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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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Wednesday, 03 September 14
KOREA MIDLAND POWER CO. LTD INVITES BIDS FOR 1 MMT OF BITUMINOUS & SUB-BITUMINOUS COAL FOR BORYEONG POWER PLANT
COALspot.com: KOMIPO again in the market for 1 million tons of 5700 NAR and 4600 NAR coal for Jan – March 2015. South Korean state-owned util ...
Wednesday, 03 September 14
CFR S.CHINA COAL SWAP FOR JAN 2015 DELIVERY CLOSED AT $ 68.30 PMT; DOWN 2.43% W-O-W
COALspot.com: API 8 CFR South China Coal swap for delivery in October 2014 decreased US$ 0.95 (-1.39%) day on day and US$ 1.40 (-2.03%) week on wee ...
Tuesday, 02 September 14
BERAU COAL HAS AWARDED A CONTRACT EXTENSION TO BUMA FOR 647 MLN BCM OVERBURDEN REMOVAL
COALspot.com: PT Delta Dunia Makmur Tbk (“DOID”) has announced that its primary operating subsidiary, PT Bukit Makmur Mandiri Utama (&l ...
Monday, 01 September 14
GLOBALCOAL WELCOMES TWO NEW MARKET MEMBERS
COALspot.com: globalCOAL® announced today that two Market Members have joined its trading community. Both new Market Members are from the India ...
Sunday, 31 August 14
COAL FREIGHT RATES INTO INDIA FROM INDONESIA FIRM
COALspot.com: The freight market continued to firm this week. BDI up 5.42 percent week ended 29 August and closed at 1147 points while the Ca ...
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- Siam City Cement PLC, Thailand
- Miang Besar Coal Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Merrill Lynch Commodities Europe
- Bulk Trading Sa - Switzerland
- Goldman Sachs - Singapore
- Price Waterhouse Coopers - Russia
- International Coal Ventures Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Singapore Mercantile Exchange
- TNB Fuel Sdn Bhd - Malaysia
- European Bulk Services B.V. - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Transport, Egypt
- Bukit Asam (Persero) Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Offshore Bulk Terminal Pte Ltd, Singapore
- ICICI Bank Limited - India
- Madhucon Powers Ltd - India
- SMG Consultants - Indonesia
- Bhatia International Limited - India
- Energy Development Corp, Philippines
- Australian Coal Association
- Ambuja Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Borneo Indobara - Indonesia
- Bukit Makmur.PT - Indonesia
- Mercator Lines Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- Samtan Co., Ltd - South Korea
- Holcim Trading Pte Ltd - Singapore
- Altura Mining Limited, Indonesia
- Toyota Tsusho Corporation, Japan
- Attock Cement Pakistan Limited
- Karbindo Abesyapradhi - Indoneisa
- Tata Chemicals Ltd - India
- Indonesian Coal Mining Association
- Formosa Plastics Group - Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Economic Council, Georgia
- Star Paper Mills Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Bukit Baiduri Energy - Indonesia
- Meralco Power Generation, Philippines
- MS Steel International - UAE
- Commonwealth Bank - Australia
- Electricity Authority, New Zealand
- Africa Commodities Group - South Africa
- Dalmia Cement Bharat India
- Metalloyd Limited - United Kingdom
- Lanco Infratech Ltd - India
- Eastern Coal Council - USA
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- IEA Clean Coal Centre - UK
- Sree Jayajothi Cements Limited - India
- Rio Tinto Coal - Australia
- Kaltim Prima Coal - Indonesia
- Ministry of Mines - Canada
- Therma Luzon, Inc, Philippines
- Indian Oil Corporation Limited
- Rashtriya Ispat Nigam Limited - India
- Intertek Mineral Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Heidelberg Cement - Germany
- Indogreen Group - Indonesia
- Karaikal Port Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Binh Thuan Hamico - Vietnam
- PTC India Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- McConnell Dowell - Australia
- Bharathi Cement Corporation - India
- Electricity Generating Authority of Thailand
- Gujarat Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Parry Sugars Refinery, India
- Interocean Group of Companies - India
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Minerals Council of Australia
- Independent Power Producers Association of India
- Savvy Resources Ltd - HongKong
- Riau Bara Harum - Indonesia
- Wood Mackenzie - Singapore
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- OPG Power Generation Pvt Ltd - India
- Baramulti Group, Indonesia
- Siam City Cement - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Latin American Coal - Colombia
- Petron Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Global Coal Blending Company Limited - Australia
- Asmin Koalindo Tuhup - Indonesia
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- Cigading International Bulk Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Sojitz Corporation - Japan
- SMC Global Power, Philippines
- Parliament of New Zealand
- Mjunction Services Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Marubeni Corporation - India
- CNBM International Corporation - China
- Indian Energy Exchange, India
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- Kumho Petrochemical, South Korea
- Georgia Ports Authority, United States
- India Bulls Power Limited - India
- Chamber of Mines of South Africa
- VISA Power Limited - India
- Coal and Oil Company - UAE
- ASAPP Information Group - India
- Xindia Steels Limited - India
- Sindya Power Generating Company Private Ltd
- Tamil Nadu electricity Board
- White Energy Company Limited
- Bahari Cakrawala Sebuku - Indonesia
- Coalindo Energy - Indonesia
- The University of Queensland
- Central Electricity Authority - India
- Leighton Contractors Pty Ltd - Australia
- Videocon Industries ltd - India
- Medco Energi Mining Internasional
- Mercuria Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Energy Link Ltd, New Zealand
- Essar Steel Hazira Ltd - India
- Kepco SPC Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Wilmar Investment Holdings
- Bangladesh Power Developement Board
- The Treasury - Australian Government
- GVK Power & Infra Limited - India
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Aboitiz Power Corporation - Philippines
- Central Java Power - Indonesia
- Antam Resourcindo - Indonesia
- Trasteel International SA, Italy
- Pendopo Energi Batubara - Indonesia
- San Jose City I Power Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Sinarmas Energy and Mining - Indonesia
- Mintek Dendrill Indonesia
- Anglo American - United Kingdom
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- Directorate Of Revenue Intelligence - India
- Oldendorff Carriers - Singapore
- Power Finance Corporation Ltd., India
- Barasentosa Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Indika Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Sical Logistics Limited - India
- Makarim & Taira - Indonesia
- Global Business Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Grasim Industreis Ltd - India
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Port Waratah Coal Services - Australia
- Billiton Holdings Pty Ltd - Australia
- Thai Mozambique Logistica
- Jaiprakash Power Ventures ltd
- Malabar Cements Ltd - India
- Bhushan Steel Limited - India
- Vedanta Resources Plc - India
- Ind-Barath Power Infra Limited - India
- Thiess Contractors Indonesia
- Chettinad Cement Corporation Ltd - India
- Larsen & Toubro Limited - India
- Simpson Spence & Young - Indonesia
- CIMB Investment Bank - Malaysia
- GAC Shipping (India) Pvt Ltd
- Orica Australia Pty. Ltd.
- Planning Commission, India
- Edison Trading Spa - Italy
- Semirara Mining and Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Romanian Commodities Exchange
- Timah Investasi Mineral - Indoneisa
- Banpu Public Company Limited - Thailand
- Salva Resources Pvt Ltd - India
- Ministry of Finance - Indonesia
- Agrawal Coal Company - India
- Renaissance Capital - South Africa
- Manunggal Multi Energi - Indonesia
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