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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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Tuesday, 12 February 13
GOVERNMENT DECLARED INDONESIAN THERMAL COAL PRICE INCHES UP IN FEBRUARY
COALspot.com - The Indonesian government has declared bench mark price for coal has moved upwards in February 2013.
The monthly coal refere ...
Monday, 11 February 13
NEWCASTLE PORT SHIPPED 23.01 PERCENT MORE COAL W-O-W
COALspot.com - Newcastle port in Australia has loaded 2,967,761 MT of thermal and coking coal for week ended 0700 hours 11 February 2013, Newc ...
Sunday, 10 February 13
INDONESIA SUB-BIT SWAPS: "UP" - CFR SOUTH CHINA SWAPS: "DOWN"
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q2’ 2013 delivery has gained 0.72 percent W-O-W and CFR South China coal shipme ...
Sunday, 10 February 13
DRY BULK OVERSUPPLY OF TONNAGE SEEN WANING IN THE COMING MONTHS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
It seems that the tide could be shifting in the dry bulk market, in terms of tonnage oversupply, according to the latest data figures. This could ex ...
Sunday, 10 February 13
HIGHER BUNKER PRICE PUSHES SEA FREIGHTS FIRM - REDDY
COALspot.com - The freight market was soft and all at same levels with Chinese year holidays next week.
The BDI was slightly down by 0.27 pct ad ...
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- Mjunction Services Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Wilmar Investment Holdings
- White Energy Company Limited
- Carbofer General Trading SA - India
- Kepco SPC Power Corporation, Philippines
- Bangladesh Power Developement Board
- Salva Resources Pvt Ltd - India
- Sical Logistics Limited - India
- Port Waratah Coal Services - Australia
- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- London Commodity Brokers - England
- Therma Luzon, Inc, Philippines
- Ambuja Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Cement Manufacturers Association - India
- Intertek Mineral Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Romanian Commodities Exchange
- Deloitte Consulting - India
- Kumho Petrochemical, South Korea
- Thai Mozambique Logistica
- Australian Commodity Traders Exchange
- Energy Link Ltd, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Star Paper Mills Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Eastern Coal Council - USA
- Global Green Power PLC Corporation, Philippines
- CNBM International Corporation - China
- Cigading International Bulk Terminal - Indonesia
- Coalindo Energy - Indonesia
- The University of Queensland
- Global Business Power Corporation, Philippines
- Medco Energi Mining Internasional
- Grasim Industreis Ltd - India
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- Power Finance Corporation Ltd., India
- Electricity Generating Authority of Thailand
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Eastern Energy - Thailand
- Videocon Industries ltd - India
- India Bulls Power Limited - India
- Jindal Steel & Power Ltd - India
- Attock Cement Pakistan Limited
- Barasentosa Lestari - Indonesia
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
- Independent Power Producers Association of India
- Aboitiz Power Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Pendopo Energi Batubara - Indonesia
- Semirara Mining Corp, Philippines
- IHS Mccloskey Coal Group - USA
- New Zealand Coal & Carbon
- Africa Commodities Group - South Africa
- Makarim & Taira - Indonesia
- Posco Energy - South Korea
- Tata Chemicals Ltd - India
- Ministry of Finance - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- SMC Global Power, Philippines
- Maheswari Brothers Coal Limited - India
- South Luzon Thermal Energy Corporation
- Bulk Trading Sa - Switzerland
- Economic Council, Georgia
- Timah Investasi Mineral - Indoneisa
- Ministry of Transport, Egypt
- Directorate Of Revenue Intelligence - India
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- Chettinad Cement Corporation Ltd - India
- Tamil Nadu electricity Board
- Mercuria Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Global Coal Blending Company Limited - Australia
- Orica Australia Pty. Ltd.
- Commonwealth Bank - Australia
- Malabar Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Straits Asia Resources Limited - Singapore
- The State Trading Corporation of India Ltd
- Borneo Indobara - Indonesia
- Banpu Public Company Limited - Thailand
- Bharathi Cement Corporation - India
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- TeaM Sual Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Central Java Power - Indonesia
- OPG Power Generation Pvt Ltd - India
- Energy Development Corp, Philippines
- Meralco Power Generation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Uttam Galva Steels Limited - India
- Georgia Ports Authority, United States
- Krishnapatnam Port Company Ltd. - India
- IEA Clean Coal Centre - UK
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement - Thailand
- PTC India Limited - India
- Kideco Jaya Agung - Indonesia
- Marubeni Corporation - India
- Central Electricity Authority - India
- LBH Netherlands Bv - Netherlands
- SN Aboitiz Power Inc, Philippines
- Indian Oil Corporation Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Baiduri Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Baramulti Group, Indonesia
- Ministry of Mines - Canada
- Coal and Oil Company - UAE
- Gujarat Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Samtan Co., Ltd - South Korea
- The Treasury - Australian Government
- Edison Trading Spa - Italy
- Kohat Cement Company Ltd. - Pakistan
- Miang Besar Coal Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Siam City Cement PLC, Thailand
- Indo Tambangraya Megah - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Interocean Group of Companies - India
- Minerals Council of Australia
- Kartika Selabumi Mining - Indonesia
- Planning Commission, India
- Heidelberg Cement - Germany
- Vizag Seaport Private Limited - India
- Savvy Resources Ltd - HongKong
- Larsen & Toubro Limited - India
- Sakthi Sugars Limited - India
- Australian Coal Association
- GVK Power & Infra Limited - India
- Bhushan Steel Limited - India
- MS Steel International - UAE
- Alfred C Toepfer International GmbH - Germany
- Bukit Makmur.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Trasteel International SA, Italy
- PNOC Exploration Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Indogreen Group - Indonesia
- PowerSource Philippines DevCo
- Anglo American - United Kingdom
- Altura Mining Limited, Indonesia
- Thiess Contractors Indonesia
- Vedanta Resources Plc - India
- ICICI Bank Limited - India
- Goldman Sachs - Singapore
- Bhoruka Overseas - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Toyota Tsusho Corporation, Japan
- GAC Shipping (India) Pvt Ltd
- Meenaskhi Energy Private Limited - India
- Mintek Dendrill Indonesia
- Formosa Plastics Group - Taiwan
- McConnell Dowell - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Energy Exchange, India
- Agrawal Coal Company - India
- Essar Steel Hazira Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indika Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Madhucon Powers Ltd - India
- Petron Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- VISA Power Limited - India
- Aditya Birla Group - India
- GN Power Mariveles Coal Plant, Philippines
- Rashtriya Ispat Nigam Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Lanco Infratech Ltd - India
- Indonesian Coal Mining Association
- AsiaOL BioFuels Corp., Philippines
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- Renaissance Capital - South Africa
- San Jose City I Power Corp, Philippines
- ASAPP Information Group - India
- Singapore Mercantile Exchange
- Antam Resourcindo - Indonesia
- Merrill Lynch Commodities Europe
- Bahari Cakrawala Sebuku - Indonesia
- Oldendorff Carriers - Singapore
- Sindya Power Generating Company Private Ltd
- Orica Mining Services - Indonesia
- Parliament of New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Latin American Coal - Colombia
- European Bulk Services B.V. - Netherlands
- Mercator Lines Limited - India
- Dalmia Cement Bharat India
- Rio Tinto Coal - Australia
- Jorong Barutama Greston.PT - Indonesia
- Bhatia International Limited - India
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