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