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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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Monday, 18 April 16
INDONESIAN 5000 GAR COAL INDEX DECLINE 1.43 PERCENT WEEK OVER WEEK - CS (I) COAL INDEX
COALspot.com: Average 5000 GAR coal index of Indonesian origin fell 1.43 percent week over week to averaging $38.65 per ton on this past Friday, ac ...
Monday, 18 April 16
SOUTH KOREA STATE-OWNED UTILITY KOMIPO INVITES COAL BIDS FOR BORYEONG POWER PLANT
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a new tender for 70,000 Metric Tons of 4,600 kcal/kg NAR coal for ...
Monday, 18 April 16
SOUTH AFRICA RB1 COAL HAS LOST GROUND IN INDIA; RB2 MAY LOSE GRIP IF THE PRICE CROSSES US$ 50 A TON - TRADERS
COALspot.com: Indian coal consumers preferred to buy South Africa RB2 coal instead of RB1 coal recent months due to RB2's low CFR price level. ...
Monday, 18 April 16
CAPESIZE INDEX ROSE 44.66 PER CENT WEEK OVER WEEK
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities continued to rose this week.
The freight market was ...
Friday, 15 April 16
PANAMAX MARKET CONTINUES TO FIRM - FEARNLEYS
Cape
It has been a positive freight market for the past few weeks, however, this week the market is taking a small breather, says Fearnleys in it ...
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- San Jose City I Power Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Makarim & Taira - Indonesia
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- Kumho Petrochemical, South Korea
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- Heidelberg Cement - Germany
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Chamber of Mines of South Africa
- Barasentosa Lestari - Indonesia
- Indika Energy - Indonesia
- Africa Commodities Group - South Africa
- Sical Logistics Limited - India
- Indian Energy Exchange, India
- Electricity Authority, New Zealand
- Straits Asia Resources Limited - Singapore
- Jaiprakash Power Ventures ltd
- Alfred C Toepfer International GmbH - Germany
- Miang Besar Coal Terminal - Indonesia
- Sakthi Sugars Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Romanian Commodities Exchange
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- Edison Trading Spa - Italy
- Essar Steel Hazira Ltd - India
- Sojitz Corporation - Japan
- PTC India Limited - India
- Oldendorff Carriers - Singapore
- Merrill Lynch Commodities Europe
- Toyota Tsusho Corporation, Japan
- Global Coal Blending Company Limited - Australia
- Wilmar Investment Holdings
- Indogreen Group - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Coalindo Energy - Indonesia
- Bhatia International Limited - India
- Tata Chemicals Ltd - India
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- Altura Mining Limited, Indonesia
- India Bulls Power Limited - India
- Mercuria Energy - Indonesia
- London Commodity Brokers - England
- GMR Energy Limited - India
- Bharathi Cement Corporation - India
- Intertek Mineral Services - Indonesia
- Mintek Dendrill Indonesia
- Dalmia Cement Bharat India
- GVK Power & Infra Limited - India
- Bhoruka Overseas - Indonesia
- Port Waratah Coal Services - Australia
- Sarangani Energy Corporation, Philippines
- Tamil Nadu electricity Board
- Maheswari Brothers Coal Limited - India
- Posco Energy - South Korea
- Aditya Birla Group - India
- TeaM Sual Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Goldman Sachs - Singapore
- Semirara Mining and Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Economic Council, Georgia
- Renaissance Capital - South Africa
- The State Trading Corporation of India Ltd
- Timah Investasi Mineral - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Standard Chartered Bank - UAE
- Karbindo Abesyapradhi - Indoneisa
- LBH Netherlands Bv - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Vedanta Resources Plc - India
- Maharashtra Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- International Coal Ventures Pvt Ltd - India
- Larsen & Toubro Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Agrawal Coal Company - India
- Ceylon Electricity Board - Sri Lanka
- Indo Tambangraya Megah - Indonesia
- Star Paper Mills Limited - India
- Meralco Power Generation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement PLC, Thailand
- ASAPP Information Group - India
- Kohat Cement Company Ltd. - Pakistan
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- Ministry of Transport, Egypt
- Trasteel International SA, Italy
- Madhucon Powers Ltd - India
- Antam Resourcindo - Indonesia
- Electricity Generating Authority of Thailand
- Australian Coal Association
- Borneo Indobara - Indonesia
- VISA Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Marubeni Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Commodity Traders Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- SMC Global Power, Philippines
- The Treasury - Australian Government
- Grasim Industreis Ltd - India
- Aboitiz Power Corporation - Philippines
- PowerSource Philippines DevCo
- Sree Jayajothi Cements Limited - India
- Mjunction Services Limited - India
- Semirara Mining Corp, Philippines
- IEA Clean Coal Centre - UK
- Ind-Barath Power Infra Limited - India
- Wood Mackenzie - Singapore
- South Luzon Thermal Energy Corporation
- Baramulti Group, Indonesia
- Orica Mining Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- Holcim Trading Pte Ltd - Singapore
- SN Aboitiz Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Metalloyd Limited - United Kingdom
- Savvy Resources Ltd - HongKong
- Iligan Light & Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Binh Thuan Hamico - Vietnam
- New Zealand Coal & Carbon
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Jindal Steel & Power Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rashtriya Ispat Nigam Limited - India
- Parry Sugars Refinery, India
- Anglo American - United Kingdom
- MS Steel International - UAE
- CNBM International Corporation - China
- Carbofer General Trading SA - India
- Bangladesh Power Developement Board
- Leighton Contractors Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- Deloitte Consulting - India
- Kaltim Prima Coal - Indonesia
- White Energy Company Limited
- Central Java Power - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Vizag Seaport Private Limited - India
- Indonesian Coal Mining Association
- Kalimantan Lumbung Energi - Indonesia
- Simpson Spence & Young - Indonesia
- Independent Power Producers Association of India
- Ministry of Finance - Indonesia
- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Riau Bara Harum - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Central Electricity Authority - India
- Xindia Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Eastern Energy - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Interocean Group of Companies - India
- Price Waterhouse Coopers - Russia
- European Bulk Services B.V. - Netherlands
- Parliament of New Zealand
- CIMB Investment Bank - Malaysia
- Bukit Baiduri Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Therma Luzon, Inc, Philippines
- Minerals Council of Australia
- Kartika Selabumi Mining - Indonesia
- The University of Queensland
- Salva Resources Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Formosa Plastics Group - Taiwan
- OPG Power Generation Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- Commonwealth Bank - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Energy Link Ltd, New Zealand
- Siam City Cement - Thailand
- Bhushan Steel Limited - India
- Attock Cement Pakistan Limited
- IHS Mccloskey Coal Group - USA
- Lanco Infratech Ltd - India
- Sinarmas Energy and Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- Power Finance Corporation Ltd., India
- Globalindo Alam Lestari - Indonesia
- Ambuja Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Gujarat Sidhee Cement - India
- Billiton Holdings Pty Ltd - Australia
- Eastern Coal Council - USA
- McConnell Dowell - Australia
- Sindya Power Generating Company Private Ltd
- Directorate Of Revenue Intelligence - India
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