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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, 03 January 13
DRY BULK DEMAND TO KEEP RISING IN 2013, DRY BULK SHIP PRICES TO KEEP FALLING SAYS ANALYST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
In a recent report on the future of the shipping markets, DVB bank said that dry bulk demand is expected to keep on growing in the coming years, mai ...
Wednesday, 02 January 13
NEWCASTLE PORT SHIPPED 23.61 PERCENT MORE COAL W-W
COALspot.com - Newcastle port in Australia has loaded 3,533,183 MT of thermal and coking coal for week ended 0700 hours 31 December 2012, Newc ...
Wednesday, 02 January 13
DRY BULK MARKET TO STAY ELEVATED IN START OF 2013 BUT THE NEW YEAR WILL NOT BE WITHOUT TURBULENCE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
In its regular update on the dry bulk market, BIMCO forecasted, that Capesize time-charter rates are expected to stay elevated in the following six ...
Monday, 31 December 12
KOSEP IS LOOKING FOR 280K MT OF 4600 NCV COAL FOR APRIL - JUNE 2013
COALspot.com : South Korean state-owned utility Korea South-East Power Co., Ltd. (KOSEP), has issued an new tender for prompt supply of 280,00 ...
Monday, 31 December 12
VALE CELEBRATES ARRIVAL OF "VALE SOHAR" BULK CARRIER TO SULTANATE WITH MEMBERS OF COMMUNITY
'Vale Sohar', one of the largest bulk carriers in the world, was welcomed to Oman by members of the North Al Batinah community headed by H.E. Shei ...
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- Semirara Mining and Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Global Green Power PLC Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- The University of Queensland
- Carbofer General Trading SA - India
- Formosa Plastics Group - Taiwan
- Coastal Gujarat Power Limited - India
- Attock Cement Pakistan Limited
- Bukit Baiduri Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Electricity Generating Authority of Thailand
- Meenaskhi Energy Private Limited - India
- London Commodity Brokers - England
- Bharathi Cement Corporation - India
- SMG Consultants - Indonesia
- Aditya Birla Group - India
- Bayan Resources Tbk. - Indonesia
- CNBM International Corporation - China
- International Coal Ventures Pvt Ltd - India
- McConnell Dowell - Australia
- Toyota Tsusho Corporation, Japan
- Australian Coal Association
- Africa Commodities Group - South Africa
- The Treasury - Australian Government
- Jindal Steel & Power Ltd - India
- Barasentosa Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Timah Investasi Mineral - Indoneisa
- Chamber of Mines of South Africa
- Tata Chemicals Ltd - India
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- Parliament of New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- VISA Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Karaikal Port Pvt Ltd - India
- Goldman Sachs - Singapore
- Aboitiz Power Corporation - Philippines
- Bhatia International Limited - India
- Indonesian Coal Mining Association
- Kartika Selabumi Mining - Indonesia
- Sical Logistics Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ICICI Bank Limited - India
- Bukit Makmur.PT - Indonesia
- Medco Energi Mining Internasional
- Savvy Resources Ltd - HongKong
- Ministry of Mines - Canada
- Bhushan Steel Limited - India
- Madhucon Powers Ltd - India
- Ind-Barath Power Infra Limited - India
- Merrill Lynch Commodities Europe
- Singapore Mercantile Exchange
- Cement Manufacturers Association - India
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Oldendorff Carriers - Singapore
- PTC India Limited - India
- Riau Bara Harum - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Renaissance Capital - South Africa
- Coalindo Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Agrawal Coal Company - India
- Gujarat Sidhee Cement - India
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- Ambuja Cements Ltd - India
- Thiess Contractors Indonesia
- Intertek Mineral Services - Indonesia
- Binh Thuan Hamico - Vietnam
- Parry Sugars Refinery, India
- PetroVietnam Power Coal Import and Supply Company
- Larsen & Toubro Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Central Electricity Authority - India
- Lanco Infratech Ltd - India
- CIMB Investment Bank - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- Chettinad Cement Corporation Ltd - India
- Videocon Industries ltd - India
- Globalindo Alam Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Tamil Nadu electricity Board
- White Energy Company Limited
- Manunggal Multi Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Makarim & Taira - Indonesia
- Petron Corporation, Philippines
- Heidelberg Cement - Germany
- Mintek Dendrill Indonesia
- Metalloyd Limited - United Kingdom
- Global Business Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- IEA Clean Coal Centre - UK
- TeaM Sual Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Eastern Coal Council - USA
- Maheswari Brothers Coal Limited - India
- Posco Energy - South Korea
- Economic Council, Georgia
- Directorate General of MIneral and Coal - Indonesia
- Interocean Group of Companies - India
- Siam City Cement - Thailand
- Jaiprakash Power Ventures ltd
- Billiton Holdings Pty Ltd - Australia
- Bangladesh Power Developement Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Deloitte Consulting - India
- Energy Development Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Mercator Lines Limited - India
- Pendopo Energi Batubara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- The State Trading Corporation of India Ltd
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- Minerals Council of Australia
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Edison Trading Spa - Italy
- Ministry of Transport, Egypt
- Romanian Commodities Exchange
- OPG Power Generation Pvt Ltd - India
- Orica Mining Services - Indonesia
- Georgia Ports Authority, United States
- Eastern Energy - Thailand
- Indo Tambangraya Megah - Indonesia
- Rio Tinto Coal - Australia
- Indian Energy Exchange, India
- SMC Global Power, Philippines
- Kideco Jaya Agung - Indonesia
- European Bulk Services B.V. - Netherlands
- Dalmia Cement Bharat India
- Borneo Indobara - Indonesia
- Sindya Power Generating Company Private Ltd
- Bulk Trading Sa - Switzerland
- Neyveli Lignite Corporation Ltd, - India
- TNB Fuel Sdn Bhd - Malaysia
- Vedanta Resources Plc - India
- Vizag Seaport Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Xindia Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- New Zealand Coal & Carbon
- Leighton Contractors Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Kumho Petrochemical, South Korea
- San Jose City I Power Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Australian Commodity Traders Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Price Waterhouse Coopers - Russia
- Coal and Oil Company - UAE
- Therma Luzon, Inc, Philippines
- Antam Resourcindo - Indonesia
- Central Java Power - Indonesia
- Mjunction Services Limited - India
- Sakthi Sugars Limited - India
- Directorate Of Revenue Intelligence - India
- Straits Asia Resources Limited - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Port Waratah Coal Services - Australia
- LBH Netherlands Bv - Netherlands
- MS Steel International - UAE
- Bhoruka Overseas - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Essar Steel Hazira Ltd - India
- Sojitz Corporation - Japan
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Anglo American - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Indogreen Group - Indonesia
- Grasim Industreis Ltd - India
- Malabar Cements Ltd - India
- Commonwealth Bank - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Trasteel International SA, Italy
- ASAPP Information Group - India
- Banpu Public Company Limited - Thailand
- Ministry of Finance - Indonesia
- Samtan Co., Ltd - South Korea
- Electricity Authority, New Zealand
- Siam City Cement PLC, Thailand
- Planning Commission, India
- Semirara Mining Corp, Philippines
- Thai Mozambique Logistica
- Cigading International Bulk Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Power Finance Corporation Ltd., India
- Maharashtra Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Alfred C Toepfer International GmbH - Germany
- India Bulls Power Limited - India
- Indian Oil Corporation Limited
- Kepco SPC Power Corporation, Philippines
- Independent Power Producers Association of India
- South Luzon Thermal Energy Corporation
- Indika Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Mercuria Energy - Indonesia
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