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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, 19 May 14
API 8 CFR SOUTH CHINA COAL LOST 2.49% MONTH ON MONTH
COALspot.com: API 8 CFR South China Coal swaps for average Q3 14 deliveries lost 2.49 percent month on month and closed at US$ 74.35 per mt as on F ...
Sunday, 18 May 14
FREIGHT RATES ARE EXPECTED TO BE FIRM NEXT WEEK
COALspot.com: The freight market was steady with the BDI was closed slightly higher at 1027 points or up 3.00 pct week on week.
The Cape ...
Friday, 16 May 14
KOMIPO IS LOOKING FOR 60K MT OF LOW VOLATILE BITUMINOUS COAL
COALspot.com : Korea Midland Power Co., Ltd. has invited bids through International open bidding for 60,000 Metric Tons (MT) of low volatile bitumi ...
Friday, 16 May 14
U.S. COAL PRODUCTION TOTALED APPROXIMATELY 18.9 MMST
COALspot.com – United States the world's second largest coal producer, produced approximately 18.9 million short tons (mmst) of coal i ...
Thursday, 15 May 14
PANAMAX : SHORT PERIOD UP TO ONE YEAR REPORTED IN THE 12.000-12.500 RANGE - FEARNRESEARCH
Handy
The Supra and handy market seems to be affected by the recent holidays in Singapore which still relatively quiet. There are some Indo / ...
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- Cement Manufacturers Association - India
- ASAPP Information Group - India
- Siam City Cement PLC, Thailand
- Sree Jayajothi Cements Limited - India
- Gujarat Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Kalimantan Lumbung Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Pendopo Energi Batubara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- TeaM Sual Corporation - Philippines
- Vizag Seaport Private Limited - India
- Kideco Jaya Agung - Indonesia
- Standard Chartered Bank - UAE
- Sojitz Corporation - Japan
- Coal and Oil Company - UAE
- Bukit Makmur.PT - Indonesia
- Wilmar Investment Holdings
- VISA Power Limited - India
- Indika Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- SMC Global Power, Philippines
- Central Java Power - Indonesia
- Directorate Of Revenue Intelligence - India
- McConnell Dowell - Australia
- Mercuria Energy - Indonesia
- Mjunction Services Limited - India
- Star Paper Mills Limited - India
- Samtan Co., Ltd - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- Parliament of New Zealand
- Uttam Galva Steels Limited - India
- Siam City Cement - Thailand
- Timah Investasi Mineral - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Bangladesh Power Developement Board
- Latin American Coal - Colombia
- Vijayanagar Sugar Pvt Ltd - India
- Marubeni Corporation - India
- Sindya Power Generating Company Private Ltd
- PowerSource Philippines DevCo
- Pipit Mutiara Jaya. PT, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Neyveli Lignite Corporation Ltd, - India
- Sinarmas Energy and Mining - Indonesia
- New Zealand Coal & Carbon
- LBH Netherlands Bv - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Bhatia International Limited - India
- Kartika Selabumi Mining - Indonesia
- PTC India Limited - India
- Bukit Baiduri Energy - Indonesia
- Ministry of Transport, Egypt
- Coastal Gujarat Power Limited - India
- Malabar Cements Ltd - India
- Kumho Petrochemical, South Korea
- ICICI Bank Limited - India
- Indonesian Coal Mining Association
- Ambuja Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Heidelberg Cement - Germany
- OPG Power Generation Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- SN Aboitiz Power Inc, Philippines
- Energy Development Corp, Philippines
- Larsen & Toubro Limited - India
- Mercator Lines Limited - India
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Baramulti Group, Indonesia
- Tamil Nadu electricity Board
- Kohat Cement Company Ltd. - Pakistan
- GN Power Mariveles Coal Plant, Philippines
- Carbofer General Trading SA - India
- Ind-Barath Power Infra Limited - India
- Simpson Spence & Young - Indonesia
- San Jose City I Power Corp, Philippines
- Mintek Dendrill Indonesia
- Chamber of Mines of South Africa
- Global Green Power PLC Corporation, Philippines
- Attock Cement Pakistan Limited
- White Energy Company Limited
- India Bulls Power Limited - India
- Barasentosa Lestari - Indonesia
