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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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Sunday, 20 January 13
Q1 & Q4 SUB-BIT FOB INDONESIA COAL SWAPS: FIRM
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) and CFR South China coal shipment for average Q1’ 2013 delivery have gained 0.81percent and ...
Sunday, 20 January 13
S7 & S8 ROUTE FREIGHT TREND IS EXPECTED TO BE FLAT TO SOFT THIS WEEK - VISTAAR
COALspot.com - The freight market was fairly steady with all the indices BDI up by 9.21 pct closing at 837 points. The Cape index was also sharply u ...
Friday, 18 January 13
NEWLEAD HOLDINGS LTD. TO ACQUIRE TWO COAL PROPERTIES WITH ESTIMATED COAL RESERVES OF 18.6 MMT & 143.1 MMT
NewLead Holdings Ltd. Announces Signing Agreement to Acquire Properties with Estimated Coal Reserves of 18.6 Million Tons; Signing Agreement to Acqu ...
Friday, 18 January 13
DRY BULK MARKET ON THE RISE, ON STRONG DEMAND FOR CAPESIZE VESSELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has continued its climbing trend yesterday, as the industry's benchmark, the Baltic Dry Index (BDI) was up by 39 points to 820. ...
Friday, 18 January 13
CAPESIZE : SIGNALS ARE MIXED BUT THE OVERALL TENDENCY IS POSITIVE - FEARNLEYS
Handy
The Atlantic market remained stable with USG-Feast fixed around USD 17k, according to fearnleys’s weekly report.
Continent / Medite ...
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- Central Java Power - Indonesia
- Kaltim Prima Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Trasteel International SA, Italy
- Agrawal Coal Company - India
- Siam City Cement PLC, Thailand
- Ministry of Transport, Egypt
- The State Trading Corporation of India Ltd
- Planning Commission, India
- Pipit Mutiara Jaya. PT, Indonesia
- Indo Tambangraya Megah - Indonesia
- SN Aboitiz Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Bhatia International Limited - India
- Baramulti Group, Indonesia
- Romanian Commodities Exchange
- Directorate Of Revenue Intelligence - India
- Bukit Baiduri Energy - Indonesia
- VISA Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Parliament of New Zealand
- Commonwealth Bank - Australia
- Salva Resources Pvt Ltd - India
- Meralco Power Generation, Philippines
- IHS Mccloskey Coal Group - USA
- Electricity Generating Authority of Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Makarim & Taira - Indonesia
- CNBM International Corporation - China
- Meenaskhi Energy Private Limited - India
- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- Madhucon Powers Ltd - India
- Edison Trading Spa - Italy
- Metalloyd Limited - United Kingdom
- Sakthi Sugars Limited - India
- Port Waratah Coal Services - Australia
- Orica Mining Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Karaikal Port Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Ambuja Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Videocon Industries ltd - India
- Parry Sugars Refinery, India
- Indian Oil Corporation Limited
- Carbofer General Trading SA - India
- Independent Power Producers Association of India
- Jorong Barutama Greston.PT - Indonesia
- Renaissance Capital - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Indonesian Coal Mining Association
- Cigading International Bulk Terminal - Indonesia
- GMR Energy Limited - India
- Toyota Tsusho Corporation, Japan
- Siam City Cement - Thailand
- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- Electricity Authority, New Zealand
- Georgia Ports Authority, United States
- Krishnapatnam Port Company Ltd. - India
- Deloitte Consulting - India
- Ceylon Electricity Board - Sri Lanka
- Aboitiz Power Corporation - Philippines
- Australian Coal Association
- Sindya Power Generating Company Private Ltd
- Tata Chemicals Ltd - India
- India Bulls Power Limited - India
- Australian Commodity Traders Exchange
- Bayan Resources Tbk. - Indonesia
- European Bulk Services B.V. - Netherlands
- Ind-Barath Power Infra Limited - India
- Oldendorff Carriers - Singapore
- Formosa Plastics Group - Taiwan
- McConnell Dowell - Australia
- Billiton Holdings Pty Ltd - Australia
- Larsen & Toubro Limited - India
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Sojitz Corporation - Japan
- Bhoruka Overseas - Indonesia
- Posco Energy - South Korea
- White Energy Company Limited
- Simpson Spence & Young - Indonesia
- Ministry of Finance - Indonesia
- Dalmia Cement Bharat India
- Global Coal Blending Company Limited - Australia
- Sical Logistics Limited - India
- Semirara Mining Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- ASAPP Information Group - India
- Minerals Council of Australia
- Intertek Mineral Services - Indonesia
- IEA Clean Coal Centre - UK
- Timah Investasi Mineral - Indoneisa
- Therma Luzon, Inc, Philippines
- The University of Queensland
- CIMB Investment Bank - Malaysia
- Binh Thuan Hamico - Vietnam
- Global Business Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Lanco Infratech Ltd - India
- Economic Council, Georgia
- Singapore Mercantile Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- Directorate General of MIneral and Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Kapuas Tunggal Persada - Indonesia
- Coastal Gujarat Power Limited - India
- Star Paper Mills Limited - India
- Leighton Contractors Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Price Waterhouse Coopers - Russia
- GVK Power & Infra Limited - India
- The Treasury - Australian Government
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Semirara Mining and Power Corporation, Philippines
- ICICI Bank Limited - India
- Cement Manufacturers Association - India
- Petron Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- Bulk Trading Sa - Switzerland
- South Luzon Thermal Energy Corporation
- Grasim Industreis Ltd - India
- Gujarat Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMG Consultants - Indonesia
- Heidelberg Cement - Germany
- Mjunction Services Limited - India
- Central Electricity Authority - India
- GAC Shipping (India) Pvt Ltd
- Bhushan Steel Limited - India
- Jaiprakash Power Ventures ltd
- Ministry of Mines - Canada
- Standard Chartered Bank - UAE
- Maharashtra Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Rio Tinto Coal - Australia
- Eastern Coal Council - USA
- Energy Development Corp, Philippines
- Orica Australia Pty. Ltd.
- Jindal Steel & Power Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- Malabar Cements Ltd - India
- Latin American Coal - Colombia
- MS Steel International - UAE
- Wood Mackenzie - Singapore
- Coal and Oil Company - UAE
- Kohat Cement Company Ltd. - Pakistan
- Indogreen Group - Indonesia
- Tamil Nadu electricity Board
- Holcim Trading Pte Ltd - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Energy Link Ltd, New Zealand
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- Gujarat Sidhee Cement - India
- Petrochimia International Co. Ltd.- Taiwan
- Indika Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Xindia Steels Limited - India
- Banpu Public Company Limited - Thailand
- Medco Energi Mining Internasional
- Altura Mining Limited, Indonesia
- PTC India Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Sree Jayajothi Cements Limited - India
- Chamber of Mines of South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- Uttam Galva Steels Limited - India
- Eastern Energy - Thailand
- Kepco SPC Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Savvy Resources Ltd - HongKong
- Mintek Dendrill Indonesia
- Goldman Sachs - Singapore
- Kartika Selabumi Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Straits Asia Resources Limited - Singapore
- San Jose City I Power Corp, Philippines
- Power Finance Corporation Ltd., India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- OPG Power Generation Pvt Ltd - India
- Attock Cement Pakistan Limited
- SMC Global Power, Philippines
- Aditya Birla Group - India
- Vedanta Resources Plc - India
- Mercator Lines Limited - India
- Antam Resourcindo - Indonesia
- Barasentosa Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Global Green Power PLC Corporation, Philippines
- Africa Commodities Group - South Africa
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- Indian Energy Exchange, India
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