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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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Tuesday, 22 October 13
NEWCASTLE PORT SERVED 38 OCEAN GOING VESSELS IN A WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 0.64 per cent week on week to 3.21 million mt for ...
Tuesday, 22 October 13
KOWEPO INVITED BIDS FOR MULTI GRADE COAL
COALspot.com - Korea Western Power Co., Ltd. (KOWEPO), a Korean electricity generator intends to procure 240,000 tons of multi grade coal for its Ta ...
Monday, 21 October 13
SOUTH CHINA COAL SWAP FOR 2014 DELIVERIES SHOW A POSITIVE TREND
COALspot.com : API 8 CFR South China Coal swaps for average Q4 2013 delivery fell 0.02 percept M-M on Friday 18 October 2013. The CFR South China Co ...
Sunday, 20 October 13
Q3'14 SUB-BIT INDO COAL SWAP CLOSED AT $ 61.80 PMT W/E 18 OCT' 13
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery fell 0.93 percept month on month on Friday 18 October 201 ...
Saturday, 19 October 13
NICKEL ORE SHIPMENTS KEEP SUPRAMAX CHARTER RATES STEADY - CAPT. REDDY
COALspot.com : The futures freight market continued to go down which was reflected in the physical markets as well.
The BDI continued to be soft ...
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- Bhushan Steel Limited - India
- SN Aboitiz Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Billiton Holdings Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Kalimantan Lumbung Energi - Indonesia
- Central Java Power - Indonesia
- Malabar Cements Ltd - India
- Riau Bara Harum - Indonesia
- Coal and Oil Company - UAE
- Simpson Spence & Young - Indonesia
- Posco Energy - South Korea
- Orica Australia Pty. Ltd.
- CNBM International Corporation - China
- Lanco Infratech Ltd - India
- Madhucon Powers Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Power Finance Corporation Ltd., India
- Tata Chemicals Ltd - India
- Altura Mining Limited, Indonesia
- Sical Logistics Limited - India
- Manunggal Multi Energi - Indonesia
- Sakthi Sugars Limited - India
- Meenaskhi Energy Private Limited - India
- Grasim Industreis Ltd - India
- Globalindo Alam Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Wilmar Investment Holdings
- Thiess Contractors Indonesia
- IHS Mccloskey Coal Group - USA
- Energy Development Corp, Philippines
- The State Trading Corporation of India Ltd
- Baramulti Group, Indonesia
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- Mintek Dendrill Indonesia
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- Singapore Mercantile Exchange
- Siam City Cement - Thailand
- Miang Besar Coal Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Bayan Resources Tbk. - Indonesia
- Maheswari Brothers Coal Limited - India
- Videocon Industries ltd - India
- LBH Netherlands Bv - Netherlands
- Banpu Public Company Limited - Thailand
- VISA Power Limited - India
- Renaissance Capital - South Africa
- Wood Mackenzie - Singapore
- Bhatia International Limited - India
- Timah Investasi Mineral - Indoneisa
- Marubeni Corporation - India
- Indonesian Coal Mining Association
- Straits Asia Resources Limited - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cement Manufacturers Association - India
- Tamil Nadu electricity Board
- Ind-Barath Power Infra Limited - India
- Trasteel International SA, Italy
- Ambuja Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- Goldman Sachs - Singapore
- Chamber of Mines of South Africa
- IEA Clean Coal Centre - UK
- Bangladesh Power Developement Board
- Carbofer General Trading SA - India
- Holcim Trading Pte Ltd - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sojitz Corporation - Japan
- OPG Power Generation Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Romanian Commodities Exchange
- Interocean Group of Companies - India
- Indian Energy Exchange, India
- Savvy Resources Ltd - HongKong
- Krishnapatnam Port Company Ltd. - India
- Barasentosa Lestari - Indonesia
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- Gujarat Sidhee Cement - India
- Independent Power Producers Association of India
- Semirara Mining and Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Aditya Birla Group - India
- Port Waratah Coal Services - Australia
- Maharashtra Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Bukit Baiduri Energy - Indonesia
- SMC Global Power, Philippines
- Mjunction Services Limited - India
- PNOC Exploration Corporation - Philippines
- Vizag Seaport Private Limited - India
- Australian Coal Association
- Samtan Co., Ltd - South Korea
- Petron Corporation, Philippines
- Parliament of New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Electricity Generating Authority of Thailand
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Chettinad Cement Corporation Ltd - India
- Australian Commodity Traders Exchange
- The Treasury - Australian Government
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indo Tambangraya Megah - Indonesia
- Xindia Steels Limited - India
- Thai Mozambique Logistica
- Central Electricity Authority - India
- Anglo American - United Kingdom
- Bukit Makmur.PT - Indonesia
- Oldendorff Carriers - Singapore
- Bharathi Cement Corporation - India
- The University of Queensland
- Heidelberg Cement - Germany
- Bahari Cakrawala Sebuku - Indonesia
- Bhoruka Overseas - Indonesia
- Iligan Light & Power Inc, Philippines
- Agrawal Coal Company - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
- Uttam Galva Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Kumho Petrochemical, South Korea
- Vedanta Resources Plc - India
- International Coal Ventures Pvt Ltd - India
- Electricity Authority, New Zealand
- Eastern Coal Council - USA
- Rio Tinto Coal - Australia
- Gujarat Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Sindya Power Generating Company Private Ltd
- Meralco Power Generation, Philippines
- Commonwealth Bank - Australia
- PowerSource Philippines DevCo
- Attock Cement Pakistan Limited
- Parry Sugars Refinery, India
- Cigading International Bulk Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dalmia Cement Bharat India
- Kartika Selabumi Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Metalloyd Limited - United Kingdom
- Formosa Plastics Group - Taiwan
- Ministry of Transport, Egypt
- Larsen & Toubro Limited - India
- Ministry of Finance - Indonesia
- Binh Thuan Hamico - Vietnam
- Sarangani Energy Corporation, Philippines
- Georgia Ports Authority, United States
- Salva Resources Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- White Energy Company Limited
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- McConnell Dowell - Australia
- Semirara Mining Corp, Philippines
- Essar Steel Hazira Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- ASAPP Information Group - India
- Mercator Lines Limited - India
- New Zealand Coal & Carbon
- TNB Fuel Sdn Bhd - Malaysia
- San Jose City I Power Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- MS Steel International - UAE
- CIMB Investment Bank - Malaysia
- Ministry of Mines - Canada
- Deloitte Consulting - India
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- Coastal Gujarat Power Limited - India
- Minerals Council of Australia
- Pendopo Energi Batubara - Indonesia
- TeaM Sual Corporation - Philippines
- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- India Bulls Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Directorate General of MIneral and Coal - Indonesia
- SMG Consultants - Indonesia
- Mercuria Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement PLC, Thailand
- Coalindo Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Asmin Koalindo Tuhup - Indonesia
- Bulk Trading Sa - Switzerland
- Makarim & Taira - Indonesia
- Indogreen Group - Indonesia
- Orica Mining Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Neyveli Lignite Corporation Ltd, - India
- London Commodity Brokers - England
- Indian Oil Corporation Limited
- Karaikal Port Pvt Ltd - India
- Global Business Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Eastern Energy - Thailand
- Edison Trading Spa - Italy
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
- Economic Council, Georgia
- Medco Energi Mining Internasional
- Alfred C Toepfer International GmbH - Germany
- Indika Energy - Indonesia
- Borneo Indobara - Indonesia
- Directorate Of Revenue Intelligence - India
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