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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, 14 July 14
SGX CFR SOUTH CHINA COAL SWAP FOR Q3' 14 LOST 17.29% SINCE EARLY JANUARY 2014
COALspot.com: Coal price falling is continues as the impact oversupply and lower demand. API 8 CFR South China Coal swap for delivery in Q3 drops U ...
Sunday, 13 July 14
PANAMAX INDEX GAINS SLIGHTLY THIS WEEK; CAPE INDEX FALLS ALMOST 21.40%
COALspot.com: This week the freight market fell again after gaining last week. The cape index was down almost 21.40 pct and closed at 1465 points.
...
Friday, 11 July 14
EUROPE HAS A SUBSTANTIAL SURPLUS IN COAL SUPPLIES; RENEWABLE ENERGIES ARE REDUCING THE FULL-LOAD OPERATING HOURS OF HARD COAL-FIRED POWER PLANTS - VDKI
COALspot.com: General conditions for coal-fired power plants must be improved if the energy turnaround is to be a success, said German coal importe ...
Friday, 11 July 14
DR.CIESLIK RE-ELECTED AS CEO OF GERMAN COAL IMPORTER ASSOCIATION (VDKI)
Press Release : Dr Cieslik re-elected as CEO of German Coal Importer Association (VDKi) for the period 2014 – 2018. The German Coal Importer ...
Friday, 11 July 14
PORT OF NEWCASTLE SHIPPED $ 1.031 BILLION WORTH OF 11.744 MILLION TONS OF COAL IN JUNE 2014
COALspot.com: Port of Newcastle has shipped 11,744,396 tons of coal for the month ended 30 June 2014. According to Port’s monthly report, YTD ...
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- Simpson Spence & Young - Indonesia
- The State Trading Corporation of India Ltd
- Kalimantan Lumbung Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Thai Mozambique Logistica
- Price Waterhouse Coopers - Russia
- Directorate General of MIneral and Coal - Indonesia
- Medco Energi Mining Internasional
- Chamber of Mines of South Africa
- Africa Commodities Group - South Africa
- Kohat Cement Company Ltd. - Pakistan
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- Australian Coal Association
- Thiess Contractors Indonesia
- Mintek Dendrill Indonesia
- Meralco Power Generation, Philippines
- McConnell Dowell - Australia
- Miang Besar Coal Terminal - Indonesia
- Heidelberg Cement - Germany
- Antam Resourcindo - Indonesia
- Petron Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Tamil Nadu electricity Board
- Tata Chemicals Ltd - India
- Georgia Ports Authority, United States
- Kepco SPC Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Malabar Cements Ltd - India
- India Bulls Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Grasim Industreis Ltd - India
- Cement Manufacturers Association - India
- European Bulk Services B.V. - Netherlands
- Commonwealth Bank - Australia
- AsiaOL BioFuels Corp., Philippines
- Rashtriya Ispat Nigam Limited - India
- Bulk Trading Sa - Switzerland
- Maheswari Brothers Coal Limited - India
- Agrawal Coal Company - India
- Bhatia International Limited - India
- The Treasury - Australian Government
- Independent Power Producers Association of India
- Eastern Energy - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indonesian Coal Mining Association
- Goldman Sachs - Singapore
- Jaiprakash Power Ventures ltd
- Timah Investasi Mineral - Indoneisa
- Kumho Petrochemical, South Korea
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- Romanian Commodities Exchange
- Bayan Resources Tbk. - Indonesia
- CNBM International Corporation - China
- Latin American Coal - Colombia
- Australian Commodity Traders Exchange
- Asmin Koalindo Tuhup - Indonesia
- Orica Australia Pty. Ltd.
