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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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Tuesday, 26 March 13
NEWCASTLE PORT SHIPPED 2.39 MMT OF COAL W/E 25 MARCH 2013
COALspot.com - Newcastle port in Australia has loaded 2.396 million tons of thermal and coking coal for week ended 0700 hours 25 March 2013, N ...
Monday, 25 March 13
BUNKER FUELS ARE ABOUT TO GET CLEANER, BUT AT WHAT COST? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The cost of bunkers is nowadays the driving force behind most ship owners' major decisions, with regulations bound to change in many parts of the w ...
Sunday, 24 March 13
THE SUB-BIT INDONESIA'S COAL SWAPS FOR Q2 DELIVERY PRICE LOST 7.47 PERCENT PMT M-O-M
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q2’ 2013 delivery has lost 3.39 percent and CFR South China coal shipment 2.65 ...
Sunday, 24 March 13
FREIGHT MARKETS CONTINUED TO FIRM - VISTAAR
COALspot.com - This freight market continued to remain firm in all segments except for cape index which softened slightly.
The BDI was up by 4.60 ...
Sunday, 24 March 13
DRY BULK MARKET PROSPECTS OFFER ROOM FOR RESTRAINED OPTIMISM SAYS SHIP OWNER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
In its announcement regarding its annual performance, ship owner Frontline offered some useful insight on the future prospects of both the dry bulk ...
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- Toyota Tsusho Corporation, Japan
- Georgia Ports Authority, United States
- Bahari Cakrawala Sebuku - Indonesia
- Bhoruka Overseas - Indonesia
- Power Finance Corporation Ltd., India
- Kumho Petrochemical, South Korea
- Anglo American - United Kingdom
- Jindal Steel & Power Ltd - India
- Indika Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- CNBM International Corporation - China
- Billiton Holdings Pty Ltd - Australia
- Wilmar Investment Holdings
- Madhucon Powers Ltd - India
- Ind-Barath Power Infra Limited - India
- The University of Queensland
- Marubeni Corporation - India
- Uttam Galva Steels Limited - India
- Ministry of Finance - Indonesia
- Kartika Selabumi Mining - Indonesia
- Interocean Group of Companies - India
- Central Java Power - Indonesia
- Bayan Resources Tbk. - Indonesia
- Rio Tinto Coal - Australia
- Cigading International Bulk Terminal - Indonesia
- Malabar Cements Ltd - India
- Tata Chemicals Ltd - India
- Timah Investasi Mineral - Indoneisa
- CIMB Investment Bank - Malaysia
- Ambuja Cements Ltd - India
- Simpson Spence & Young - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bhatia International Limited - India
- Banpu Public Company Limited - Thailand
- Kapuas Tunggal Persada - Indonesia
- London Commodity Brokers - England
- Chettinad Cement Corporation Ltd - India
- The Treasury - Australian Government
- Gujarat Sidhee Cement - India
- Thai Mozambique Logistica
- SMG Consultants - Indonesia
- Parry Sugars Refinery, India
- Commonwealth Bank - Australia
- Indonesian Coal Mining Association
- Ceylon Electricity Board - Sri Lanka
- PTC India Limited - India
- Salva Resources Pvt Ltd - India
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- Economic Council, Georgia
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- TeaM Sual Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Meralco Power Generation, Philippines
- Cement Manufacturers Association - India
- MS Steel International - UAE
- Sakthi Sugars Limited - India
- Thiess Contractors Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Price Waterhouse Coopers - Russia
- Savvy Resources Ltd - HongKong
- Electricity Authority, New Zealand
- Directorate Of Revenue Intelligence - India
- Intertek Mineral Services - Indonesia
- Videocon Industries ltd - India
- Pendopo Energi Batubara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Alfred C Toepfer International GmbH - Germany
- VISA Power Limited - India
- Mintek Dendrill Indonesia
- Edison Trading Spa - Italy
- Globalindo Alam Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Indogreen Group - Indonesia
- Sarangani Energy Corporation, Philippines
- Electricity Generating Authority of Thailand
- AsiaOL BioFuels Corp., Philippines
