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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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- Savvy Resources Ltd - HongKong
- Kohat Cement Company Ltd. - Pakistan
- TeaM Sual Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Maheswari Brothers Coal Limited - India
- Mintek Dendrill Indonesia
- Sinarmas Energy and Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Attock Cement Pakistan Limited
- TNB Fuel Sdn Bhd - Malaysia
- CNBM International Corporation - China
- Baramulti Group, Indonesia
- Central Java Power - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Billiton Holdings Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Mercuria Energy - Indonesia
- Africa Commodities Group - South Africa
- Planning Commission, India
- Bhoruka Overseas - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kartika Selabumi Mining - Indonesia
- Ambuja Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Kepco SPC Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Coastal Gujarat Power Limited - India
- Altura Mining Limited, Indonesia
- Iligan Light & Power Inc, Philippines
- Interocean Group of Companies - India
- Thiess Contractors Indonesia
- GMR Energy Limited - India
- Dalmia Cement Bharat India
- Makarim & Taira - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Posco Energy - South Korea
- Vizag Seaport Private Limited - India
- Orica Australia Pty. Ltd.
- Romanian Commodities Exchange
- OPG Power Generation Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Bhushan Steel Limited - India
- Siam City Cement - Thailand
- Energy Development Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Singapore Mercantile Exchange
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Xindia Steels Limited - India
- Merrill Lynch Commodities Europe
- Heidelberg Cement - Germany
- Indian Oil Corporation Limited
- Indika Energy - Indonesia
- Larsen & Toubro Limited - India
- Marubeni Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Bharathi Cement Corporation - India
- ICICI Bank Limited - India
- Banpu Public Company Limited - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- European Bulk Services B.V. - Netherlands
- Ministry of Mines - Canada
- Power Finance Corporation Ltd., India
- The Treasury - Australian Government
- Indian Energy Exchange, India
- Timah Investasi Mineral - Indoneisa
- Wood Mackenzie - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Manunggal Multi Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- GAC Shipping (India) Pvt Ltd
- The University of Queensland
- Georgia Ports Authority, United States
- Coalindo Energy - Indonesia
- Riau Bara Harum - Indonesia
- Bulk Trading Sa - Switzerland
- Rio Tinto Coal - Australia
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- Cement Manufacturers Association - India
- Antam Resourcindo - Indonesia
- Mercator Lines Limited - India
- MS Steel International - UAE
- Binh Thuan Hamico - Vietnam
- Bangladesh Power Developement Board
- International Coal Ventures Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Leighton Contractors Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Madhucon Powers Ltd - India
- Uttam Galva Steels Limited - India
- Sical Logistics Limited - India
- Port Waratah Coal Services - Australia
- Kumho Petrochemical, South Korea
- Australian Commodity Traders Exchange
- Metalloyd Limited - United Kingdom
- Chamber of Mines of South Africa
- Kaltim Prima Coal - Indonesia
- Videocon Industries ltd - India
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- Meralco Power Generation, Philippines
- Petron Corporation, Philippines
- Independent Power Producers Association of India
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Parliament of New Zealand
- Coal and Oil Company - UAE
- McConnell Dowell - Australia
- SMC Global Power, Philippines
- Alfred C Toepfer International GmbH - Germany
- Star Paper Mills Limited - India
- Indo Tambangraya Megah - Indonesia
- ASAPP Information Group - India
- Tata Chemicals Ltd - India
- South Luzon Thermal Energy Corporation
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- Sree Jayajothi Cements Limited - India
- Thai Mozambique Logistica
- Australian Coal Association
- New Zealand Coal & Carbon
- Kalimantan Lumbung Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Edison Trading Spa - Italy
- Commonwealth Bank - Australia
- Minerals Council of Australia
- Simpson Spence & Young - Indonesia
- Electricity Generating Authority of Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Coal Council - USA
- Kapuas Tunggal Persada - Indonesia
- Sojitz Corporation - Japan
- Anglo American - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Krishnapatnam Port Company Ltd. - India
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Sidhee Cement - India
- Holcim Trading Pte Ltd - Singapore
- London Commodity Brokers - England
- Economic Council, Georgia
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- SMG Consultants - Indonesia
- GVK Power & Infra Limited - India
- Orica Mining Services - Indonesia
- Electricity Authority, New Zealand
- Karaikal Port Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- VISA Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- PowerSource Philippines DevCo
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- Indogreen Group - Indonesia
- Sarangani Energy Corporation, Philippines
- PTC India Limited - India
- Global Coal Blending Company Limited - Australia
- Malabar Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tamil Nadu electricity Board
- Bhatia International Limited - India
- Sakthi Sugars Limited - India
- Latin American Coal - Colombia
- Trasteel International SA, Italy
- IEA Clean Coal Centre - UK
- PNOC Exploration Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Price Waterhouse Coopers - Russia
- Parry Sugars Refinery, India
- Carbofer General Trading SA - India
- Mjunction Services Limited - India
- The State Trading Corporation of India Ltd
- Global Green Power PLC Corporation, Philippines
- Wilmar Investment Holdings
- LBH Netherlands Bv - Netherlands
- Siam City Cement PLC, Thailand
- Aditya Birla Group - India
- Agrawal Coal Company - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Deloitte Consulting - India
- CIMB Investment Bank - Malaysia
- Salva Resources Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Goldman Sachs - Singapore
- Ceylon Electricity Board - Sri Lanka
- Energy Link Ltd, New Zealand
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- Sindya Power Generating Company Private Ltd
- Essar Steel Hazira Ltd - India
- Central Electricity Authority - India
- Directorate Of Revenue Intelligence - India
- Semirara Mining Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Toyota Tsusho Corporation, Japan
- Globalindo Alam Lestari - Indonesia
- Medco Energi Mining Internasional
- Miang Besar Coal Terminal - Indonesia
- Borneo Indobara - Indonesia
- Ministry of Transport, Egypt
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