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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, 01 July 12
DSP OF SGX ASIACLEAR OTC COAL SWAP'S THIS WEEKS MOVEMENTS SLIGHTLY POSITIVE
COALspot.com - SGX AsiaClear OTC Coal Swaps have recovered slightly this week and Q4 deliveries are also showing positive direction.
SGX’s ...
Saturday, 30 June 12
THE FREIGHT RATES ARE EXPECTED TO BE STEADY TO FIRM NEXT WEEK - VISTAAR SINGAPORE
COALspot.com – The BDI was up by 2.66 pct (up by 26 points) closing at 1,004 points crossing the 1000 point barrier this week.
The c ...
Friday, 29 June 12
INDONESIAN PRODUCERS ARE PLANNING TO CUT PRODUCTION IF COAL PRICES FALL FURTHER
COALspot.com: Indonesia, the world largest multi grade coal exporter, shipped 31.54* million tons of coal in May 2012, compared to 31.86* mill ...
Friday, 29 June 12
DRY BULK SHIP OWNERS DOING THEIR MATHS BEFORE PLACING NEWBUILDING ORDERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With oversupply having plagued the dry bulk shipping fleet since the end of 2011, it’s become ever so evident that placing a newbuilding order ...
Thursday, 28 June 12
DRY BULK MARKET HIGHER ON CAPESIZE OPTIMISM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market inched a bit higher yesterday, as the BDI (Baltic Dry Index) ended up by 0.71% to 988 points. Most ship types were up, with the ...
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- Kumho Petrochemical, South Korea
- Standard Chartered Bank - UAE
- Formosa Plastics Group - Taiwan
- Price Waterhouse Coopers - Russia
- Meenaskhi Energy Private Limited - India
- Kideco Jaya Agung - Indonesia
- Mercuria Energy - Indonesia
- Africa Commodities Group - South Africa
- Deloitte Consulting - India
- Indian Oil Corporation Limited
- Bhoruka Overseas - Indonesia
- White Energy Company Limited
- Alfred C Toepfer International GmbH - Germany
- Uttam Galva Steels Limited - India
- Sojitz Corporation - Japan
- Vedanta Resources Plc - India
- San Jose City I Power Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- Power Finance Corporation Ltd., India
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- Videocon Industries ltd - India
- Tata Chemicals Ltd - India
- Ambuja Cements Ltd - India
- Port Waratah Coal Services - Australia
- Anglo American - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Kaltim Prima Coal - Indonesia
- Interocean Group of Companies - India
- Salva Resources Pvt Ltd - India
- Electricity Authority, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Jaiprakash Power Ventures ltd
- Bayan Resources Tbk. - Indonesia
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- Edison Trading Spa - Italy
- Trasteel International SA, Italy
- Marubeni Corporation - India
- Bhushan Steel Limited - India
- Sree Jayajothi Cements Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- Metalloyd Limited - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Antam Resourcindo - Indonesia
- Aditya Birla Group - India
- Vijayanagar Sugar Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Altura Mining Limited, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Toyota Tsusho Corporation, Japan
- Rio Tinto Coal - Australia
- European Bulk Services B.V. - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Parliament of New Zealand
- Ministry of Transport, Egypt
- Orica Mining Services - Indonesia
- Riau Bara Harum - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Lanco Infratech Ltd - India
- Sarangani Energy Corporation, Philippines
- McConnell Dowell - Australia
- New Zealand Coal & Carbon
- The Treasury - Australian Government
- Coal and Oil Company - UAE
- London Commodity Brokers - England
- Siam City Cement - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Intertek Mineral Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Dalmia Cement Bharat India
- Sinarmas Energy and Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Global Green Power PLC Corporation, Philippines
- Oldendorff Carriers - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Eastern Energy - Thailand
- Karaikal Port Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Sidhee Cement - India
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- VISA Power Limited - India
- TeaM Sual Corporation - Philippines
- Mintek Dendrill Indonesia
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Savvy Resources Ltd - HongKong
- Bangladesh Power Developement Board
- Minerals Council of Australia
- IHS Mccloskey Coal Group - USA
- CNBM International Corporation - China
- Baramulti Group, Indonesia
- Malabar Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Orica Australia Pty. Ltd.
- Larsen & Toubro Limited - India
- Sakthi Sugars Limited - India
- OPG Power Generation Pvt Ltd - India
- Indika Energy - Indonesia
- Semirara Mining Corp, Philippines
- Indonesian Coal Mining Association
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- Medco Energi Mining Internasional
- Bukit Baiduri Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maharashtra Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- ICICI Bank Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Wood Mackenzie - Singapore
- Carbofer General Trading SA - India
- The University of Queensland
- Singapore Mercantile Exchange
- Holcim Trading Pte Ltd - Singapore
- Australian Commodity Traders Exchange
- Commonwealth Bank - Australia
- PTC India Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Economic Council, Georgia
- Petron Corporation, Philippines
- Heidelberg Cement - Germany
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Georgia Ports Authority, United States
- Bulk Trading Sa - Switzerland
- Siam City Cement PLC, Thailand
- GVK Power & Infra Limited - India
- Indian Energy Exchange, India
- LBH Netherlands Bv - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Development Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Global Business Power Corporation, Philippines
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IEA Clean Coal Centre - UK
- Thiess Contractors Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Renaissance Capital - South Africa
- Jindal Steel & Power Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Madhucon Powers Ltd - India
- Mercator Lines Limited - India
- International Coal Ventures Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Wilmar Investment Holdings
- Makarim & Taira - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bharathi Cement Corporation - India
- Posco Energy - South Korea
- MS Steel International - UAE
- Chamber of Mines of South Africa
- GMR Energy Limited - India
- Iligan Light & Power Inc, Philippines
- Meralco Power Generation, Philippines
- Kartika Selabumi Mining - Indonesia
- Simpson Spence & Young - Indonesia
- GAC Shipping (India) Pvt Ltd
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
- PowerSource Philippines DevCo
- Ministry of Mines - Canada
- Star Paper Mills Limited - India
- Latin American Coal - Colombia
- Essar Steel Hazira Ltd - India
- Coalindo Energy - Indonesia
- SMC Global Power, Philippines
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- Gujarat Mineral Development Corp Ltd - India
- Romanian Commodities Exchange
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
- Thai Mozambique Logistica
- India Bulls Power Limited - India
- Vizag Seaport Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Borneo Indobara - Indonesia
- Tamil Nadu electricity Board
- Ceylon Electricity Board - Sri Lanka
- Central Java Power - Indonesia
- Central Electricity Authority - India
- Binh Thuan Hamico - Vietnam
- Australian Coal Association
- Attock Cement Pakistan Limited
- Timah Investasi Mineral - Indoneisa
- Eastern Coal Council - USA
- Grasim Industreis Ltd - India
- South Luzon Thermal Energy Corporation
- Samtan Co., Ltd - South Korea
- Kapuas Tunggal Persada - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Planning Commission, India
- CIMB Investment Bank - Malaysia
- Sical Logistics Limited - India
- Goldman Sachs - Singapore
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