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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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Saturday, 03 January 15
U.S WEEKLY COAL PRODUCTION FELL 11.2% TO 17.6 MMST WEEK OVER WEEK - EIA
COALspot.com – United States the world's one of the largest coal producers, produced approximately 17.6 million short tons (mmst) of coal ...
Thursday, 01 January 15
FOB RICHARDS BAY COAL SWAPS CLOSED AT $63.47 PMT ON 26 DEC, SGX DATA SHOWS
COALspot.com: API 4 FOB Richards Bay Coal for delivery Q1' 2015 lost month on month and week over week.
The Q1 swap has lost US$ 3.37 (-4. ...
Wednesday, 31 December 14
COASTAL ENERGEN (C&O) COMMENCES 1ST UNIT OF 1200 MW POWER PLANT IN INDIA
COALspot.com: Coastal Energen, part of the Coal & Oil Group, announced last week the commissioning and commencement of power production at the ...
Wednesday, 31 December 14
SUB-BIT INDONESIA COAL Q2' 15 DELIVERY SWAP CLOSED 1.03% LOWER COMPARED TO AVERAGE Q1' 15 DELIVERY PRICE - SGX
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 lost month on month and gained week over week.
The Q1 swap has lost US$ 1.35 (-2 ...
Tuesday, 30 December 14
SHIP PRICES KEEP ON FALLING, SALES COME EARLY FOR SHIP OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Ship prices keep on falling on the back of low freight rates. According to the latest report from shipbroker Allied Shipbroking, January sales seem ...
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- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- SMG Consultants - Indonesia
- Riau Bara Harum - Indonesia
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rashtriya Ispat Nigam Limited - India
- CNBM International Corporation - China
- Bhushan Steel Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Independent Power Producers Association of India
- New Zealand Coal & Carbon
- IHS Mccloskey Coal Group - USA
- Chamber of Mines of South Africa
- Bangladesh Power Developement Board
- Star Paper Mills Limited - India
- Agrawal Coal Company - India
- Lanco Infratech Ltd - India
- Parry Sugars Refinery, India
- Georgia Ports Authority, United States
- Ministry of Transport, Egypt
- Thai Mozambique Logistica
- Attock Cement Pakistan Limited
- Indika Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Essar Steel Hazira Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Kartika Selabumi Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement PLC, Thailand
- London Commodity Brokers - England
- The Treasury - Australian Government
- MS Steel International - UAE
- Electricity Generating Authority of Thailand
- Neyveli Lignite Corporation Ltd, - India
- PNOC Exploration Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Deloitte Consulting - India
- Ambuja Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- Energy Development Corp, Philippines
- Aditya Birla Group - India
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- Cigading International Bulk Terminal - Indonesia
- Makarim & Taira - Indonesia
- Manunggal Multi Energi - Indonesia
- India Bulls Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karaikal Port Pvt Ltd - India
- Singapore Mercantile Exchange
- Indogreen Group - Indonesia
- Meralco Power Generation, Philippines
- Grasim Industreis Ltd - India
- Aboitiz Power Corporation - Philippines
- Energy Link Ltd, New Zealand
- Sical Logistics Limited - India
- CIMB Investment Bank - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- White Energy Company Limited
- Meenaskhi Energy Private Limited - India
- Central Electricity Authority - India
- Bahari Cakrawala Sebuku - Indonesia
- Intertek Mineral Services - Indonesia
- Marubeni Corporation - India
- Ministry of Mines - Canada
- Indian Oil Corporation Limited
- Power Finance Corporation Ltd., India
- SMC Global Power, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Trasteel International SA, Italy
- Formosa Plastics Group - Taiwan
- Semirara Mining and Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Edison Trading Spa - Italy
- McConnell Dowell - Australia
- Simpson Spence & Young - Indonesia
- Bhatia International Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Wilmar Investment Holdings
- Mintek Dendrill Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Energy - Thailand
