except for Supramax index.
The BDI was up by 1.62 pct closing at 8 ...
Friday, 12 April 13
DRY BULK SHIP OWNERS DEVELOPED NEWFOUND APPETITE FOR BULKERS DURING FIRST QUARTER OF 2013 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
It's official; more and more ship owners operating in the dry bulk market appear to have developed a newfound optimism in the market's prospects. ...
Thursday, 11 April 13
HANDY: INDO - INDIA NOW BEEN REPORTED AT APS BASIS AT USD 10K+BB 85K - FEARNLEYS
Handy
The Atlantic markets remain with not many cargoes seen this week. The USG-Feast was at USD 18k and Black Sea-Feast was at USD 12k. The Pacifi ...
Thursday, 11 April 13
AUSTRALIA'S NEWCASTLE PORT SHIPPED 15.96 PERCENT LESS COAL W-O-W
COALspot.com - Newcastle port in Australia has loaded 2,545,914 tons of thermal and coking coal for week ended 0700 hours 8 April 2013, Newcas ...
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- Altura Mining Limited, Indonesia
- Indian Oil Corporation Limited
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- Coal and Oil Company - UAE
- Deloitte Consulting - India
- Banpu Public Company Limited - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GMR Energy Limited - India
- Indika Energy - Indonesia
- Lanco Infratech Ltd - India
- Vedanta Resources Plc - India
- GN Power Mariveles Coal Plant, Philippines
- Madhucon Powers Ltd - India
- Directorate Of Revenue Intelligence - India
- London Commodity Brokers - England
- Australian Coal Association
- Coalindo Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Siam City Cement - Thailand
- Indian Energy Exchange, India
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- GAC Shipping (India) Pvt Ltd
- PNOC Exploration Corporation - Philippines
- Indogreen Group - Indonesia
- SMG Consultants - Indonesia
- European Bulk Services B.V. - Netherlands
- Global Coal Blending Company Limited - Australia
- Kobexindo Tractors - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- SN Aboitiz Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Maheswari Brothers Coal Limited - India
- Straits Asia Resources Limited - Singapore
- Intertek Mineral Services - Indonesia
- New Zealand Coal & Carbon
- Minerals Council of Australia
- Edison Trading Spa - Italy
- Independent Power Producers Association of India
- Pipit Mutiara Jaya. PT, Indonesia
- Aboitiz Power Corporation - Philippines
- Medco Energi Mining Internasional
- Central Java Power - Indonesia
- Australian Commodity Traders Exchange
- Trasteel International SA, Italy
- Kepco SPC Power Corporation, Philippines
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Eastern Coal Council - USA
- Bukit Makmur.PT - Indonesia
- Sakthi Sugars Limited - India
- Mjunction Services Limited - India
- Bhatia International Limited - India
- Sindya Power Generating Company Private Ltd
- Karbindo Abesyapradhi - Indoneisa
- Merrill Lynch Commodities Europe
- Parliament of New Zealand
- The Treasury - Australian Government
- Central Electricity Authority - India
- Binh Thuan Hamico - Vietnam
- McConnell Dowell - Australia
- Ind-Barath Power Infra Limited - India
- Tamil Nadu electricity Board
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- Chettinad Cement Corporation Ltd - India
- Indonesian Coal Mining Association
- Borneo Indobara - Indonesia
- Bangladesh Power Developement Board
- Gujarat Sidhee Cement - India
- Pendopo Energi Batubara - Indonesia
- Bhoruka Overseas - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kumho Petrochemical, South Korea
- Xindia Steels Limited - India
- Ambuja Cements Ltd - India
- Parry Sugars Refinery, India
- Anglo American - United Kingdom
- Simpson Spence & Young - Indonesia
- Power Finance Corporation Ltd., India
- Electricity Generating Authority of Thailand
- Kohat Cement Company Ltd. - Pakistan
- Meralco Power Generation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- San Jose City I Power Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Energy Link Ltd, New Zealand
- Renaissance Capital - South Africa
- Jaiprakash Power Ventures ltd
- Posco Energy - South Korea
- Georgia Ports Authority, United States
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Commonwealth Bank - Australia
- Price Waterhouse Coopers - Russia
- Petrochimia International Co. Ltd.- Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Chamber of Mines of South Africa
- Coastal Gujarat Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Billiton Holdings Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Goldman Sachs - Singapore
- Miang Besar Coal Terminal - Indonesia
- Interocean Group of Companies - India
- Sree Jayajothi Cements Limited - India
- Ministry of Mines - Canada
- Attock Cement Pakistan Limited
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercator Lines Limited - India
- Mintek Dendrill Indonesia
- Agrawal Coal Company - India
- Petron Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- PowerSource Philippines DevCo
- Bahari Cakrawala Sebuku - Indonesia
- Sical Logistics Limited - India
- Energy Development Corp, Philippines
- Singapore Mercantile Exchange
- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Baramulti Group, Indonesia
- International Coal Ventures Pvt Ltd - India
- Electricity Authority, New Zealand
- Leighton Contractors Pty Ltd - Australia
- Eastern Energy - Thailand
- Romanian Commodities Exchange
- Krishnapatnam Port Company Ltd. - India
- SMC Global Power, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- GVK Power & Infra Limited - India
- Sojitz Corporation - Japan
- Orica Australia Pty. Ltd.
- Indo Tambangraya Megah - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bharathi Cement Corporation - India
- ASAPP Information Group - India
- Star Paper Mills Limited - India
- Toyota Tsusho Corporation, Japan
- Sarangani Energy Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Rio Tinto Coal - Australia
- Manunggal Multi Energi - Indonesia
- Planning Commission, India
- CNBM International Corporation - China
- Standard Chartered Bank - UAE
- Globalindo Alam Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Aditya Birla Group - India
- ICICI Bank Limited - India
- India Bulls Power Limited - India
- Africa Commodities Group - South Africa
- Makarim & Taira - Indonesia
- Port Waratah Coal Services - Australia
- Thai Mozambique Logistica
- Rashtriya Ispat Nigam Limited - India
- Antam Resourcindo - Indonesia
- Bulk Trading Sa - Switzerland
- Global Business Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Latin American Coal - Colombia
- Videocon Industries ltd - India
- Tata Chemicals Ltd - India
- Bhushan Steel Limited - India
- The University of Queensland
- Sinarmas Energy and Mining - Indonesia
- Thiess Contractors Indonesia
- OPG Power Generation Pvt Ltd - India
- Uttam Galva Steels Limited - India
- PTC India Limited - India
- Karaikal Port Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Meenaskhi Energy Private Limited - India
- Ministry of Finance - Indonesia
- VISA Power Limited - India
- Savvy Resources Ltd - HongKong
- Economic Council, Georgia
- IEA Clean Coal Centre - UK
- Vizag Seaport Private Limited - India
- Siam City Cement PLC, Thailand
- Marubeni Corporation - India
- Bayan Resources Tbk. - Indonesia
- IHS Mccloskey Coal Group - USA
- CIMB Investment Bank - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The State Trading Corporation of India Ltd
- TeaM Sual Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- LBH Netherlands Bv - Netherlands
- Dalmia Cement Bharat India
- Mercuria Energy - Indonesia
- Wood Mackenzie - Singapore
- Riau Bara Harum - Indonesia
- Orica Mining Services - Indonesia
- MS Steel International - UAE
- Heidelberg Cement - Germany
- White Energy Company Limited
- Kapuas Tunggal Persada - Indonesia
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