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