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