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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, 09 July 13
NEWCASTLE COAL EXPORTS JUMP 27.53% ON WEEK TO 2.97 MILLION MT
COALspot.com - Newcastle Coal exports up 27.53% to 2.97 million tons W-o-W.
Newcastle port in Australia has loaded 2,974,715 tons of coal for the ...
Tuesday, 09 July 13
CAPESIZE: SHOT UP; PANAMAXES: NOT SO LUCK; SUPRAS: SLIGHTLY BETTER; HANDIES: SOFT - INTERMODAL
COALspot.com : June 2013 Recap
A renewed Capesize market this month (June 2013) was the cause for much of the overall noteworthy performanc ...
Tuesday, 09 July 13
THE 11TH DEEP COAL PROCESSING FORUM 2013
Press Release : The 11th Deep Coal Processing Forum 2013 will be held in November Beijing China.
CDMC Events is pleased to announce that 11 ...
Monday, 08 July 13
ECO-FRIENDLY COAL FOR CHINA - VALUE FOR THE ENVIRONMENT AND VALUE FOR THE POWER GENERATOR - BY: LINDSAY JUNIPER
COALspot.com : January 2013 saw an episode of extreme particulate pollution in Beijing 35 times worse than the safe level recommended by the World H ...
Sunday, 07 July 13
FREIGHT MARKET IS EXPECTED TO BE SOFT TO STABLE NEXT WEEK- VISTAAR
COALspot.com - The freight market softened for the week ended 5 July 2013, and experienced a decline in all sectors, including BDI. Bulk dry Index d ...
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- Mercuria Energy - Indonesia
- India Bulls Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Africa Commodities Group - South Africa
- Interocean Group of Companies - India
- Indogreen Group - Indonesia
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- Romanian Commodities Exchange
- Energy Link Ltd, New Zealand
- Wood Mackenzie - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jorong Barutama Greston.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
- The Treasury - Australian Government
- Independent Power Producers Association of India
- The State Trading Corporation of India Ltd
- Siam City Cement - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Sarangani Energy Corporation, Philippines
- Georgia Ports Authority, United States
- Salva Resources Pvt Ltd - India
- White Energy Company Limited
- Central Electricity Authority - India
- Xindia Steels Limited - India
- San Jose City I Power Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Latin American Coal - Colombia
- Essar Steel Hazira Ltd - India
- Dalmia Cement Bharat India
- Bhushan Steel Limited - India
- Toyota Tsusho Corporation, Japan
- Port Waratah Coal Services - Australia
- Bharathi Cement Corporation - India
- Gujarat Sidhee Cement - India
- Banpu Public Company Limited - Thailand
- Planning Commission, India
- Medco Energi Mining Internasional
- Straits Asia Resources Limited - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Bulk Trading Sa - Switzerland
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- SMC Global Power, Philippines
- Sindya Power Generating Company Private Ltd
- Marubeni Corporation - India
- Indian Energy Exchange, India
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Kobexindo Tractors - Indoneisa
- Samtan Co., Ltd - South Korea
- Electricity Authority, New Zealand
- Larsen & Toubro Limited - India
- SN Aboitiz Power Inc, Philippines
- Chamber of Mines of South Africa
- Singapore Mercantile Exchange
- Coalindo Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Merrill Lynch Commodities Europe
- Ministry of Mines - Canada
- Eastern Coal Council - USA
- Eastern Energy - Thailand
- Savvy Resources Ltd - HongKong
- Bangladesh Power Developement Board
- Lanco Infratech Ltd - India
- GAC Shipping (India) Pvt Ltd
- Siam City Cement PLC, Thailand
- Ceylon Electricity Board - Sri Lanka
- Uttam Galva Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Tata Chemicals Ltd - India
- Bukit Makmur.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Global Green Power PLC Corporation, Philippines
- Attock Cement Pakistan Limited
- Sinarmas Energy and Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- Leighton Contractors Pty Ltd - Australia
- Malabar Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ambuja Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Generating Authority of Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Carbofer General Trading SA - India
- London Commodity Brokers - England
- Pendopo Energi Batubara - Indonesia
- Orica Mining Services - Indonesia
- Australian Commodity Traders Exchange
- Central Java Power - Indonesia
- Mintek Dendrill Indonesia
- Anglo American - United Kingdom
- Binh Thuan Hamico - Vietnam
- Riau Bara Harum - Indonesia
- OPG Power Generation Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Agrawal Coal Company - India
- Indian Oil Corporation Limited
- Kaltim Prima Coal - Indonesia
- Parliament of New Zealand
- Heidelberg Cement - Germany
- Star Paper Mills Limited - India
- Semirara Mining and Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Coastal Gujarat Power Limited - India
- PowerSource Philippines DevCo
- Vedanta Resources Plc - India
- Economic Council, Georgia
- Billiton Holdings Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Tamil Nadu electricity Board
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- CNBM International Corporation - China
- Bhatia International Limited - India
- Cement Manufacturers Association - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kumho Petrochemical, South Korea
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- VISA Power Limited - India
- IEA Clean Coal Centre - UK
- Barasentosa Lestari - Indonesia
- MS Steel International - UAE
- Directorate Of Revenue Intelligence - India
- Kohat Cement Company Ltd. - Pakistan
- Kideco Jaya Agung - Indonesia
- Videocon Industries ltd - India
- Manunggal Multi Energi - Indonesia
- Baramulti Group, Indonesia
- Iligan Light & Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Finance - Indonesia
- CIMB Investment Bank - Malaysia
- Metalloyd Limited - United Kingdom
- PNOC Exploration Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- PTC India Limited - India
- Formosa Plastics Group - Taiwan
- Petron Corporation, Philippines
- Orica Australia Pty. Ltd.
- Makarim & Taira - Indonesia
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- Trasteel International SA, Italy
- Directorate General of MIneral and Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Holcim Trading Pte Ltd - Singapore
- Antam Resourcindo - Indonesia
- Sakthi Sugars Limited - India
- Borneo Indobara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Rio Tinto Coal - Australia
- Globalindo Alam Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- Standard Chartered Bank - UAE
- Minerals Council of Australia
- SMG Consultants - Indonesia
- European Bulk Services B.V. - Netherlands
- Global Coal Blending Company Limited - Australia
- Kepco SPC Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Commonwealth Bank - Australia
- Kalimantan Lumbung Energi - Indonesia
- Energy Development Corp, Philippines
- Price Waterhouse Coopers - Russia
- Sojitz Corporation - Japan
- Indonesian Coal Mining Association
- Semirara Mining Corp, Philippines
- Altura Mining Limited, Indonesia
- Deloitte Consulting - India
- Sical Logistics Limited - India
- TeaM Sual Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Mjunction Services Limited - India
- Renaissance Capital - South Africa
- Aditya Birla Group - India
- Ministry of Transport, Egypt
- The University of Queensland
- Bukit Baiduri Energy - Indonesia
- McConnell Dowell - Australia
- Madhucon Powers Ltd - India
- Thiess Contractors Indonesia
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- ICICI Bank Limited - India
- Mercator Lines Limited - India
- Grasim Industreis Ltd - India
- Indika Energy - Indonesia
- Global Business Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Australian Coal Association
- Intertek Mineral Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Sree Jayajothi Cements Limited - India
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