- Therma Luzon, Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Petron Corporation, Philippines
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Gujarat Mineral Development Corp Ltd - India
- Aditya Birla Group - India
- South Luzon Thermal Energy Corporation
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- Latin American Coal - Colombia
- The State Trading Corporation of India Ltd
- IEA Clean Coal Centre - UK
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- Renaissance Capital - South Africa
- GMR Energy Limited - India
- Coal and Oil Company - UAE
- Posco Energy - South Korea
- Mjunction Services Limited - India
- Sojitz Corporation - Japan
- Indian Oil Corporation Limited
- IHS Mccloskey Coal Group - USA
- Global Green Power PLC Corporation, Philippines
- Borneo Indobara - Indonesia
- Samtan Co., Ltd - South Korea
- Riau Bara Harum - Indonesia
- Merrill Lynch Commodities Europe
- White Energy Company Limited
- Heidelberg Cement - Germany
- Planning Commission, India
- Maheswari Brothers Coal Limited - India
- Lanco Infratech Ltd - India
- Parliament of New Zealand
- Binh Thuan Hamico - Vietnam
- GAC Shipping (India) Pvt Ltd
- Baramulti Group, Indonesia
- Bukit Baiduri Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sree Jayajothi Cements Limited - India
- Sindya Power Generating Company Private Ltd
- Formosa Plastics Group - Taiwan
- Carbofer General Trading SA - India
- PNOC Exploration Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- Meenaskhi Energy Private Limited - India
- Star Paper Mills Limited - India
- Rashtriya Ispat Nigam Limited - India
- Miang Besar Coal Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Romanian Commodities Exchange
- Central Electricity Authority - India
- Energy Development Corp, Philippines
- Siam City Cement PLC, Thailand
- Trasteel International SA, Italy
- Dalmia Cement Bharat India
- Bhushan Steel Limited - India
- Kobexindo Tractors - Indoneisa
- Medco Energi Mining Internasional
- Vizag Seaport Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- SMC Global Power, Philippines
- European Bulk Services B.V. - Netherlands
- Siam City Cement - Thailand
- Singapore Mercantile Exchange
- Goldman Sachs - Singapore
- Barasentosa Lestari - Indonesia
- Vedanta Resources Plc - India
- Orica Mining Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Indian Energy Exchange, India
- Orica Australia Pty. Ltd.
- Eastern Energy - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Maharashtra Electricity Regulatory Commission - India
- Minerals Council of Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coastal Gujarat Power Limited - India
- Global Business Power Corporation, Philippines
- Chamber of Mines of South Africa
- Semirara Mining and Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Eastern Coal Council - USA
- Ministry of Mines - Canada
- Xindia Steels Limited - India
- Africa Commodities Group - South Africa
- Aboitiz Power Corporation - Philippines
- Coalindo Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Attock Cement Pakistan Limited
- Sical Logistics Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Iligan Light & Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Leighton Contractors Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- McConnell Dowell - Australia
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Grasim Industreis Ltd - India
- ICICI Bank Limited - India
- Manunggal Multi Energi - Indonesia
- Bharathi Cement Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tamil Nadu electricity Board
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- Independent Power Producers Association of India
- Makarim & Taira - Indonesia
- SN Aboitiz Power Inc, Philippines
- Mercuria Energy - Indonesia
- Ministry of Transport, Egypt
- Bangladesh Power Developement Board
- New Zealand Coal & Carbon
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Antam Resourcindo - Indonesia
- Kaltim Prima Coal - Indonesia
- San Jose City I Power Corp, Philippines
- India Bulls Power Limited - India
- Essar Steel Hazira Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Australian Coal Association
- International Coal Ventures Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
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