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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, 21 September 15
KOMIPO OF KOREA INVITES BIDS FOR BITUMINOUS COAL
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender for 390,000 Metric Tons (MT) of minimum 4,600 kcal ...
Sunday, 20 September 15
BALTIC CAPE INDEX ROSE 66.52 PER CENT AND STAND NOW AT 1995 POINTS
COALspot.com: The BDI (Baltic Dry Index) rose 17.35 per cent week over week to 960 points on Friday mainly driven by the Capesize segment. The Cape ...
Friday, 18 September 15
SHIPPING AND THE FED RATE DECISION: FINANCING COSTS COULD RISE EVEN HIGHER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Regardless of the FED’s decision to raise rates, shipping stands to be influenced by the decision. Shipbroker Allied Shipbroking noted this w ...
Friday, 18 September 15
U.S. COAL PRODUCTION DECLINED 6.7 PER CENT W-W: EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 17.4 million shor ...
Thursday, 17 September 15
COALSPOT HAS LAUNCHED NEW THERMAL COAL INDICES FOR INDONESIAN COAL
COALspot.com has today launched real-time CS (i) Coal Indices.
The Indices represents 3800 kcal/kg GAR, 4200 kcal/kg GAR, 5000 kcal/kg GAR a ...
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- Orica Australia Pty. Ltd.
- Price Waterhouse Coopers - Russia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kobexindo Tractors - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- The State Trading Corporation of India Ltd
- Kideco Jaya Agung - Indonesia
- Energy Link Ltd, New Zealand
- McConnell Dowell - Australia
- Planning Commission, India
- Economic Council, Georgia
- Sarangani Energy Corporation, Philippines
- Bangladesh Power Developement Board
- Directorate General of MIneral and Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Mintek Dendrill Indonesia
- Ministry of Finance - Indonesia
- Global Business Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Mercator Lines Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Dalmia Cement Bharat India
- Romanian Commodities Exchange
- Renaissance Capital - South Africa
- Kumho Petrochemical, South Korea
- Bukit Makmur.PT - Indonesia
- Thai Mozambique Logistica
- Miang Besar Coal Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Sakthi Sugars Limited - India
- Mercuria Energy - Indonesia
- Star Paper Mills Limited - India
- Agrawal Coal Company - India
- Ceylon Electricity Board - Sri Lanka
- Straits Asia Resources Limited - Singapore
- Sindya Power Generating Company Private Ltd
- Coalindo Energy - Indonesia
- New Zealand Coal & Carbon
- Semirara Mining and Power Corporation, Philippines
- Parry Sugars Refinery, India
- Orica Mining Services - Indonesia
- Electricity Authority, New Zealand
- Coal and Oil Company - UAE
- Ministry of Mines - Canada
- Indonesian Coal Mining Association
- Parliament of New Zealand
- Interocean Group of Companies - India
- Vizag Seaport Private Limited - India
- Altura Mining Limited, Indonesia
- OPG Power Generation Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Manunggal Multi Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Edison Trading Spa - Italy
- Latin American Coal - Colombia
- Central Electricity Authority - India
- PNOC Exploration Corporation - Philippines
- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Makarim & Taira - Indonesia
- Metalloyd Limited - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Central Java Power - Indonesia
- Commonwealth Bank - Australia
- Karbindo Abesyapradhi - Indoneisa
- Madhucon Powers Ltd - India
- PTC India Limited - India
- Indian Oil Corporation Limited
- Jaiprakash Power Ventures ltd
- SMG Consultants - Indonesia
- Savvy Resources Ltd - HongKong
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- Power Finance Corporation Ltd., India
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
- Pendopo Energi Batubara - Indonesia
- Medco Energi Mining Internasional
- Directorate Of Revenue Intelligence - India
- Jorong Barutama Greston.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Oldendorff Carriers - Singapore
- Coastal Gujarat Power Limited - India
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Singapore Mercantile Exchange
- Baramulti Group, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Xindia Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Essar Steel Hazira Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Grasim Industreis Ltd - India
- The Treasury - Australian Government
- Cement Manufacturers Association - India
- Indian Energy Exchange, India
- The University of Queensland
- AsiaOL BioFuels Corp., Philippines
- Formosa Plastics Group - Taiwan
- IHS Mccloskey Coal Group - USA
- Heidelberg Cement - Germany
- Vedanta Resources Plc - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Merrill Lynch Commodities Europe
- Neyveli Lignite Corporation Ltd, - India
- Malabar Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Sical Logistics Limited - India
- Kepco SPC Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Posco Energy - South Korea
- Port Waratah Coal Services - Australia
- PowerSource Philippines DevCo
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- Samtan Co., Ltd - South Korea
- Global Green Power PLC Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- GMR Energy Limited - India
- Lanco Infratech Ltd - India
- Eastern Coal Council - USA
- Riau Bara Harum - Indonesia
- Bharathi Cement Corporation - India
- Eastern Energy - Thailand
- Meralco Power Generation, Philippines
- London Commodity Brokers - England
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement - Thailand
- Maheswari Brothers Coal Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- White Energy Company Limited
- Borneo Indobara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Wilmar Investment Holdings
- Energy Development Corp, Philippines
- Gujarat Sidhee Cement - India
- Chamber of Mines of South Africa
- Antam Resourcindo - Indonesia
- Deloitte Consulting - India
- CIMB Investment Bank - Malaysia
- Petron Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- Intertek Mineral Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Global Coal Blending Company Limited - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Georgia Ports Authority, United States
- Electricity Generating Authority of Thailand
- Bukit Baiduri Energy - Indonesia
- VISA Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Goldman Sachs - Singapore
- South Luzon Thermal Energy Corporation
- PetroVietnam Power Coal Import and Supply Company
- Aditya Birla Group - India
- Krishnapatnam Port Company Ltd. - India
- Minerals Council of Australia
- Kartika Selabumi Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Aboitiz Power Corporation - Philippines
- India Bulls Power Limited - India
- Rio Tinto Coal - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Chettinad Cement Corporation Ltd - India
- MS Steel International - UAE
- Ministry of Transport, Egypt
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMC Global Power, Philippines
- Trasteel International SA, Italy
- Timah Investasi Mineral - Indoneisa
- Videocon Industries ltd - India
- Ind-Barath Power Infra Limited - India
- Therma Luzon, Inc, Philippines
- Bhushan Steel Limited - India
- Standard Chartered Bank - UAE
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Uttam Galva Steels Limited - India
- Larsen & Toubro Limited - India
- Tata Chemicals Ltd - India
- Australian Coal Association
- Africa Commodities Group - South Africa
- Bulk Trading Sa - Switzerland
- TeaM Sual Corporation - Philippines
- Barasentosa Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Iligan Light & Power Inc, Philippines
- Wood Mackenzie - Singapore
- Marubeni Corporation - India
- Attock Cement Pakistan Limited
- Indika Energy - Indonesia
- Indogreen Group - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- San Jose City I Power Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Bhatia International Limited - India
- Salva Resources Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Mjunction Services Limited - India
- Anglo American - United Kingdom
- Siam City Cement PLC, Thailand
- GVK Power & Infra Limited - India
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