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