- SN Aboitiz Power Inc, Philippines
- ICICI Bank Limited - India
- Planning Commission, India
- Vizag Seaport Private Limited - India
- Orica Mining Services - Indonesia
- Renaissance Capital - South Africa
- Kapuas Tunggal Persada - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Savvy Resources Ltd - HongKong
- Gujarat Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Australian Coal Association
- Ind-Barath Power Infra Limited - India
- Coalindo Energy - Indonesia
- Xindia Steels Limited - India
- Jindal Steel & Power Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Authority, New Zealand
- Directorate Of Revenue Intelligence - India
- Borneo Indobara - Indonesia
- Indo Tambangraya Megah - Indonesia
- Goldman Sachs - Singapore
- Videocon Industries ltd - India
- Tamil Nadu electricity Board
- Miang Besar Coal Terminal - Indonesia
- Mjunction Services Limited - India
- Krishnapatnam Port Company Ltd. - India
- AsiaOL BioFuels Corp., Philippines
- Standard Chartered Bank - UAE
- Salva Resources Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Coastal Gujarat Power Limited - India
- Larsen & Toubro Limited - India
- Cement Manufacturers Association - India
- Sinarmas Energy and Mining - Indonesia
- Heidelberg Cement - Germany
- South Luzon Thermal Energy Corporation
- Altura Mining Limited, Indonesia
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- European Bulk Services B.V. - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Wood Mackenzie - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercator Lines Limited - India
- Bukit Makmur.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Price Waterhouse Coopers - Russia
- Straits Asia Resources Limited - Singapore
- Rio Tinto Coal - Australia
- Sakthi Sugars Limited - India
- Bharathi Cement Corporation - India
- International Coal Ventures Pvt Ltd - India
- Siam City Cement - Thailand
- Kumho Petrochemical, South Korea
- Sarangani Energy Corporation, Philippines
- Banpu Public Company Limited - Thailand
- LBH Netherlands Bv - Netherlands
- The State Trading Corporation of India Ltd
- Economic Council, Georgia
- Antam Resourcindo - Indonesia
- Africa Commodities Group - South Africa
- Dalmia Cement Bharat India
- PowerSource Philippines DevCo
- Baramulti Group, Indonesia
- Barasentosa Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- GAC Shipping (India) Pvt Ltd
- Tata Chemicals Ltd - India
- Central Java Power - Indonesia
- Uttam Galva Steels Limited - India
- Madhucon Powers Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Mercuria Energy - Indonesia
- Parliament of New Zealand
- Romanian Commodities Exchange
- VISA Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Anglo American - United Kingdom
- Oldendorff Carriers - Singapore
- TeaM Sual Corporation - Philippines
- Ministry of Finance - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Therma Luzon, Inc, Philippines
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- Port Waratah Coal Services - Australia
- GMR Energy Limited - India
- Binh Thuan Hamico - Vietnam
- Interocean Group of Companies - India
- Bhoruka Overseas - Indonesia
- Metalloyd Limited - United Kingdom
- Global Business Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Medco Energi Mining Internasional
- Leighton Contractors Pty Ltd - Australia
- Coal and Oil Company - UAE
- Sree Jayajothi Cements Limited - India
- GVK Power & Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- The University of Queensland
- Bulk Trading Sa - Switzerland
- PTC India Limited - India
- Latin American Coal - Colombia
- Eastern Coal Council - USA
- Commonwealth Bank - Australia
- Indonesian Coal Mining Association
- San Jose City I Power Corp, Philippines
- Sojitz Corporation - Japan
- Orica Australia Pty. Ltd.
- Australian Commodity Traders Exchange
- Timah Investasi Mineral - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Global Coal Blending Company Limited - Australia
- Chettinad Cement Corporation Ltd - India
- Malabar Cements Ltd - India
- Petron Corporation, Philippines
- Vedanta Resources Plc - India
- ASAPP Information Group - India
- Karbindo Abesyapradhi - Indoneisa
- Merrill Lynch Commodities Europe
- Semirara Mining Corp, Philippines
- Posco Energy - South Korea
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