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