- Meenaskhi Energy Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Rio Tinto Coal - Australia
- IHS Mccloskey Coal Group - USA
- Minerals Council of Australia
- Krishnapatnam Port Company Ltd. - India
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Videocon Industries ltd - India
- Semirara Mining and Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Aboitiz Power Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Merrill Lynch Commodities Europe
- Jindal Steel & Power Ltd - India
- Kartika Selabumi Mining - Indonesia
- Dalmia Cement Bharat India
- Ceylon Electricity Board - Sri Lanka
- Indo Tambangraya Megah - Indonesia
- Mercator Lines Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Chettinad Cement Corporation Ltd - India
- Bukit Baiduri Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Parliament of New Zealand
- Karbindo Abesyapradhi - Indoneisa
- The University of Queensland
- Energy Link Ltd, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- London Commodity Brokers - England
- Banpu Public Company Limited - Thailand
- Eastern Coal Council - USA
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- Lanco Infratech Ltd - India
- Bukit Makmur.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Samtan Co., Ltd - South Korea
- Pendopo Energi Batubara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Billiton Holdings Pty Ltd - Australia
- Electricity Authority, New Zealand
- Mjunction Services Limited - India
- Gujarat Sidhee Cement - India
- International Coal Ventures Pvt Ltd - India
- SMC Global Power, Philippines
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- Uttam Galva Steels Limited - India
- Ministry of Finance - Indonesia
- Coalindo Energy - Indonesia
- Bangladesh Power Developement Board
- Iligan Light & Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- GAC Shipping (India) Pvt Ltd
- Interocean Group of Companies - India
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- Carbofer General Trading SA - India
- Kideco Jaya Agung - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kapuas Tunggal Persada - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- Sinarmas Energy and Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Anglo American - United Kingdom
- Trasteel International SA, Italy
- Savvy Resources Ltd - HongKong
- Riau Bara Harum - Indonesia
- Vizag Seaport Private Limited - India
- Central Electricity Authority - India
- Essar Steel Hazira Ltd - India
- Edison Trading Spa - Italy
- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
- Renaissance Capital - South Africa
- GMR Energy Limited - India
- Posco Energy - South Korea
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Manunggal Multi Energi - Indonesia
- Bharathi Cement Corporation - India
- Sical Logistics Limited - India
- Xindia Steels Limited - India
- Planning Commission, India
- Coal and Oil Company - UAE
- Bhushan Steel Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- OPG Power Generation Pvt Ltd - India
- Borneo Indobara - Indonesia
- Barasentosa Lestari - Indonesia
- PTC India Limited - India
- Indika Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- VISA Power Limited - India
- South Luzon Thermal Energy Corporation
- Ministry of Transport, Egypt
- Oldendorff Carriers - Singapore
- Toyota Tsusho Corporation, Japan
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Altura Mining Limited, Indonesia
- Siam City Cement - Thailand
- LBH Netherlands Bv - Netherlands
- Metalloyd Limited - United Kingdom
- Attock Cement Pakistan Limited
- Ministry of Mines - Canada
- Economic Council, Georgia
- Ambuja Cements Ltd - India
- San Jose City I Power Corp, Philippines
- Wilmar Investment Holdings
- Bahari Cakrawala Sebuku - Indonesia
- Bhoruka Overseas - Indonesia
- Sarangani Energy Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Central Java Power - Indonesia
- Baramulti Group, Indonesia
- PowerSource Philippines DevCo
- Straits Asia Resources Limited - Singapore
- Parry Sugars Refinery, India
- Salva Resources Pvt Ltd - India
- Indogreen Group - Indonesia
- MS Steel International - UAE
- Mercuria Energy - Indonesia
- Energy Development Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Madhucon Powers Ltd - India
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Kaltim Prima Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Maharashtra Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Star Paper Mills Limited - India
- Power Finance Corporation Ltd., India
- Pipit Mutiara Jaya. PT, Indonesia
- Sakthi Sugars Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Marubeni Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Vedanta Resources Plc - India
- IEA Clean Coal Centre - UK
- Leighton Contractors Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- Aditya Birla Group - India
- TeaM Sual Corporation - Philippines
- Deloitte Consulting - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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