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