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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, 10 January 13
DRY BULK PANAMAX MARKET HEAVILY OVERSUPPLIED, UNLIKELY TO FIND SUPPORT IN 2013 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite positive indication for a significant surge of dry bulk demand this year, the oversupply problems of the market, will continue to weigh heav ...
Tuesday, 08 January 13
HOLIDAY ACTIVITY SCARCE IN THE MARKET OF SECOND HAND VESSELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Although the market for second hand vessel purchasing was quite lull during the Holiday period, as is usually the case, the first days of the New Ye ...
Tuesday, 08 January 13
NEWCASTLE PORT SHIPPED 3.197 MILLION MT OF COAL W/E 7 JANUARY 2013
COALspot.com - Newcastle port in Australia has loaded 3,197,580 MT of thermal and coking coal for week ended 0700 hours 7 January 2013, Newcas ...
Sunday, 06 January 13
CFR SOUTH CHINA COAL: 2014 DELIVERY CLOSED US$ 6.80 HIGHER THAN Q1 '13 PRICE
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q1’ 2013 delivery has gained 0.37 percent WoW and CFR South China coal sh ...
Sunday, 06 January 13
COAL BOOM: WAKE-UP CALL FOR INDIA & INDONESIA! - SUNIL K KUMBHAT
COALspot.com - Coal Boom : Scenario, Now & later!
Coal has been the dominant fuel for power generating plants in developed countries since th ...
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- Planning Commission, India
- Electricity Authority, New Zealand
- Savvy Resources Ltd - HongKong
- Lanco Infratech Ltd - India
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- MS Steel International - UAE
- IHS Mccloskey Coal Group - USA
- VISA Power Limited - India
- Vedanta Resources Plc - India
- Ministry of Transport, Egypt
- Standard Chartered Bank - UAE
- South Luzon Thermal Energy Corporation
- Mercator Lines Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Ind-Barath Power Infra Limited - India
- Grasim Industreis Ltd - India
- Dalmia Cement Bharat India
- Power Finance Corporation Ltd., India
- Uttam Galva Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Sical Logistics Limited - India
- Salva Resources Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tamil Nadu electricity Board
- Kepco SPC Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Star Paper Mills Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Pendopo Energi Batubara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Malabar Cements Ltd - India
- Therma Luzon, Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Central Electricity Authority - India
- Gujarat Mineral Development Corp Ltd - India
- Energy Link Ltd, New Zealand
- Marubeni Corporation - India
- Indonesian Coal Mining Association
- SN Aboitiz Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- Vijayanagar Sugar Pvt Ltd - India
- India Bulls Power Limited - India
- PowerSource Philippines DevCo
- Electricity Generating Authority of Thailand
- Baramulti Group, Indonesia
- Globalindo Alam Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Africa Commodities Group - South Africa
- Tata Chemicals Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Deloitte Consulting - India
- European Bulk Services B.V. - Netherlands
- Central Java Power - Indonesia
- Antam Resourcindo - Indonesia
- Romanian Commodities Exchange
- Barasentosa Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- The Treasury - Australian Government
- SMG Consultants - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- SMC Global Power, Philippines
- Aboitiz Power Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Sree Jayajothi Cements Limited - India
- Orica Mining Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Posco Energy - South Korea
- Sarangani Energy Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- Cement Manufacturers Association - India
- GVK Power & Infra Limited - India
- Sojitz Corporation - Japan
- Australian Coal Association
- Xindia Steels Limited - India
- Ministry of Mines - Canada
- Global Coal Blending Company Limited - Australia
- White Energy Company Limited
- Cigading International Bulk Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Chamber of Mines of South Africa
- Directorate Of Revenue Intelligence - India
- Wood Mackenzie - Singapore
- Bhatia International Limited - India
- Global Green Power PLC Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Renaissance Capital - South Africa
- Bhoruka Overseas - Indonesia
- Thai Mozambique Logistica
- Kohat Cement Company Ltd. - Pakistan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Timah Investasi Mineral - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- New Zealand Coal & Carbon
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- Georgia Ports Authority, United States
- Wilmar Investment Holdings
- Coal and Oil Company - UAE
- Petron Corporation, Philippines
- Larsen & Toubro Limited - India
- Minerals Council of Australia
- Port Waratah Coal Services - Australia
- PNOC Exploration Corporation - Philippines
- Meralco Power Generation, Philippines
- Indogreen Group - Indonesia
- Rio Tinto Coal - Australia
- Mjunction Services Limited - India
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- Bharathi Cement Corporation - India
- CIMB Investment Bank - Malaysia
- Iligan Light & Power Inc, Philippines
- Ministry of Finance - Indonesia
- Edison Trading Spa - Italy
- TeaM Sual Corporation - Philippines
- Mintek Dendrill Indonesia
- Alfred C Toepfer International GmbH - Germany
- Orica Australia Pty. Ltd.
- Merrill Lynch Commodities Europe
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- Indian Energy Exchange, India
- Carbofer General Trading SA - India
- Ceylon Electricity Board - Sri Lanka
- Bukit Makmur.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Commonwealth Bank - Australia
- LBH Netherlands Bv - Netherlands
- Heidelberg Cement - Germany
- London Commodity Brokers - England
- Bangladesh Power Developement Board
- San Jose City I Power Corp, Philippines
- The University of Queensland
- Jorong Barutama Greston.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Simpson Spence & Young - Indonesia
- CNBM International Corporation - China
- Goldman Sachs - Singapore
- Altura Mining Limited, Indonesia
- Intertek Mineral Services - Indonesia
- Makarim & Taira - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Parry Sugars Refinery, India
- The State Trading Corporation of India Ltd
- ICICI Bank Limited - India
- Global Business Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Borneo Indobara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- McConnell Dowell - Australia
- Latin American Coal - Colombia
- Medco Energi Mining Internasional
- Siam City Cement PLC, Thailand
- PTC India Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kideco Jaya Agung - Indonesia
- Binh Thuan Hamico - Vietnam
- Toyota Tsusho Corporation, Japan
- Agrawal Coal Company - India
- Chettinad Cement Corporation Ltd - India
- Indika Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Maheswari Brothers Coal Limited - India
- Jaiprakash Power Ventures ltd
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- Coalindo Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- Bulk Trading Sa - Switzerland
- Rashtriya Ispat Nigam Limited - India
- IEA Clean Coal Centre - UK
- Economic Council, Georgia
- Asmin Koalindo Tuhup - Indonesia
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thiess Contractors Indonesia
- Mercuria Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Madhucon Powers Ltd - India
- Singapore Mercantile Exchange
- Gujarat Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Eastern Coal Council - USA
- Parliament of New Zealand
- Riau Bara Harum - Indonesia
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