- Grasim Industreis Ltd - India
- Eastern Coal Council - USA
- Posco Energy - South Korea
- Vedanta Resources Plc - India
- Miang Besar Coal Terminal - Indonesia
- Lanco Infratech Ltd - India
- Bulk Trading Sa - Switzerland
- Intertek Mineral Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMG Consultants - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Medco Energi Mining Internasional
- Maheswari Brothers Coal Limited - India
- London Commodity Brokers - England
- Straits Asia Resources Limited - Singapore
- Videocon Industries ltd - India
- Ministry of Finance - Indonesia
- Edison Trading Spa - Italy
- Xindia Steels Limited - India
- Aditya Birla Group - India
- Trasteel International SA, Italy
- Holcim Trading Pte Ltd - Singapore
- Borneo Indobara - Indonesia
- Riau Bara Harum - Indonesia
- Singapore Mercantile Exchange
- Makarim & Taira - Indonesia
- Rio Tinto Coal - Australia
- Semirara Mining and Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Australian Coal Association
- Indogreen Group - Indonesia
- Indian Oil Corporation Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Generating Authority of Thailand
- International Coal Ventures Pvt Ltd - India
- Ministry of Mines - Canada
- Bayan Resources Tbk. - Indonesia
- Jaiprakash Power Ventures ltd
- Global Coal Blending Company Limited - Australia
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Meralco Power Generation, Philippines
- Australian Commodity Traders Exchange
- Manunggal Multi Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Semirara Mining Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Binh Thuan Hamico - Vietnam
- Africa Commodities Group - South Africa
- Renaissance Capital - South Africa
- Madhucon Powers Ltd - India
- Planning Commission, India
- Sarangani Energy Corporation, Philippines
- Thai Mozambique Logistica
- Bhoruka Overseas - Indonesia
- Goldman Sachs - Singapore
- Thiess Contractors Indonesia
- Romanian Commodities Exchange
- European Bulk Services B.V. - Netherlands
- MS Steel International - UAE
- Power Finance Corporation Ltd., India
- Asmin Koalindo Tuhup - Indonesia
- Port Waratah Coal Services - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Merrill Lynch Commodities Europe
- Banpu Public Company Limited - Thailand
- Bhushan Steel Limited - India
- Energy Link Ltd, New Zealand
- The University of Queensland
- Sical Logistics Limited - India
- IHS Mccloskey Coal Group - USA
- The State Trading Corporation of India Ltd
- Electricity Authority, New Zealand
- Toyota Tsusho Corporation, Japan
- PNOC Exploration Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Oldendorff Carriers - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Therma Luzon, Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Iligan Light & Power Inc, Philippines
- Bharathi Cement Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Global Business Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Minerals Council of Australia
- Petron Corporation, Philippines
- GMR Energy Limited - India
- Independent Power Producers Association of India
- Dalmia Cement Bharat India
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Agrawal Coal Company - India
- Formosa Plastics Group - Taiwan
- Jindal Steel & Power Ltd - India
- Savvy Resources Ltd - HongKong
- Gujarat Sidhee Cement - India
- Altura Mining Limited, Indonesia
- Economic Council, Georgia
- Jorong Barutama Greston.PT - Indonesia
- Sakthi Sugars Limited - India
- Wood Mackenzie - Singapore
- AsiaOL BioFuels Corp., Philippines
- Georgia Ports Authority, United States
- Ceylon Electricity Board - Sri Lanka
- Central Electricity Authority - India
- South Luzon Thermal Energy Corporation
- Billiton Holdings Pty Ltd - Australia
- The Treasury - Australian Government
- Eastern Energy - Thailand
- Parry Sugars Refinery, India
- CIMB Investment Bank - Malaysia
- Commonwealth Bank - Australia
- Anglo American - United Kingdom
- Tata Chemicals Ltd - India
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- Indian Energy Exchange, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Australia Pty. Ltd.
- Indo Tambangraya Megah - Indonesia
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