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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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- Latin American Coal - Colombia
- Jaiprakash Power Ventures ltd
- Karbindo Abesyapradhi - Indoneisa
- Thai Mozambique Logistica
- Carbofer General Trading SA - India
- ICICI Bank Limited - India
- Directorate Of Revenue Intelligence - India
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- Marubeni Corporation - India
- Eastern Energy - Thailand
- Bulk Trading Sa - Switzerland
- Siam City Cement - Thailand
- Petron Corporation, Philippines
- Bhushan Steel Limited - India
- Singapore Mercantile Exchange
- Global Green Power PLC Corporation, Philippines
- Energy Development Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Cement Manufacturers Association - India
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- GVK Power & Infra Limited - India
- TeaM Sual Corporation - Philippines
- Grasim Industreis Ltd - India
- GMR Energy Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Essar Steel Hazira Ltd - India
- Aditya Birla Group - India
- Holcim Trading Pte Ltd - Singapore
- Coastal Gujarat Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Riau Bara Harum - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mjunction Services Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kobexindo Tractors - Indoneisa
- San Jose City I Power Corp, Philippines
- Attock Cement Pakistan Limited
- Planning Commission, India
- Tata Chemicals Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coal and Oil Company - UAE
- Karaikal Port Pvt Ltd - India
- Anglo American - United Kingdom
- Larsen & Toubro Limited - India
- Billiton Holdings Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- SMC Global Power, Philippines
- Electricity Generating Authority of Thailand
- Semirara Mining and Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Sakthi Sugars Limited - India
- Kideco Jaya Agung - Indonesia
- Parliament of New Zealand
- Vedanta Resources Plc - India
- Goldman Sachs - Singapore
- Coalindo Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bhatia International Limited - India
- GAC Shipping (India) Pvt Ltd
- Miang Besar Coal Terminal - Indonesia
- Sical Logistics Limited - India
- South Luzon Thermal Energy Corporation
- Sinarmas Energy and Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Minerals Council of Australia
- Toyota Tsusho Corporation, Japan
- Heidelberg Cement - Germany
- London Commodity Brokers - England
- LBH Netherlands Bv - Netherlands
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- Alfred C Toepfer International GmbH - Germany
- Bukit Makmur.PT - Indonesia
- Wilmar Investment Holdings
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- VISA Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Deloitte Consulting - India
- OPG Power Generation Pvt Ltd - India
- Medco Energi Mining Internasional
- Central Java Power - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- PTC India Limited - India
- Port Waratah Coal Services - Australia
- Renaissance Capital - South Africa
- Kartika Selabumi Mining - Indonesia
- India Bulls Power Limited - India
- Kumho Petrochemical, South Korea
- The State Trading Corporation of India Ltd
- Economic Council, Georgia
- SN Aboitiz Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Kepco SPC Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Dalmia Cement Bharat India
- Makarim & Taira - Indonesia
- Rio Tinto Coal - Australia
- Simpson Spence & Young - Indonesia
- Independent Power Producers Association of India
- Indian Energy Exchange, India
- Formosa Plastics Group - Taiwan
- Altura Mining Limited, Indonesia
- IEA Clean Coal Centre - UK
- Therma Luzon, Inc, Philippines
- Indika Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Merrill Lynch Commodities Europe
- Parry Sugars Refinery, India
- IHS Mccloskey Coal Group - USA
- Lanco Infratech Ltd - India
- Wood Mackenzie - Singapore
- Rashtriya Ispat Nigam Limited - India
- Indo Tambangraya Megah - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Trasteel International SA, Italy
- Australian Commodity Traders Exchange
- Bhoruka Overseas - Indonesia
- Energy Link Ltd, New Zealand
- McConnell Dowell - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Africa Commodities Group - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Borneo Indobara - Indonesia
- Sarangani Energy Corporation, Philippines
- The University of Queensland
- Gujarat Mineral Development Corp Ltd - India
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Xindia Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Electricity Authority, New Zealand
- Kapuas Tunggal Persada - Indonesia
- CIMB Investment Bank - Malaysia
- Global Business Power Corporation, Philippines
- Meralco Power Generation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Posco Energy - South Korea
- Indonesian Coal Mining Association
- Chamber of Mines of South Africa
- ASAPP Information Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Barasentosa Lestari - Indonesia
- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kaltim Prima Coal - Indonesia
- Malabar Cements Ltd - India
- Agrawal Coal Company - India
- Iligan Light & Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Star Paper Mills Limited - India
- Sindya Power Generating Company Private Ltd
- Intertek Mineral Services - Indonesia
- Orica Mining Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Uttam Galva Steels Limited - India
- Central Electricity Authority - India
- New Zealand Coal & Carbon
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Transport, Egypt
- Mercuria Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Edison Trading Spa - Italy
- Maharashtra Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Chettinad Cement Corporation Ltd - India
- Savvy Resources Ltd - HongKong
- Eastern Coal Council - USA
- Ind-Barath Power Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- Georgia Ports Authority, United States
- Mintek Dendrill Indonesia
- Bangladesh Power Developement Board
- Ambuja Cements Ltd - India
- MS Steel International - UAE
- Australian Coal Association
- Indian Oil Corporation Limited
- The Treasury - Australian Government
- Indogreen Group - Indonesia
- Siam City Cement PLC, Thailand
- Ministry of Finance - Indonesia
- White Energy Company Limited
- Sojitz Corporation - Japan
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Krishnapatnam Port Company Ltd. - India
- Oldendorff Carriers - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Baramulti Group, Indonesia
- Binh Thuan Hamico - Vietnam
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- Price Waterhouse Coopers - Russia
- Romanian Commodities Exchange
- Semirara Mining Corp, Philippines
- Power Finance Corporation Ltd., India
- Ministry of Mines - Canada
- Vijayanagar Sugar Pvt Ltd - India
- Madhucon Powers Ltd - India
- Vizag Seaport Private Limited - India
- Antam Resourcindo - Indonesia
- Tamil Nadu electricity Board
- PetroVietnam Power Coal Import and Supply Company
- Thiess Contractors Indonesia
- Commonwealth Bank - Australia
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