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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, 13 December 12
HANDY : WCI-CHINA RATES AROUND $ 6000 AND ECI-CHINA AROUND $ 4000 - FEARNLEYS
Handy
Atlantic market remained unchanged. Rates from USG to Feast were around USD 18k and Black Sea to Feast about USD 10k. USG-Skaw-Passero rates ...
Wednesday, 12 December 12
69.23 PERCENT OF END-USERS ARE BELIEVE, COAL PRICES ARE IN UPWARD TREND
COALspot.com - The Indonesian government’s declared coal reference price for December’ 12 has gained US cents 31 per MT M-o- ...
Wednesday, 12 December 12
CAPESIZE FREIGHT RATES TO RANGE BETWEEN $9,000 - 16,000/DAY IN THE COMING WEEKS SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
In its regular update on the dry bulk market, BIMCO forecasted yesterday, that Capesize time-charter rates are expected to stay elevated in the foll ...
Tuesday, 11 December 12
NEWCASTLE PORT IN AUSTRALIA HAS LOADED 2,720,205 MT OF COAL W/E 10 DECEMBER 2012
COALspot.com - Newcastle port in Australia has loaded 2,720,205 MT of thermal and coking coal for week ended 0700 hours 10 December 2012, Newc ...
Sunday, 09 December 12
COAL SWAPS HAVE LOST DIRECTION DUE TO LACK OF ASIAN INTEREST
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q1’ 2013 delivery gained 2.43 percent M-M but lost WoW by 0.54 percent and 0.62 ...
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- Romanian Commodities Exchange
- SMC Global Power, Philippines
- Krishnapatnam Port Company Ltd. - India
- Star Paper Mills Limited - India
- CNBM International Corporation - China
- Mintek Dendrill Indonesia
- Videocon Industries ltd - India
- Tamil Nadu electricity Board
- Indonesian Coal Mining Association
- Posco Energy - South Korea
- Power Finance Corporation Ltd., India
- Kumho Petrochemical, South Korea
- Banpu Public Company Limited - Thailand
- Siam City Cement - Thailand
- Rashtriya Ispat Nigam Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Malabar Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement PLC, Thailand
- European Bulk Services B.V. - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Minerals Council of Australia
- AsiaOL BioFuels Corp., Philippines
- GAC Shipping (India) Pvt Ltd
- Ministry of Finance - Indonesia
- Heidelberg Cement - Germany
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- New Zealand Coal & Carbon
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Sidhee Cement - India
- London Commodity Brokers - England
- Ambuja Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Indika Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- San Jose City I Power Corp, Philippines
- Carbofer General Trading SA - India
- Sical Logistics Limited - India
- Coal and Oil Company - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Merrill Lynch Commodities Europe
- Formosa Plastics Group - Taiwan
- Port Waratah Coal Services - Australia
- Global Coal Blending Company Limited - Australia
- White Energy Company Limited
- Gujarat Electricity Regulatory Commission - India
- Economic Council, Georgia
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining Corp, Philippines
- Australian Commodity Traders Exchange
- Bhoruka Overseas - Indonesia
- GMR Energy Limited - India
- Medco Energi Mining Internasional
- Antam Resourcindo - Indonesia
- Ind-Barath Power Infra Limited - India
- Electricity Authority, New Zealand
- Kaltim Prima Coal - Indonesia
- Madhucon Powers Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Miang Besar Coal Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Bhushan Steel Limited - India
- Meralco Power Generation, Philippines
- Bharathi Cement Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- Intertek Mineral Services - Indonesia
- Altura Mining Limited, Indonesia
- Tata Chemicals Ltd - India
- Bangladesh Power Developement Board
- ICICI Bank Limited - India
- Baramulti Group, Indonesia
- Jindal Steel & Power Ltd - India
- Makarim & Taira - Indonesia
- Riau Bara Harum - Indonesia
- Samtan Co., Ltd - South Korea
- Renaissance Capital - South Africa
- Singapore Mercantile Exchange
- Attock Cement Pakistan Limited
- Dalmia Cement Bharat India
- Interocean Group of Companies - India
- Chamber of Mines of South Africa
- Orica Australia Pty. Ltd.
- Barasentosa Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Maharashtra Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- PTC India Limited - India
- Independent Power Producers Association of India
- GVK Power & Infra Limited - India
- Agrawal Coal Company - India
- Therma Luzon, Inc, Philippines
- Jaiprakash Power Ventures ltd
- Orica Mining Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Alfred C Toepfer International GmbH - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Coal Council - USA
- Kepco SPC Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Commonwealth Bank - Australia
- Edison Trading Spa - Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercuria Energy - Indonesia
- Latin American Coal - Colombia
- Binh Thuan Hamico - Vietnam
- Vizag Seaport Private Limited - India
- Straits Asia Resources Limited - Singapore
- Indian Oil Corporation Limited
- Pendopo Energi Batubara - Indonesia
- Indogreen Group - Indonesia
- The Treasury - Australian Government
- Sakthi Sugars Limited - India
- Global Business Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- Chettinad Cement Corporation Ltd - India
- Energy Development Corp, Philippines
- Metalloyd Limited - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Parliament of New Zealand
- Coalindo Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Bhatia International Limited - India
- Ceylon Electricity Board - Sri Lanka
- Central Electricity Authority - India
- Uttam Galva Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Simpson Spence & Young - Indonesia
- Deloitte Consulting - India
- Aboitiz Power Corporation - Philippines
- PowerSource Philippines DevCo
- Gujarat Mineral Development Corp Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Petron Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Thiess Contractors Indonesia
- Marubeni Corporation - India
- Bukit Baiduri Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Cement Manufacturers Association - India
- VISA Power Limited - India
- Anglo American - United Kingdom
- Sindya Power Generating Company Private Ltd
- MS Steel International - UAE
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
- IEA Clean Coal Centre - UK
- Planning Commission, India
- Sojitz Corporation - Japan
- Coastal Gujarat Power Limited - India
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- Africa Commodities Group - South Africa
- Central Java Power - Indonesia
- Oldendorff Carriers - Singapore
- Essar Steel Hazira Ltd - India
- Goldman Sachs - Singapore
- Global Green Power PLC Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Grasim Industreis Ltd - India
- Eastern Energy - Thailand
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Timah Investasi Mineral - Indoneisa
- Vedanta Resources Plc - India
- Rio Tinto Coal - Australia
- South Luzon Thermal Energy Corporation
- McConnell Dowell - Australia
- IHS Mccloskey Coal Group - USA
- Billiton Holdings Pty Ltd - Australia
- India Bulls Power Limited - India
- Standard Chartered Bank - UAE
- Mjunction Services Limited - India
- Manunggal Multi Energi - Indonesia
- Mercator Lines Limited - India
- Globalindo Alam Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Wood Mackenzie - Singapore
- Wilmar Investment Holdings
- Savvy Resources Ltd - HongKong
- Kartika Selabumi Mining - Indonesia
- Ministry of Mines - Canada
- Kapuas Tunggal Persada - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Larsen & Toubro Limited - India
- Trasteel International SA, Italy
- The State Trading Corporation of India Ltd
- Lanco Infratech Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- Thai Mozambique Logistica
- Maheswari Brothers Coal Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- SMG Consultants - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Indian Energy Exchange, India
- CIMB Investment Bank - Malaysia
- ASAPP Information Group - India
- Salva Resources Pvt Ltd - India
- Georgia Ports Authority, United States
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