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