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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, 08 March 13
DRY BULK MARKET ON A RISING TREND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has continued its rising pattern set after China opened up again for business, following the Asian New Year Holidays. As a resul ...
Thursday, 07 March 13
PANAMAX : POSITIVE TREND; CAPESIZE : GRADUALLY SLIDE - FEARNLEYS AS
Handy
The Atlantic saw more cargoes than last week and rates ticking upwards. The USG-Feast was at USD 22k and Black sea-feast was at USD 12k. The ...
Tuesday, 05 March 13
NEWCASTLE PORT SHIPPED 20.77 PERCENT MORE COAL W/E 4 MARCH 2013
COALspot.com - Newcastle port in Australia has loaded 2,631,562 MT of thermal and coking coal for a week ended 0700 hours 4 March 2013, Newcas ...
Sunday, 03 March 13
INDONESIAN THERMAL COAL SWAPS; CHINA CONTRACTS FALL W-O-W
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q2’ 2013 delivery has lost 0.75 percent and CFR South China coal shipment&nbs ...
Sunday, 03 March 13
FREIGHT MARKET FROM INDONESIA EXPECTED TO BE FIRM - VISTAAR
COALspot.com – The freight market has been fairly firm this week except for cape size index.
The BDI was up by 4.64 points closing at 776 p ...
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- Coal and Oil Company - UAE
- Mjunction Services Limited - India
- Binh Thuan Hamico - Vietnam
- Sarangani Energy Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Neyveli Lignite Corporation Ltd, - India
- Wilmar Investment Holdings
- PowerSource Philippines DevCo
- The State Trading Corporation of India Ltd
- Vizag Seaport Private Limited - India
- Wood Mackenzie - Singapore
- Dalmia Cement Bharat India
- ICICI Bank Limited - India
- Simpson Spence & Young - Indonesia
- Altura Mining Limited, Indonesia
- Standard Chartered Bank - UAE
- Kohat Cement Company Ltd. - Pakistan
- Global Green Power PLC Corporation, Philippines
- Riau Bara Harum - Indonesia
- Indian Energy Exchange, India
- Intertek Mineral Services - Indonesia
- Marubeni Corporation - India
- Bhoruka Overseas - Indonesia
- Videocon Industries ltd - India
- Eastern Energy - Thailand
- Eastern Coal Council - USA
- Price Waterhouse Coopers - Russia
- Semirara Mining Corp, Philippines
- Africa Commodities Group - South Africa
- Formosa Plastics Group - Taiwan
- Global Business Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- Chamber of Mines of South Africa
- Electricity Authority, New Zealand
- Power Finance Corporation Ltd., India
- Bhushan Steel Limited - India
- Edison Trading Spa - Italy
- Timah Investasi Mineral - Indoneisa
- Coastal Gujarat Power Limited - India
- Economic Council, Georgia
- South Luzon Thermal Energy Corporation
- Central Electricity Authority - India
- Essar Steel Hazira Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Antam Resourcindo - Indonesia
- Bukit Makmur.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- SMC Global Power, Philippines
- San Jose City I Power Corp, Philippines
- TeaM Sual Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Independent Power Producers Association of India
- PetroVietnam Power Coal Import and Supply Company
- Makarim & Taira - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Holcim Trading Pte Ltd - Singapore
- Carbofer General Trading SA - India
- Mercuria Energy - Indonesia
- IEA Clean Coal Centre - UK
- Vedanta Resources Plc - India
- Electricity Generating Authority of Thailand
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Parry Sugars Refinery, India
- Medco Energi Mining Internasional
- GMR Energy Limited - India
- Singapore Mercantile Exchange
- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- Orica Australia Pty. Ltd.
- White Energy Company Limited
- Aditya Birla Group - India
- International Coal Ventures Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- Planning Commission, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- MS Steel International - UAE
- Ambuja Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Uttam Galva Steels Limited - India
- Goldman Sachs - Singapore
- Directorate General of MIneral and Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Cement Manufacturers Association - India
- Sojitz Corporation - Japan
- Baramulti Group, Indonesia
- Kumho Petrochemical, South Korea
- Interocean Group of Companies - India
- AsiaOL BioFuels Corp., Philippines
- Indika Energy - Indonesia
- Thiess Contractors Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Larsen & Toubro Limited - India
- Gujarat Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Renaissance Capital - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ASAPP Information Group - India
- Siam City Cement - Thailand
- Kepco SPC Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Toyota Tsusho Corporation, Japan
- Sical Logistics Limited - India
- Minerals Council of Australia
- Jaiprakash Power Ventures ltd
- Energy Development Corp, Philippines
- Heidelberg Cement - Germany
- PNOC Exploration Corporation - Philippines
- Ministry of Mines - Canada
- Bayan Resources Tbk. - Indonesia
- Ceylon Electricity Board - Sri Lanka
- LBH Netherlands Bv - Netherlands
- CIMB Investment Bank - Malaysia
- Barasentosa Lestari - Indonesia
- McConnell Dowell - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- Straits Asia Resources Limited - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- PTC India Limited - India
- Agrawal Coal Company - India
- Central Java Power - Indonesia
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- Bharathi Cement Corporation - India
- Lanco Infratech Ltd - India
- Posco Energy - South Korea
- Indo Tambangraya Megah - Indonesia
- GAC Shipping (India) Pvt Ltd
- Kaltim Prima Coal - Indonesia
- VISA Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Indian Oil Corporation Limited
- GN Power Mariveles Coal Plant, Philippines
- CNBM International Corporation - China
- Vijayanagar Sugar Pvt Ltd - India
- Mintek Dendrill Indonesia
- Indogreen Group - Indonesia
- GVK Power & Infra Limited - India
- Australian Coal Association
- IHS Mccloskey Coal Group - USA
- Xindia Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Bukit Baiduri Energy - Indonesia
- SMG Consultants - Indonesia
- Chettinad Cement Corporation Ltd - India
- Siam City Cement PLC, Thailand
- Sree Jayajothi Cements Limited - India
- Cigading International Bulk Terminal - Indonesia
- Romanian Commodities Exchange
- Merrill Lynch Commodities Europe
- Petron Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Ministry of Transport, Egypt
- Bhatia International Limited - India
- Deloitte Consulting - India
- Commonwealth Bank - Australia
- Gujarat Mineral Development Corp Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Maheswari Brothers Coal Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- OPG Power Generation Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Samtan Co., Ltd - South Korea
- Anglo American - United Kingdom
- Ministry of Finance - Indonesia
- Orica Mining Services - Indonesia
- Energy Link Ltd, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Georgia Ports Authority, United States
- Mercator Lines Limited - India
- Indonesian Coal Mining Association
- Australian Commodity Traders Exchange
- Rashtriya Ispat Nigam Limited - India
- Kobexindo Tractors - Indoneisa
- Bulk Trading Sa - Switzerland
- Gujarat Sidhee Cement - India
- The University of Queensland
- Oldendorff Carriers - Singapore
- Malabar Cements Ltd - India
- Latin American Coal - Colombia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- Metalloyd Limited - United Kingdom
- Star Paper Mills Limited - India
- India Bulls Power Limited - India
- Sakthi Sugars Limited - India
- Tamil Nadu electricity Board
- Coalindo Energy - Indonesia
- Bangladesh Power Developement Board
- New Zealand Coal & Carbon
- Parliament of New Zealand
- Manunggal Multi Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Rio Tinto Coal - Australia
- Krishnapatnam Port Company Ltd. - India
- Aboitiz Power Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Tata Chemicals Ltd - India
- Grasim Industreis Ltd - India
- Miang Besar Coal Terminal - Indonesia
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