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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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Thursday, 24 January 13
INDO - INDIA NOW AT APS $ 8K + BB USD 90000 - FEARNLEYS AS
Handy
The Atlantic market remains stable as supply of tonnage is still in excess of demand. USG- Far east fixed at $18k and CONT-FEAST at $ 11k. Pa ...
Thursday, 24 January 13
DRY BULK MARKET FALLS ON TROPICAL CYCLONE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has been on the downside during the past couple of days, mainly as a result of the tropical storm which forced ports to close do ...
Tuesday, 22 January 13
PORT OF ANTWERP HANDLES 7.0 PERCENT MORE COAL IN 2012 Y-Y
COALspot.com - The port of Antwerp handled 184,134,516 tonnes of freight last year.
This represents a drop of 1.6% compared with 2011, when the v ...
Monday, 21 January 13
NEWCASTLE PORT SHIPPED 10.21 PERCENT LESS COAL W/E 21 JANUARY 2013
COALspot.com - Newcastle port in Australia has loaded 2,804,152 MT of thermal and coking coal for week ended 0700 hours 21 January 2013, Newca ...
Monday, 21 January 13
PANAMAX DRY BULK CARRIERS AND AFRAMAX TANKERS PROVED TO BE THE "WEAPON OF CHOICE" FOR MOST SHIP OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
With ship financing getting ever so difficult to procure during the past year or so, ship owners had to get creative in order to persuade banks and ...
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- Interocean Group of Companies - India
- Siam City Cement PLC, Thailand
- SMG Consultants - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Straits Asia Resources Limited - Singapore
- Star Paper Mills Limited - India
- Energy Link Ltd, New Zealand
- Timah Investasi Mineral - Indoneisa
- Mercator Lines Limited - India
- London Commodity Brokers - England
- Electricity Generating Authority of Thailand
- SN Aboitiz Power Inc, Philippines
- Sakthi Sugars Limited - India
- Tata Chemicals Ltd - India
- Central Java Power - Indonesia
- Vizag Seaport Private Limited - India
- Rio Tinto Coal - Australia
- San Jose City I Power Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- White Energy Company Limited
- Australian Commodity Traders Exchange
- Kepco SPC Power Corporation, Philippines
- The University of Queensland
- Kideco Jaya Agung - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Jaiprakash Power Ventures ltd
- Pendopo Energi Batubara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Riau Bara Harum - Indonesia
- Toyota Tsusho Corporation, Japan
- Goldman Sachs - Singapore
- LBH Netherlands Bv - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sojitz Corporation - Japan
- Australian Coal Association
- Oldendorff Carriers - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Madhucon Powers Ltd - India
- Bhushan Steel Limited - India
- Bukit Baiduri Energy - Indonesia
- Economic Council, Georgia
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Sinarmas Energy and Mining - Indonesia
- Borneo Indobara - Indonesia
- Intertek Mineral Services - Indonesia
- Semirara Mining Corp, Philippines
- Chamber of Mines of South Africa
- Larsen & Toubro Limited - India
- Global Coal Blending Company Limited - Australia
- Thiess Contractors Indonesia
- Merrill Lynch Commodities Europe
- Manunggal Multi Energi - Indonesia
- Gujarat Sidhee Cement - India
- Edison Trading Spa - Italy
- Maheswari Brothers Coal Limited - India
- Metalloyd Limited - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Xindia Steels Limited - India
- Meralco Power Generation, Philippines
- TeaM Sual Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Trasteel International SA, Italy
- GN Power Mariveles Coal Plant, Philippines
- Eastern Energy - Thailand
- Indika Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Mercuria Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- ICICI Bank Limited - India
- Grasim Industreis Ltd - India
- India Bulls Power Limited - India
- Therma Luzon, Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Binh Thuan Hamico - Vietnam
- Thai Mozambique Logistica
- Global Business Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IHS Mccloskey Coal Group - USA
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining and Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Singapore Mercantile Exchange
- VISA Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Coal and Oil Company - UAE
- Salva Resources Pvt Ltd - India
- Planning Commission, India
- Sindya Power Generating Company Private Ltd
- Central Electricity Authority - India
- Petron Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Latin American Coal - Colombia
- Petrochimia International Co. Ltd.- Taiwan
- OPG Power Generation Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Independent Power Producers Association of India
- Kaltim Prima Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Karaikal Port Pvt Ltd - India
- Minerals Council of Australia
- Iligan Light & Power Inc, Philippines
- Heidelberg Cement - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vedanta Resources Plc - India
- Ind-Barath Power Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Posco Energy - South Korea
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- ASAPP Information Group - India
- Meenaskhi Energy Private Limited - India
- Orica Australia Pty. Ltd.
- Africa Commodities Group - South Africa
- PTC India Limited - India
- Wilmar Investment Holdings
- Altura Mining Limited, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bhoruka Overseas - Indonesia
- Parliament of New Zealand
- Makarim & Taira - Indonesia
- SMC Global Power, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Videocon Industries ltd - India
- Bangladesh Power Developement Board
- Deloitte Consulting - India
- Mintek Dendrill Indonesia
- GVK Power & Infra Limited - India
- Uttam Galva Steels Limited - India
- Dalmia Cement Bharat India
- Holcim Trading Pte Ltd - Singapore
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Barasentosa Lestari - Indonesia
- CNBM International Corporation - China
- Jindal Steel & Power Ltd - India
- Ministry of Mines - Canada
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Lanco Infratech Ltd - India
- Banpu Public Company Limited - Thailand
- Medco Energi Mining Internasional
- Chettinad Cement Corporation Ltd - India
- Sarangani Energy Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Globalindo Alam Lestari - Indonesia
- Romanian Commodities Exchange
- Energy Development Corp, Philippines
- The Treasury - Australian Government
- Georgia Ports Authority, United States
- Ceylon Electricity Board - Sri Lanka
- GAC Shipping (India) Pvt Ltd
- Neyveli Lignite Corporation Ltd, - India
- Standard Chartered Bank - UAE
- Directorate Of Revenue Intelligence - India
- Tamil Nadu electricity Board
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coalindo Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bhatia International Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bharathi Cement Corporation - India
- Ambuja Cements Ltd - India
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- Aboitiz Power Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- International Coal Ventures Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Kobexindo Tractors - Indoneisa
- PNOC Exploration Corporation - Philippines
- Antam Resourcindo - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indogreen Group - Indonesia
- Bulk Trading Sa - Switzerland
- Siam City Cement - Thailand
- Malabar Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Indian Oil Corporation Limited
- PowerSource Philippines DevCo
- Ministry of Finance - Indonesia
- Anglo American - United Kingdom
- Wood Mackenzie - Singapore
- Indian Energy Exchange, India
- Cement Manufacturers Association - India
- Sical Logistics Limited - India
- Parry Sugars Refinery, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Formosa Plastics Group - Taiwan
- Simpson Spence & Young - Indonesia
- Commonwealth Bank - Australia
- Aditya Birla Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- The State Trading Corporation of India Ltd
- MS Steel International - UAE
- Carbofer General Trading SA - India
- Ministry of Transport, Egypt
- Electricity Authority, New Zealand
- Eastern Coal Council - USA
- Kartika Selabumi Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
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