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