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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, 29 September 14
INDONESIAN COAL EXPORT VOLUME FALL IN AUGUST
COALspot.com: Indonesia, one of the world's largest coal producers and the global leading multi grade coal exporter shipped around $1.50 ...
Monday, 29 September 14
INDONESIAN COAL SWAPS LOST WEEK ON WEEK AND MONTH OVER MONTH
COALspot.com: Indonesian coal swaps for average November 2014 flat day on day and lost US$ 0.85 (-1.66%) per mt week on week. The swap also lost US ...
Monday, 29 September 14
CFR SOUTH CHINA COAL LOST AROUND 5% MONTH ON MONTH
COALspot.com: API 8 CFR South China Coal swap for delivery in November 2014 decreased US$ 3.55 (-5.10%) month over month and flat week over week.
...
Sunday, 28 September 14
FREIGHT RATES FROM INDONESIA TO INDIA IS EXPECTED TO BE FIRM NEXT WEEK - CAPT. REDDY
COALspot.com: The freight market shows a bit weak trend this week.
The BDI was lost 2.42% week on week and closed at 1049 points on 26 Se ...
Sunday, 28 September 14
BERAU AGREES DEAL WITH GOVT, MINING AREA REDUCED - THE JAKARTA POST
Coal miner PT Berau Coal, a subsidiary of Jakarta-listed PT Berau Coal Energy (BRAU), has signed a memorandum of understanding (MoU) with the gover ...
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- Uttam Galva Steels Limited - India
- Eastern Coal Council - USA
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- Planning Commission, India
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- Kepco SPC Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Agrawal Coal Company - India
- Semirara Mining and Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Aditya Birla Group - India
- The Treasury - Australian Government
- Carbofer General Trading SA - India
- Commonwealth Bank - Australia
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- Gujarat Mineral Development Corp Ltd - India
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- Parry Sugars Refinery, India
- Altura Mining Limited, Indonesia
- Banpu Public Company Limited - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Australian Commodity Traders Exchange
- GAC Shipping (India) Pvt Ltd
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- Mercuria Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Sical Logistics Limited - India
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- Interocean Group of Companies - India
- Iligan Light & Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Aboitiz Power Corporation - Philippines
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
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- Thiess Contractors Indonesia
- Trasteel International SA, Italy
- Wilmar Investment Holdings
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- Sojitz Corporation - Japan
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- Chamber of Mines of South Africa
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- Miang Besar Coal Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Makarim & Taira - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indian Oil Corporation Limited
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- Electricity Authority, New Zealand
- Antam Resourcindo - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Coal and Oil Company - UAE
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- Indogreen Group - Indonesia
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- European Bulk Services B.V. - Netherlands
- Metalloyd Limited - United Kingdom
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Videocon Industries ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Indonesian Coal Mining Association
- Price Waterhouse Coopers - Russia
- VISA Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Globalindo Alam Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Orica Australia Pty. Ltd.
- Tamil Nadu electricity Board
- SMC Global Power, Philippines
- Therma Luzon, Inc, Philippines
- Indian Energy Exchange, India
- Semirara Mining Corp, Philippines
- Edison Trading Spa - Italy
- Sree Jayajothi Cements Limited - India
- Singapore Mercantile Exchange
- Dalmia Cement Bharat India
- Xindia Steels Limited - India
- Savvy Resources Ltd - HongKong
- GMR Energy Limited - India
- Goldman Sachs - Singapore
- Global Business Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Minerals Council of Australia
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- Karaikal Port Pvt Ltd - India
- Economic Council, Georgia
- Latin American Coal - Colombia
- Coalindo Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Madhucon Powers Ltd - India
- Indo Tambangraya Megah - Indonesia
- Georgia Ports Authority, United States
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kumho Petrochemical, South Korea
- Gujarat Sidhee Cement - India
- Kobexindo Tractors - Indoneisa
- CNBM International Corporation - China
- Bulk Trading Sa - Switzerland
- Global Green Power PLC Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
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- Bahari Cakrawala Sebuku - Indonesia
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- ICICI Bank Limited - India
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- Intertek Mineral Services - Indonesia
- IEA Clean Coal Centre - UK
- Siam City Cement PLC, Thailand
- Global Coal Blending Company Limited - Australia
- Star Paper Mills Limited - India
- Australian Coal Association
- Eastern Energy - Thailand
- Ambuja Cements Ltd - India
- Wood Mackenzie - Singapore
- South Luzon Thermal Energy Corporation
- Power Finance Corporation Ltd., India
- Bukit Baiduri Energy - Indonesia
- Standard Chartered Bank - UAE
- Meenaskhi Energy Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Marubeni Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Sakthi Sugars Limited - India
- Jindal Steel & Power Ltd - India
- Energy Link Ltd, New Zealand
- Siam City Cement - Thailand
- Alfred C Toepfer International GmbH - Germany
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- New Zealand Coal & Carbon
- India Bulls Power Limited - India
- Borneo Indobara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bayan Resources Tbk. - Indonesia
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- Malabar Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Essar Steel Hazira Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Africa Commodities Group - South Africa
- Timah Investasi Mineral - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- ASAPP Information Group - India
- Salva Resources Pvt Ltd - India
- Deloitte Consulting - India
- Cement Manufacturers Association - India
- Binh Thuan Hamico - Vietnam
- Independent Power Producers Association of India
- PTC India Limited - India
- Kalimantan Lumbung Energi - Indonesia
- London Commodity Brokers - England
- Vedanta Resources Plc - India
- PNOC Exploration Corporation - Philippines
- Ministry of Mines - Canada
- Renaissance Capital - South Africa
- Electricity Generating Authority of Thailand
- Ministry of Finance - Indonesia
- Toyota Tsusho Corporation, Japan
- Pendopo Energi Batubara - Indonesia
- Directorate Of Revenue Intelligence - India
- Attock Cement Pakistan Limited
- Kideco Jaya Agung - Indonesia
- Vizag Seaport Private Limited - India
- Grasim Industreis Ltd - India
- Chettinad Cement Corporation Ltd - India
- Bharathi Cement Corporation - India
- MS Steel International - UAE
- Meralco Power Generation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Bhushan Steel Limited - India
- LBH Netherlands Bv - Netherlands
- Posco Energy - South Korea
- The University of Queensland
- White Energy Company Limited
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- Bukit Asam (Persero) Tbk - Indonesia
- Anglo American - United Kingdom
- Lanco Infratech Ltd - India
- Gujarat Electricity Regulatory Commission - India
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