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