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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, 26 April 20
STRONGER BUNKER PRICES FAIL TO RALLY FREIGHT MARKET - FIS
VLSFO bunker prices rebounded by $22.50 to $229/mt in the port of Singapore but failed to turn around the spot freight market.
Some ...
Saturday, 25 April 20
KOREA SOUTH-EAST POWER CO. INVITED BIDS FOR 780K - 900K MT OF 5600 NCV COAL FOR JULY TO OCTOBER 2020 LOADING
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 780,000~900,000 Metric Tons (MT) s ...
Saturday, 25 April 20
SEAFARER MENTAL WELLBEING DURING THE COVID-19 PANDEMIC - STANDARD CLUB
KNOWLEDGE TO ELEVATE
COVID-19 has forced many parts of the world to enforce a lockdown in a bid to flatten the curve in terms of transmissions ...
Friday, 24 April 20
KOMIPO INVITED BIDS FOR 5700 NAR COAL FOR JUNE & JULY LOADING
COALspot.com: South Korea’s Korea Midland Power Co. Ltd. (KOMIPO) Has Issued An International Tender For 260,000 Metric Tons (MT) Steam Coal ...
Friday, 24 April 20
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remained flat during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
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- VISA Power Limited - India
- IHS Mccloskey Coal Group - USA
- Sojitz Corporation - Japan
- Singapore Mercantile Exchange
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Interocean Group of Companies - India
- Samtan Co., Ltd - South Korea
- Borneo Indobara - Indonesia
- Port Waratah Coal Services - Australia
- Semirara Mining Corp, Philippines
- Coalindo Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Jindal Steel & Power Ltd - India
- Goldman Sachs - Singapore
- Indian Oil Corporation Limited
- Posco Energy - South Korea
- Maheswari Brothers Coal Limited - India
- Metalloyd Limited - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- PowerSource Philippines DevCo
- GN Power Mariveles Coal Plant, Philippines
- Directorate Of Revenue Intelligence - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Thiess Contractors Indonesia
- Indian Energy Exchange, India
- Alfred C Toepfer International GmbH - Germany
- Kepco SPC Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ambuja Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Bangladesh Power Developement Board
- Karbindo Abesyapradhi - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Africa Commodities Group - South Africa
- Kapuas Tunggal Persada - Indonesia
- SN Aboitiz Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Cement Manufacturers Association - India
- Savvy Resources Ltd - HongKong
- South Luzon Thermal Energy Corporation
- International Coal Ventures Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Australian Commodity Traders Exchange
- Eastern Coal Council - USA
- Chettinad Cement Corporation Ltd - India
- Attock Cement Pakistan Limited
- Energy Link Ltd, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Indika Energy - Indonesia
- Siam City Cement - Thailand
- Xindia Steels Limited - India
- Altura Mining Limited, Indonesia
- Bhoruka Overseas - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tamil Nadu electricity Board
- Marubeni Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- Minerals Council of Australia
- Indo Tambangraya Megah - Indonesia
- Planning Commission, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Toyota Tsusho Corporation, Japan
- Georgia Ports Authority, United States
- Asmin Koalindo Tuhup - Indonesia
- Standard Chartered Bank - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- TNB Fuel Sdn Bhd - Malaysia
- India Bulls Power Limited - India
- Indonesian Coal Mining Association
- Agrawal Coal Company - India
- Baramulti Group, Indonesia
- Lanco Infratech Ltd - India
- Chamber of Mines of South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Economic Council, Georgia
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- Deloitte Consulting - India
- Bahari Cakrawala Sebuku - Indonesia
- The Treasury - Australian Government
- GVK Power & Infra Limited - India
- Independent Power Producers Association of India
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
- Krishnapatnam Port Company Ltd. - India
- Kumho Petrochemical, South Korea
- Bayan Resources Tbk. - Indonesia
- Wilmar Investment Holdings
- Edison Trading Spa - Italy
- Bukit Makmur.PT - Indonesia
- SMC Global Power, Philippines
- Jaiprakash Power Ventures ltd
- Parliament of New Zealand
- Bhushan Steel Limited - India
- Mercuria Energy - Indonesia
- Orica Mining Services - Indonesia
- CNBM International Corporation - China
- London Commodity Brokers - England
- Sarangani Energy Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Uttam Galva Steels Limited - India
- IEA Clean Coal Centre - UK
- Aditya Birla Group - India
- Sakthi Sugars Limited - India
- MS Steel International - UAE
- San Jose City I Power Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- CIMB Investment Bank - Malaysia
- Energy Development Corp, Philippines
- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- Mercator Lines Limited - India
- Central Electricity Authority - India
- Bhatia International Limited - India
- Siam City Cement PLC, Thailand
- Rio Tinto Coal - Australia
- Antam Resourcindo - Indonesia
- Meenaskhi Energy Private Limited - India
- Aboitiz Power Corporation - Philippines
- Latin American Coal - Colombia
- Makarim & Taira - Indonesia
- Ministry of Transport, Egypt
- Thai Mozambique Logistica
- Straits Asia Resources Limited - Singapore
- Holcim Trading Pte Ltd - Singapore
- Dalmia Cement Bharat India
- Salva Resources Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Grasim Industreis Ltd - India
- Essar Steel Hazira Ltd - India
- Mjunction Services Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Romanian Commodities Exchange
- Semirara Mining and Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Gujarat Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Madhucon Powers Ltd - India
- Videocon Industries ltd - India
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- Merrill Lynch Commodities Europe
- Leighton Contractors Pty Ltd - Australia
- ASAPP Information Group - India
- New Zealand Coal & Carbon
- Meralco Power Generation, Philippines
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- Iligan Light & Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Medco Energi Mining Internasional
- ICICI Bank Limited - India
- Coal and Oil Company - UAE
- Gujarat Sidhee Cement - India
- Ceylon Electricity Board - Sri Lanka
- Globalindo Alam Lestari - Indonesia
- Wood Mackenzie - Singapore
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- Eastern Energy - Thailand
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Larsen & Toubro Limited - India
- Kobexindo Tractors - Indoneisa
- Global Coal Blending Company Limited - Australia
- Billiton Holdings Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Mintek Dendrill Indonesia
- Bukit Baiduri Energy - Indonesia
- Vedanta Resources Plc - India
- Pendopo Energi Batubara - Indonesia
- Parry Sugars Refinery, India
- GMR Energy Limited - India
- Ministry of Finance - Indonesia
- GAC Shipping (India) Pvt Ltd
- Heidelberg Cement - Germany
- Therma Luzon, Inc, Philippines
- Vizag Seaport Private Limited - India
- Anglo American - United Kingdom
- Oldendorff Carriers - Singapore
- Indogreen Group - Indonesia
- SMG Consultants - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Global Business Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Gujarat Mineral Development Corp Ltd - India
- Australian Coal Association
- Barasentosa Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Trasteel International SA, Italy
- Timah Investasi Mineral - Indoneisa
- Commonwealth Bank - Australia
- White Energy Company Limited
- Central Java Power - Indonesia
- The University of Queensland
- Neyveli Lignite Corporation Ltd, - India
- Electricity Generating Authority of Thailand
- PTC India Limited - India
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