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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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Friday, 06 November 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Thursday, 05 November 20
THE INDONESIA COAL PRICE REFERENCE RISES FOR SECOND CONSECUTIVE MONTH
COALspot.com: The Indonesia Coal Price Reference rose for a 2nd month by 9.24% month on month. The Indonesia Coal Price Reference for the month of ...
Wednesday, 04 November 20
PHILIPPINES COAL MORATORIUM HIGHLIGHTS DRAMATIC PIVOT TO RENEWABLE ENERGY INVESTMENT FOR LOWER PRICES AND POWER SYSTEM RESILIENCE - IEEFA
Policymakers and industry leaders ready to embrace new energy technologies
The Department of Energy’s call for a moratorium on ...
Wednesday, 04 November 20
FOREIGN INVESTORS FACE TOUGH TIMES CLOSING VIETNAM’S REMAINING COAL POWER DEALS - IEEFA
Project bankability at risk as new regulations threaten usual contractual terms
Foreign investors will face higher-than-usual risks ...
Wednesday, 04 November 20
MARKET INSIGHT - INTERMODAL
As the end of the year approaches, one would definitely notice that the newbuilding orderbook for bulk carriers is significantly smaller compared t ...
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- OPG Power Generation Pvt Ltd - India
- Carbofer General Trading SA - India
- Uttam Galva Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Goldman Sachs - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Miang Besar Coal Terminal - Indonesia
- Star Paper Mills Limited - India
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- White Energy Company Limited
- Intertek Mineral Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Rashtriya Ispat Nigam Limited - India
- Thiess Contractors Indonesia
- Bangladesh Power Developement Board
- Larsen & Toubro Limited - India
- Banpu Public Company Limited - Thailand
- Semirara Mining Corp, Philippines
- Indonesian Coal Mining Association
- Bhatia International Limited - India
- Dalmia Cement Bharat India
- South Luzon Thermal Energy Corporation
- Indika Energy - Indonesia
- Vedanta Resources Plc - India
- Jaiprakash Power Ventures ltd
- TNB Fuel Sdn Bhd - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Commonwealth Bank - Australia
- The University of Queensland
- Meralco Power Generation, Philippines
- CIMB Investment Bank - Malaysia
- Sakthi Sugars Limited - India
- Simpson Spence & Young - Indonesia
- SMG Consultants - Indonesia
- Aboitiz Power Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
- Sical Logistics Limited - India
- India Bulls Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Thai Mozambique Logistica
- Bulk Trading Sa - Switzerland
- Kobexindo Tractors - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Anglo American - United Kingdom
- Kumho Petrochemical, South Korea
- Iligan Light & Power Inc, Philippines
- Heidelberg Cement - Germany
- PNOC Exploration Corporation - Philippines
- Economic Council, Georgia
- Binh Thuan Hamico - Vietnam
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- McConnell Dowell - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asmin Koalindo Tuhup - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Wood Mackenzie - Singapore
- Independent Power Producers Association of India
- Tamil Nadu electricity Board
- Port Waratah Coal Services - Australia
- Straits Asia Resources Limited - Singapore
- Gujarat Sidhee Cement - India
- Indian Energy Exchange, India
- Central Java Power - Indonesia
- Planning Commission, India
- Power Finance Corporation Ltd., India
- Sojitz Corporation - Japan
- Australian Commodity Traders Exchange
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- Ministry of Finance - Indonesia
- Coalindo Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Australian Coal Association
- Mintek Dendrill Indonesia
- Cigading International Bulk Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
- Agrawal Coal Company - India
- Global Coal Blending Company Limited - Australia
- Borneo Indobara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Orica Australia Pty. Ltd.
- Africa Commodities Group - South Africa
- GAC Shipping (India) Pvt Ltd
- Mjunction Services Limited - India
- Central Electricity Authority - India
- Directorate General of MIneral and Coal - Indonesia
- Antam Resourcindo - Indonesia
- Electricity Generating Authority of Thailand
- Kepco SPC Power Corporation, Philippines
- Trasteel International SA, Italy
- PTC India Limited - India
- Ceylon Electricity Board - Sri Lanka
- Parliament of New Zealand
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Orica Mining Services - Indonesia
- Lanco Infratech Ltd - India
- Eastern Coal Council - USA
- Minerals Council of Australia
- Baramulti Group, Indonesia
- TeaM Sual Corporation - Philippines
- Global Business Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Romanian Commodities Exchange
- Wilmar Investment Holdings
- Aditya Birla Group - India
- ICICI Bank Limited - India
- Deloitte Consulting - India
- Global Green Power PLC Corporation, Philippines
- Samtan Co., Ltd - South Korea
- San Jose City I Power Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Siam City Cement - Thailand
- Latin American Coal - Colombia
- Medco Energi Mining Internasional
- ASAPP Information Group - India
- Ambuja Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Meenaskhi Energy Private Limited - India
- Singapore Mercantile Exchange
- Toyota Tsusho Corporation, Japan
- Bahari Cakrawala Sebuku - Indonesia
- PowerSource Philippines DevCo
- Sindya Power Generating Company Private Ltd
- Attock Cement Pakistan Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Malabar Cements Ltd - India
- Marubeni Corporation - India
- Electricity Authority, New Zealand
- Altura Mining Limited, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Salva Resources Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Timah Investasi Mineral - Indoneisa
- Renaissance Capital - South Africa
- Siam City Cement PLC, Thailand
- Bukit Makmur.PT - Indonesia
- Formosa Plastics Group - Taiwan
- MS Steel International - UAE
- Cement Manufacturers Association - India
- Therma Luzon, Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Energy Link Ltd, New Zealand
- Indo Tambangraya Megah - Indonesia
- Ind-Barath Power Infra Limited - India
- Madhucon Powers Ltd - India
- Posco Energy - South Korea
- Chamber of Mines of South Africa
- CNBM International Corporation - China
- Sree Jayajothi Cements Limited - India
- Riau Bara Harum - Indonesia
- London Commodity Brokers - England
- Vizag Seaport Private Limited - India
- VISA Power Limited - India
- Savvy Resources Ltd - HongKong
- Georgia Ports Authority, United States
- Ministry of Transport, Egypt
- The Treasury - Australian Government
- Chettinad Cement Corporation Ltd - India
- Xindia Steels Limited - India
- Energy Development Corp, Philippines
- Mercator Lines Limited - India
- Bhoruka Overseas - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Parry Sugars Refinery, India
- Gujarat Mineral Development Corp Ltd - India
- Eastern Energy - Thailand
- Directorate Of Revenue Intelligence - India
- Rio Tinto Coal - Australia
- Bharathi Cement Corporation - India
- The State Trading Corporation of India Ltd
- Jindal Steel & Power Ltd - India
- Ministry of Mines - Canada
- Petron Corporation, Philippines
- Edison Trading Spa - Italy
- Merrill Lynch Commodities Europe
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jorong Barutama Greston.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Interocean Group of Companies - India
- GVK Power & Infra Limited - India
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- Bukit Baiduri Energy - Indonesia
- Coal and Oil Company - UAE
- Essar Steel Hazira Ltd - India
- Karaikal Port Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Kohat Cement Company Ltd. - Pakistan
- Metalloyd Limited - United Kingdom
- Standard Chartered Bank - UAE
- Leighton Contractors Pty Ltd - Australia
- Grasim Industreis Ltd - India
- International Coal Ventures Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- SMC Global Power, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
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