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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, 10 January 16
LNG BUNKERING IN ASIA: FUELING A PROMISING FUTURE? - REED SMITH
The requirement of a mandatory reduction of sulphur content in bunker fuel proposed by the International Maritime Organisation (IMO) poses a challe ...
Saturday, 09 January 16
BALTIC DRY INDEX SINKS 10% WEEK OVER WEEK TO AN ALL-TIME LOW OF 429 POINTS
COALspot.com: The Baltic Exchange’s main sea freight index, which tracks rates for ships carrying dry bulk commodities, decline around 10% we ...
Friday, 08 January 16
FOB INDONESIA COAL SWAP FOR DELIVERY H1'16 REMAIN FLAT AS DEMAND DROPS OFF
COALspot.com: Indonesian coal swap delivery Q1 2016 declined month on month, flat week over week. The price for coal has been in a Dull Market sinc ...
Friday, 08 January 16
FOB RICHARDS BAY COAL SWAP FOR Q2'16 DELIVERY CLOSED UP $0.13 AT $45.50 PER TON
COALspot.com: Q1’ 2016 API4 FOB Richards Bay Coal swap decline month over month and slightly up week over week.
The Q1’ 2016 FOB R ...
Friday, 08 January 16
WEEKLY US COAL PRODUCTION DECLINES 1.6% TO 11.7 MMST, SAYS EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 11.7million short ...
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- CNBM International Corporation - China
- White Energy Company Limited
- Commonwealth Bank - Australia
- Miang Besar Coal Terminal - Indonesia
- London Commodity Brokers - England
- Renaissance Capital - South Africa
- Bukit Makmur.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Bukit Baiduri Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Toyota Tsusho Corporation, Japan
- GAC Shipping (India) Pvt Ltd
- Australian Commodity Traders Exchange
- Ministry of Transport, Egypt
- PTC India Limited - India
- Thai Mozambique Logistica
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sarangani Energy Corporation, Philippines
- Orica Australia Pty. Ltd.
- Coalindo Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Energy Development Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Central Electricity Authority - India
- Bulk Trading Sa - Switzerland
- Coastal Gujarat Power Limited - India
- ICICI Bank Limited - India
- Chamber of Mines of South Africa
- Sree Jayajothi Cements Limited - India
- Kepco SPC Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Baramulti Group, Indonesia
- Planning Commission, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Edison Trading Spa - Italy
- Eastern Coal Council - USA
- Indo Tambangraya Megah - Indonesia
- Intertek Mineral Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- SN Aboitiz Power Inc, Philippines
- Deloitte Consulting - India
- OPG Power Generation Pvt Ltd - India
- Kumho Petrochemical, South Korea
- ASAPP Information Group - India
- Cigading International Bulk Terminal - Indonesia
- Indonesian Coal Mining Association
- Kohat Cement Company Ltd. - Pakistan
- Coal and Oil Company - UAE
- Manunggal Multi Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Sojitz Corporation - Japan
- Semirara Mining Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- The Treasury - Australian Government
- Essar Steel Hazira Ltd - India
- Parry Sugars Refinery, India
- Goldman Sachs - Singapore
- Bayan Resources Tbk. - Indonesia
- Aboitiz Power Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Savvy Resources Ltd - HongKong
- Singapore Mercantile Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- Simpson Spence & Young - Indonesia
- The University of Queensland
- Madhucon Powers Ltd - India
- Larsen & Toubro Limited - India
- GVK Power & Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- Independent Power Producers Association of India
- Trasteel International SA, Italy
- Karaikal Port Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- India Bulls Power Limited - India
- GMR Energy Limited - India
- Port Waratah Coal Services - Australia
- Chettinad Cement Corporation Ltd - India
- Medco Energi Mining Internasional
- Sakthi Sugars Limited - India
- IHS Mccloskey Coal Group - USA
- Banpu Public Company Limited - Thailand
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- Straits Asia Resources Limited - Singapore
- Price Waterhouse Coopers - Russia
- Kaltim Prima Coal - Indonesia
- Xindia Steels Limited - India
- Gujarat Sidhee Cement - India
- European Bulk Services B.V. - Netherlands
- Pendopo Energi Batubara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Meenaskhi Energy Private Limited - India
- The State Trading Corporation of India Ltd
- Vizag Seaport Private Limited - India
- Electricity Generating Authority of Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IEA Clean Coal Centre - UK
- Sindya Power Generating Company Private Ltd
- Standard Chartered Bank - UAE
- Tata Chemicals Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Ind-Barath Power Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Eastern Energy - Thailand
- Kapuas Tunggal Persada - Indonesia
- Minerals Council of Australia
- Binh Thuan Hamico - Vietnam
- PNOC Exploration Corporation - Philippines
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- Global Green Power PLC Corporation, Philippines
- TeaM Sual Corporation - Philippines
- New Zealand Coal & Carbon
- TNB Fuel Sdn Bhd - Malaysia
- Indian Energy Exchange, India
- Mintek Dendrill Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Therma Luzon, Inc, Philippines
- Dalmia Cement Bharat India
- International Coal Ventures Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- PowerSource Philippines DevCo
- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- Vedanta Resources Plc - India
- Power Finance Corporation Ltd., India
- Alfred C Toepfer International GmbH - Germany
- Indogreen Group - Indonesia
- Bhatia International Limited - India
- Salva Resources Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Sinarmas Energy and Mining - Indonesia
- SMG Consultants - Indonesia
- Georgia Ports Authority, United States
- Lanco Infratech Ltd - India
- Bangladesh Power Developement Board
- Antam Resourcindo - Indonesia
- Malabar Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Oldendorff Carriers - Singapore
- Romanian Commodities Exchange
- Krishnapatnam Port Company Ltd. - India
- Agrawal Coal Company - India
- Videocon Industries ltd - India
- Barasentosa Lestari - Indonesia
- VISA Power Limited - India
- Australian Coal Association
- Wood Mackenzie - Singapore
- Petron Corporation, Philippines
- Carbofer General Trading SA - India
- Globalindo Alam Lestari - Indonesia
- Sical Logistics Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement PLC, Thailand
- Merrill Lynch Commodities Europe
- Mercator Lines Limited - India
- McConnell Dowell - Australia
- Heidelberg Cement - Germany
- Borneo Indobara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Star Paper Mills Limited - India
- Electricity Authority, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kartika Selabumi Mining - Indonesia
- Economic Council, Georgia
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- Tamil Nadu electricity Board
- Ministry of Mines - Canada
- Uttam Galva Steels Limited - India
- Marubeni Corporation - India
- Global Business Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Meralco Power Generation, Philippines
- Indian Oil Corporation Limited
- Thiess Contractors Indonesia
- Bhushan Steel Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Petrochimia International Co. Ltd.- Taiwan
- Metalloyd Limited - United Kingdom
- Mjunction Services Limited - India
- Interocean Group of Companies - India
- Riau Bara Harum - Indonesia
- Posco Energy - South Korea
- Gujarat Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Latin American Coal - Colombia
- Anglo American - United Kingdom
- Parliament of New Zealand
- Ambuja Cements Ltd - India
- Africa Commodities Group - South Africa
- Grasim Industreis Ltd - India
- Attock Cement Pakistan Limited
- South Luzon Thermal Energy Corporation
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Central Java Power - Indonesia
- Orica Mining Services - Indonesia
- Kobexindo Tractors - Indoneisa
- SMC Global Power, Philippines
- Aditya Birla Group - India
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