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