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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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Sunday, 23 September 12
AN ANOTHER UNSTABLE WEEK FOR INDONESIAN COAL SWAPS
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for November 2012 delivery lost 1.10 percent and 0.916 percent WOW and DOD respectively ...
Sunday, 23 September 12
INDIA IMPORTED 11.40 PERCENT MORE INDONESIAN COAL IN AUGUST
COALspot.com: Indonesia, the world largest multi grade coal exporter, shipped 26,451,565* tons of coal in August 2012, compared to 27.88* mill ...
Saturday, 22 September 12
SOFT BUNKER PRICES KEEP INDONESIA TO INDIA FREIGHTS STABLE - VISTAAR
COALspot.com - The freight market overall remained buoyant with all indices up except for Panamax index. The main effect seems to be increased shipm ...
Friday, 21 September 12
SHIP BREAKING ACTIVITY REACHES NEW RECORDS, AS ALREADY 2012 LEVELS HAVE SURPASSED THE WHOLE OF 2011 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The vast oversupply of vessels, most notably in the dry bulk shipping sector, has forced ship owners to intensify their efforts towards recycling th ...
Thursday, 20 September 12
SUPRAMAX : INDO-INDIA ROUNDS WERE AROUND USD 12K - FEARNLEYS
Handy
Not a bad week for Supramax tonnage, if we compare Supramax developments to the bigger size tonnage. The rates have basically remained unchan ...
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- Ambuja Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- The University of Queensland
- Riau Bara Harum - Indonesia
- Attock Cement Pakistan Limited
- Holcim Trading Pte Ltd - Singapore
- London Commodity Brokers - England
- Merrill Lynch Commodities Europe
- Rashtriya Ispat Nigam Limited - India
- Eastern Energy - Thailand
- Straits Asia Resources Limited - Singapore
- Power Finance Corporation Ltd., India
- Altura Mining Limited, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Orica Australia Pty. Ltd.
- Gujarat Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- Uttam Galva Steels Limited - India
- Edison Trading Spa - Italy
- Sakthi Sugars Limited - India
- Goldman Sachs - Singapore
- Billiton Holdings Pty Ltd - Australia
- Deloitte Consulting - India
- VISA Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- AsiaOL BioFuels Corp., Philippines
- Karaikal Port Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Simpson Spence & Young - Indonesia
- Formosa Plastics Group - Taiwan
- Meenaskhi Energy Private Limited - India
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Tata Chemicals Ltd - India
- OPG Power Generation Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Coal Blending Company Limited - Australia
- Sojitz Corporation - Japan
- Barasentosa Lestari - Indonesia
- Trasteel International SA, Italy
- New Zealand Coal & Carbon
- Intertek Mineral Services - Indonesia
- Mjunction Services Limited - India
- Gujarat Sidhee Cement - India
- Sree Jayajothi Cements Limited - India
- Manunggal Multi Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Ind-Barath Power Infra Limited - India
- India Bulls Power Limited - India
- SMC Global Power, Philippines
- PowerSource Philippines DevCo
- Heidelberg Cement - Germany
- Cement Manufacturers Association - India
- Electricity Authority, New Zealand
- Pendopo Energi Batubara - Indonesia
- Aditya Birla Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Wilmar Investment Holdings
- Singapore Mercantile Exchange
- PTC India Limited - India
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Timah Investasi Mineral - Indoneisa
- Makarim & Taira - Indonesia
- The State Trading Corporation of India Ltd
- Economic Council, Georgia
- Indika Energy - Indonesia
- Bangladesh Power Developement Board
- Jaiprakash Power Ventures ltd
- Borneo Indobara - Indonesia
- Lanco Infratech Ltd - India
- Global Green Power PLC Corporation, Philippines
- Indonesian Coal Mining Association
- Interocean Group of Companies - India
- Bhushan Steel Limited - India
- Semirara Mining Corp, Philippines
- Madhucon Powers Ltd - India
- Latin American Coal - Colombia
- Marubeni Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Anglo American - United Kingdom
- Standard Chartered Bank - UAE
- Minerals Council of Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Port Waratah Coal Services - Australia
- San Jose City I Power Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement PLC, Thailand
- European Bulk Services B.V. - Netherlands
- Medco Energi Mining Internasional
- Electricity Generating Authority of Thailand
- Essar Steel Hazira Ltd - India
- Indogreen Group - Indonesia
- GAC Shipping (India) Pvt Ltd
- Binh Thuan Hamico - Vietnam
- SMG Consultants - Indonesia
- Leighton Contractors Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- IEA Clean Coal Centre - UK
- Meralco Power Generation, Philippines
- Videocon Industries ltd - India
- GMR Energy Limited - India
- Vedanta Resources Plc - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Transport, Egypt
- Maharashtra Electricity Regulatory Commission - India
- Australian Coal Association
- Maheswari Brothers Coal Limited - India
- Kumho Petrochemical, South Korea
- Directorate Of Revenue Intelligence - India
- Rio Tinto Coal - Australia
- Agrawal Coal Company - India
- Globalindo Alam Lestari - Indonesia
- Grasim Industreis Ltd - India
- Ministry of Finance - Indonesia
- TeaM Sual Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Commonwealth Bank - Australia
- Miang Besar Coal Terminal - Indonesia
- Ministry of Mines - Canada
- Oldendorff Carriers - Singapore
- Bharathi Cement Corporation - India
- The Treasury - Australian Government
- Kaltim Prima Coal - Indonesia
- Central Electricity Authority - India
- Banpu Public Company Limited - Thailand
- Kideco Jaya Agung - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Mintek Dendrill Indonesia
- Star Paper Mills Limited - India
- Chettinad Cement Corporation Ltd - India
- Bulk Trading Sa - Switzerland
- Eastern Coal Council - USA
- Thai Mozambique Logistica
- Africa Commodities Group - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Indian Energy Exchange, India
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- McConnell Dowell - Australia
- Salva Resources Pvt Ltd - India
- ASAPP Information Group - India
- Tamil Nadu electricity Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Larsen & Toubro Limited - India
- Sical Logistics Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Price Waterhouse Coopers - Russia
- Sinarmas Energy and Mining - Indonesia
- ICICI Bank Limited - India
- Antam Resourcindo - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Posco Energy - South Korea
- Coastal Gujarat Power Limited - India
- Xindia Steels Limited - India
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Parliament of New Zealand
- Bukit Baiduri Energy - Indonesia
- Coal and Oil Company - UAE
- Energy Development Corp, Philippines
- Jindal Steel & Power Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- Siam City Cement - Thailand
- Krishnapatnam Port Company Ltd. - India
- Kobexindo Tractors - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- Ceylon Electricity Board - Sri Lanka
- Kohat Cement Company Ltd. - Pakistan
- Chamber of Mines of South Africa
- Thiess Contractors Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indo Tambangraya Megah - Indonesia
- Vizag Seaport Private Limited - India
- Bhatia International Limited - India
- Parry Sugars Refinery, India
- Planning Commission, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Makmur.PT - Indonesia
- Mercator Lines Limited - India
- Dalmia Cement Bharat India
- Semirara Mining and Power Corporation, Philippines
- Baramulti Group, Indonesia
- Metalloyd Limited - United Kingdom
- Australian Commodity Traders Exchange
- Petron Corporation, Philippines
- Orica Mining Services - Indonesia
- Global Business Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Savvy Resources Ltd - HongKong
- Carbofer General Trading SA - India
- Malabar Cements Ltd - India
- MS Steel International - UAE
- Sindya Power Generating Company Private Ltd
- Central Java Power - Indonesia
- Energy Link Ltd, New Zealand
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