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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, 05 May 14
HUANENG CLEAN ENERGY RESEARCH INSTITUTE HAS CONFIRMED TO SPEAK AT CCF2014
Press Release: Produced by CDMC Events, The 13th Clean Coal Forum 2014 will be held on June 12,13, 2014 in Beijing, China. We are glad to invite ...
Monday, 05 May 14
SUB BIT-FOB INDONESIA COAL SWAPS LOST GROUND LAST WEEK
COALspot.com: Indonesian coal swaps for average Q3’ 2014 lost on day, week and on month according to AsiaClear OTC coal swap's reports ...
Monday, 05 May 14
API 8 CFR SOUTH CHINA COAL SWAP FOR AVERAGE Q3 14 DELIVERIES: LOST 0.82% M-O-M
COALspot.com: API 8 CFR South China Coal swaps for average Q3 14 deliveries lost 0.82 percent month on month and closed at US$ 75.20 per mt as o ...
Sunday, 04 May 14
INDONESIA TO INDIA FREIGHT RATES ARE SHOWING POSITIVE TREND
COALspot.com: The freight market is seems to be some recovery as cape index has increased by 7.84 pct week on week. Cape index closed at 1829 po ...
Friday, 02 May 14
ADARO ENERGY STARTS YEAR 2014 WELL DESPITE CURRENT MARKET CONDITIONS
COALspot.com: Adaro Energy, the second largest Indonesian coal miner's revenue increased 14% to US$ 845 million due to higher sales volume, ...
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- Deloitte Consulting - India
- London Commodity Brokers - England
- Offshore Bulk Terminal Pte Ltd, Singapore
- Uttam Galva Steels Limited - India
- Renaissance Capital - South Africa
- Indika Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Larsen & Toubro Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Bhushan Steel Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Billiton Holdings Pty Ltd - Australia
- Mercator Lines Limited - India
- SMG Consultants - Indonesia
- Oldendorff Carriers - Singapore
- Borneo Indobara - Indonesia
- Eastern Energy - Thailand
- Neyveli Lignite Corporation Ltd, - India
- AsiaOL BioFuels Corp., Philippines
- CIMB Investment Bank - Malaysia
- Planning Commission, India
- Essar Steel Hazira Ltd - India
- Directorate Of Revenue Intelligence - India
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Heidelberg Cement - Germany
- CNBM International Corporation - China
- Gujarat Mineral Development Corp Ltd - India
- Makarim & Taira - Indonesia
- Goldman Sachs - Singapore
- Medco Energi Mining Internasional
- GMR Energy Limited - India
- Toyota Tsusho Corporation, Japan
- Timah Investasi Mineral - Indoneisa
- Vizag Seaport Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Indogreen Group - Indonesia
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- Global Green Power PLC Corporation, Philippines
- Standard Chartered Bank - UAE
- Bharathi Cement Corporation - India
- Energy Link Ltd, New Zealand
- Anglo American - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Kobexindo Tractors - Indoneisa
- Sical Logistics Limited - India
- Kaltim Prima Coal - Indonesia
- Ministry of Mines - Canada
- Samtan Co., Ltd - South Korea
- Edison Trading Spa - Italy
- Cigading International Bulk Terminal - Indonesia
- India Bulls Power Limited - India
- Central Java Power - Indonesia
- Agrawal Coal Company - India
- Thai Mozambique Logistica
- International Coal Ventures Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Kapuas Tunggal Persada - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Xindia Steels Limited - India
- Trasteel International SA, Italy
- Kideco Jaya Agung - Indonesia
- GVK Power & Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
- Interocean Group of Companies - India
- Sarangani Energy Corporation, Philippines
- Attock Cement Pakistan Limited
- Energy Development Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- Savvy Resources Ltd - HongKong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Georgia Ports Authority, United States
- Siam City Cement - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Aboitiz Power Corporation - Philippines
- Cement Manufacturers Association - India
- Metalloyd Limited - United Kingdom
- Semirara Mining Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Australian Coal Association
- PetroVietnam Power Coal Import and Supply Company
