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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, 01 February 13
HANDY - FLAT; PANAMAX - FLAT TO WEAK; CAPESIZE - WEAK
Handy
The Atlantic market remained stable with no significant movement in rates. Rates from USG to FEast were around USD 17k and Black sea to Feast ...
Thursday, 31 January 13
DRY BULK RATES ON A FALLING PATTERN DUE TO ADVERSE WEATHER CONDITIONS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The seasonal factor has emerged as the latest catalyst in determining the course of the dry bulk market, as the floods in eastern Australia, the big ...
Thursday, 31 January 13
NEWCASTLE PORT SHIPPED 2.70 MMT OF COAL W/E 28 JANUARY 2013
COALspot.com - Newcastle port in Australia has loaded 2,703,921 MT of thermal and coking coal for week ended 0700 hours 28 January 2013, Newca ...
Thursday, 31 January 13
MMTC TO IMPORT 2.68 MMT OF COAL FOR ARAVALI POWER CORPORATION LTD
COALspot.com: The tender floated by MMTC on behalf of Aravali Power Corporation Ltd, a Joint venture between NTPC and State of Haryana for supply of ...
Wednesday, 30 January 13
TNPL TO SECURE 300K MT OF IMPORTED COAL SUPPLIES AT US$ 75.95 PMT FOR MARCH - AUGUST 2013 DELIVERY
COALspot.com – Chennai based Coastal Energy Private Limited (C&O Group of companies) offered lowest price of US$ 75.95 per met ...
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- European Bulk Services B.V. - Netherlands
- Meenaskhi Energy Private Limited - India
- Commonwealth Bank - Australia
- Ind-Barath Power Infra Limited - India
- CNBM International Corporation - China
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- Kaltim Prima Coal - Indonesia
- Meralco Power Generation, Philippines
- Gujarat Sidhee Cement - India
- Larsen & Toubro Limited - India
- Barasentosa Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Kobexindo Tractors - Indoneisa
- Indian Energy Exchange, India
- Asmin Koalindo Tuhup - Indonesia
- Sree Jayajothi Cements Limited - India
- Ministry of Mines - Canada
- Medco Energi Mining Internasional
- TeaM Sual Corporation - Philippines
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Attock Cement Pakistan Limited
- South Luzon Thermal Energy Corporation
- Vedanta Resources Plc - India
- Coal and Oil Company - UAE
- Grasim Industreis Ltd - India
- Energy Development Corp, Philippines
- Banpu Public Company Limited - Thailand
- Ceylon Electricity Board - Sri Lanka
- Indika Energy - Indonesia
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- Indogreen Group - Indonesia
- The Treasury - Australian Government
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Java Power - Indonesia
- Riau Bara Harum - Indonesia
- Agrawal Coal Company - India
- Bulk Trading Sa - Switzerland
- Siam City Cement - Thailand
- Xindia Steels Limited - India
- Jaiprakash Power Ventures ltd
- Alfred C Toepfer International GmbH - Germany
- ICICI Bank Limited - India
- Timah Investasi Mineral - Indoneisa
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- Essar Steel Hazira Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- GMR Energy Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Minerals Council of Australia
- Savvy Resources Ltd - HongKong
- Wilmar Investment Holdings
- Lanco Infratech Ltd - India
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- Star Paper Mills Limited - India
- Australian Coal Association
- Electricity Generating Authority of Thailand
- Baramulti Group, Indonesia
- PNOC Exploration Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Rio Tinto Coal - Australia
- Pendopo Energi Batubara - Indonesia
- Simpson Spence & Young - Indonesia
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- Kideco Jaya Agung - Indonesia
- Sakthi Sugars Limited - India
- Gujarat Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bangladesh Power Developement Board
- Aditya Birla Group - India
- Central Electricity Authority - India
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Latin American Coal - Colombia
- Petrochimia International Co. Ltd.- Taiwan
- Mintek Dendrill Indonesia
- Planning Commission, India
- ASAPP Information Group - India
- Aboitiz Power Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Ambuja Cements Ltd - India
- Mercator Lines Limited - India
- White Energy Company Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Tata Chemicals Ltd - India
- Ministry of Transport, Egypt
- IHS Mccloskey Coal Group - USA
- Indian Oil Corporation Limited
- Miang Besar Coal Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Orica Mining Services - Indonesia
- Toyota Tsusho Corporation, Japan
- Manunggal Multi Energi - Indonesia
- Oldendorff Carriers - Singapore
- Independent Power Producers Association of India
- Sindya Power Generating Company Private Ltd
- Maheswari Brothers Coal Limited - India
- Economic Council, Georgia
- Thiess Contractors Indonesia
- Directorate Of Revenue Intelligence - India
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- Madhucon Powers Ltd - India
- Dalmia Cement Bharat India
- Coastal Gujarat Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- CIMB Investment Bank - Malaysia
- Renaissance Capital - South Africa
- AsiaOL BioFuels Corp., Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Antam Resourcindo - Indonesia
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Coal Council - USA
- Heidelberg Cement - Germany
- Kapuas Tunggal Persada - Indonesia
- Salva Resources Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Kartika Selabumi Mining - Indonesia
- Wood Mackenzie - Singapore
- Vizag Seaport Private Limited - India
- Metalloyd Limited - United Kingdom
- LBH Netherlands Bv - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Chamber of Mines of South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Tamil Nadu electricity Board
- Krishnapatnam Port Company Ltd. - India
- Ministry of Finance - Indonesia
- Goldman Sachs - Singapore
- Makarim & Taira - Indonesia
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Altura Mining Limited, Indonesia
- Globalindo Alam Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Eastern Energy - Thailand
- OPG Power Generation Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- McConnell Dowell - Australia
- Posco Energy - South Korea
- IEA Clean Coal Centre - UK
- Bukit Asam (Persero) Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- The University of Queensland
- International Coal Ventures Pvt Ltd - India
- VISA Power Limited - India
- Karaikal Port Pvt Ltd - India
- India Bulls Power Limited - India
- Price Waterhouse Coopers - Russia
- London Commodity Brokers - England
- Parliament of New Zealand
- SN Aboitiz Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sical Logistics Limited - India
- Merrill Lynch Commodities Europe
- Maharashtra Electricity Regulatory Commission - India
- Bhushan Steel Limited - India
- Mercuria Energy - Indonesia
- MS Steel International - UAE
- Borneo Indobara - Indonesia
- Africa Commodities Group - South Africa
- Malabar Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Global Business Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- Kalimantan Lumbung Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bayan Resources Tbk. - Indonesia
- Deloitte Consulting - India
- Leighton Contractors Pty Ltd - Australia
- Georgia Ports Authority, United States
- Therma Luzon, Inc, Philippines
- GVK Power & Infra Limited - India
- Semirara Mining Corp, Philippines
- Samtan Co., Ltd - South Korea
- Bhatia International Limited - India
- PowerSource Philippines DevCo
- Romanian Commodities Exchange
- Parry Sugars Refinery, India
- Carbofer General Trading SA - India
- Semirara Mining and Power Corporation, Philippines
- SMC Global Power, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Mjunction Services Limited - India
- Standard Chartered Bank - UAE
- Sinarmas Energy and Mining - Indonesia
- Bharathi Cement Corporation - India
- Holcim Trading Pte Ltd - Singapore
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