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