- Electricity Generating Authority of Thailand
- South Luzon Thermal Energy Corporation
- Bangladesh Power Developement Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement PLC, Thailand
- Pendopo Energi Batubara - Indonesia
- Jindal Steel & Power Ltd - India
- ASAPP Information Group - India
- Sakthi Sugars Limited - India
- Sojitz Corporation - Japan
- Meralco Power Generation, Philippines
- LBH Netherlands Bv - Netherlands
- Bayan Resources Tbk. - Indonesia
- Coastal Gujarat Power Limited - India
- Africa Commodities Group - South Africa
- Barasentosa Lestari - Indonesia
- Independent Power Producers Association of India
- The State Trading Corporation of India Ltd
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- GN Power Mariveles Coal Plant, Philippines
- Indo Tambangraya Megah - Indonesia
- Coalindo Energy - Indonesia
- Gujarat Sidhee Cement - India
- Meenaskhi Energy Private Limited - India
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Thiess Contractors Indonesia
- Central Electricity Authority - India
- Commonwealth Bank - Australia
- Star Paper Mills Limited - India
- European Bulk Services B.V. - Netherlands
- Riau Bara Harum - Indonesia
- Coal and Oil Company - UAE
- Lanco Infratech Ltd - India
- Posco Energy - South Korea
- Krishnapatnam Port Company Ltd. - India
- Carbofer General Trading SA - India
- GAC Shipping (India) Pvt Ltd
- OPG Power Generation Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Sindya Power Generating Company Private Ltd
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- Ministry of Transport, Egypt
- PowerSource Philippines DevCo
- Formosa Plastics Group - Taiwan
- Antam Resourcindo - Indonesia
- Australian Commodity Traders Exchange
- IEA Clean Coal Centre - UK
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Intertek Mineral Services - Indonesia
- The Treasury - Australian Government
- SN Aboitiz Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Indian Oil Corporation Limited
- Global Coal Blending Company Limited - Australia
- Bukit Makmur.PT - Indonesia
- Chamber of Mines of South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Indonesian Coal Mining Association
- Chettinad Cement Corporation Ltd - India
- Grasim Industreis Ltd - India
- Eastern Coal Council - USA
- Orica Australia Pty. Ltd.
- Ceylon Electricity Board - Sri Lanka
- Romanian Commodities Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Power Finance Corporation Ltd., India
- Orica Mining Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Wilmar Investment Holdings
- Aditya Birla Group - India
- Rio Tinto Coal - Australia
- Petron Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Karaikal Port Pvt Ltd - India
- Tata Chemicals Ltd - India
- VISA Power Limited - India
- Singapore Mercantile Exchange
- Parliament of New Zealand
- Electricity Authority, New Zealand
- Malabar Cements Ltd - India
- Ministry of Finance - Indonesia
- White Energy Company Limited
- Globalindo Alam Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- ICICI Bank Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
- Global Business Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Wood Mackenzie - Singapore
- Ambuja Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Dalmia Cement Bharat India
- PTC India Limited - India
- Indian Energy Exchange, India
- Ind-Barath Power Infra Limited - India
- Videocon Industries ltd - India
- Madhucon Powers Ltd - India
- Latin American Coal - Colombia
- Bulk Trading Sa - Switzerland
- Karbindo Abesyapradhi - Indoneisa
- Port Waratah Coal Services - Australia
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Marubeni Corporation - India
- Therma Luzon, Inc, Philippines
- Simpson Spence & Young - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Merrill Lynch Commodities Europe
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Economic Council, Georgia
- TeaM Sual Corporation - Philippines
- Parry Sugars Refinery, India
- Kepco SPC Power Corporation, Philippines
- New Zealand Coal & Carbon
- The University of Queensland
- Minerals Council of Australia
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