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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, 10 February 14
Q1 2015, API 8 CFR SOUTH CHINA COAL SWAP CLOSED AROUND $ 2 HIGHER THAN Q2 14 PRICE
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 delivery lost 2.61 percent month on month and closed at US$ 77.28 per mt as on Frid ...
Monday, 10 February 14
SUPRAMAX STILL AT AROUND US$ 5K + BB 50K DELIVERY KALIMANTAN FOR A TRIP TO INDIA - CAPT. REDDY
COALspot.com: The BDI was down by 1.71 pct and closed at 1091 points week ended 7 February 2014. The BDI seemed to reach the bottom as the cape inde ...
Saturday, 08 February 14
U.S PRODUCED 84.5 MMMST OF COAL IN JANUARY; 2.05% UP MONTH ON MONTH, EIA SAYS
COALspot.com – United States the world’s second largest coal producer, produced approximately 18.8 million short tons (mmst) of coal in ...
Friday, 07 February 14
DRY BULK MARKET ON ' REVERSE' MODE DUE TO CHINESE HOLIDAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept its uninspiring mood throughout yet another week, with the Baltic Dry Index (BDI) hovering slightly above the 1,000-poi ...
Thursday, 06 February 14
INDONESIA'S BAN ON THE EXPORT OF RAW MINERAL ORES COMES INTO FORCE - INCE & CO
COALspot.com: On 12 January 2014, the ban on the export of unprocessed mineral ores came into effect in Indonesia. This ban enforces the Mining Law ...
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- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Attock Cement Pakistan Limited
- Georgia Ports Authority, United States
- London Commodity Brokers - England
- Carbofer General Trading SA - India
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- India Bulls Power Limited - India
- Vizag Seaport Private Limited - India
- Deloitte Consulting - India
- Economic Council, Georgia
- Binh Thuan Hamico - Vietnam
- Heidelberg Cement - Germany
- Chettinad Cement Corporation Ltd - India
- Riau Bara Harum - Indonesia
- IEA Clean Coal Centre - UK
- Siam City Cement - Thailand
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Electricity Generating Authority of Thailand
- Mjunction Services Limited - India
- Ministry of Mines - Canada
- Bank of Tokyo Mitsubishi UFJ Ltd
- Manunggal Multi Energi - Indonesia
- Dalmia Cement Bharat India
- Barasentosa Lestari - Indonesia
- Standard Chartered Bank - UAE
- Ministry of Finance - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Sidhee Cement - India
- Global Coal Blending Company Limited - Australia
- European Bulk Services B.V. - Netherlands
- Posco Energy - South Korea
- Aboitiz Power Corporation - Philippines
- Larsen & Toubro Limited - India
- GAC Shipping (India) Pvt Ltd
- The University of Queensland
- Central Java Power - Indonesia
- PowerSource Philippines DevCo
- Grasim Industreis Ltd - India
- Petron Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Neyveli Lignite Corporation Ltd, - India
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- New Zealand Coal & Carbon
- Aditya Birla Group - India
- Vedanta Resources Plc - India
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Indo Tambangraya Megah - Indonesia
- Bulk Trading Sa - Switzerland
- Eastern Energy - Thailand
- Indonesian Coal Mining Association
- Independent Power Producers Association of India
- TeaM Sual Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Makmur.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Ind-Barath Power Infra Limited - India
- Cement Manufacturers Association - India
- McConnell Dowell - Australia
- Renaissance Capital - South Africa
- Central Electricity Authority - India
- Orica Mining Services - Indonesia
- Metalloyd Limited - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Thiess Contractors Indonesia
- MS Steel International - UAE
- Goldman Sachs - Singapore
- SMC Global Power, Philippines
- Baramulti Group, Indonesia
- Australian Commodity Traders Exchange
- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Singapore Mercantile Exchange
- Ambuja Cements Ltd - India
- ICICI Bank Limited - India
- Krishnapatnam Port Company Ltd. - India
- Karaikal Port Pvt Ltd - India
- Mintek Dendrill Indonesia
- Electricity Authority, New Zealand
- Edison Trading Spa - Italy
- Malabar Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- PetroVietnam Power Coal Import and Supply Company
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Videocon Industries ltd - India
- Australian Coal Association
- Coal and Oil Company - UAE
- Xindia Steels Limited - India
- Borneo Indobara - Indonesia
- Star Paper Mills Limited - India
- Orica Australia Pty. Ltd.
- VISA Power Limited - India
- Indian Energy Exchange, India
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- Interocean Group of Companies - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chamber of Mines of South Africa
- Alfred C Toepfer International GmbH - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Wilmar Investment Holdings
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- Rio Tinto Coal - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Uttam Galva Steels Limited - India
- San Jose City I Power Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Tamil Nadu electricity Board
- Altura Mining Limited, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Kideco Jaya Agung - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- LBH Netherlands Bv - Netherlands
- Therma Luzon, Inc, Philippines
- Energy Link Ltd, New Zealand
- PTC India Limited - India
- Pendopo Energi Batubara - Indonesia
- Sical Logistics Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Samtan Co., Ltd - South Korea
- Sarangani Energy Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Merrill Lynch Commodities Europe
- Kapuas Tunggal Persada - Indonesia
- Romanian Commodities Exchange
- Kepco SPC Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Parliament of New Zealand
- Bhoruka Overseas - Indonesia
- Commonwealth Bank - Australia
- Bhushan Steel Limited - India
- CIMB Investment Bank - Malaysia
- Africa Commodities Group - South Africa
- Indika Energy - Indonesia
- Agrawal Coal Company - India
- Sree Jayajothi Cements Limited - India
- Latin American Coal - Colombia
- Global Green Power PLC Corporation, Philippines
- Sojitz Corporation - Japan
- CNBM International Corporation - China
- ASAPP Information Group - India
- White Energy Company Limited
- Anglo American - United Kingdom
- Jaiprakash Power Ventures ltd
- Savvy Resources Ltd - HongKong
- Siam City Cement PLC, Thailand
- Oldendorff Carriers - Singapore
- Simpson Spence & Young - Indonesia
- OPG Power Generation Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Antam Resourcindo - Indonesia
- Lanco Infratech Ltd - India
- Intertek Mineral Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Formosa Plastics Group - Taiwan
- Medco Energi Mining Internasional
- Minerals Council of Australia
- Port Waratah Coal Services - Australia
- Parry Sugars Refinery, India
- Sakthi Sugars Limited - India
- SN Aboitiz Power Inc, Philippines
- SMG Consultants - Indonesia
- Power Finance Corporation Ltd., India
- Tata Chemicals Ltd - India
- Energy Development Corp, Philippines
- Thai Mozambique Logistica
- Billiton Holdings Pty Ltd - Australia
- Ministry of Transport, Egypt
- Kartika Selabumi Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
- Marubeni Corporation - India
- Globalindo Alam Lestari - Indonesia
- GMR Energy Limited - India
- Mercator Lines Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coastal Gujarat Power Limited - India
- Madhucon Powers Ltd - India
- Global Business Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- Miang Besar Coal Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Trasteel International SA, Italy
- Meenaskhi Energy Private Limited - India
- Eastern Coal Council - USA
- South Luzon Thermal Energy Corporation
- Kumho Petrochemical, South Korea
- Meralco Power Generation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Makarim & Taira - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- The State Trading Corporation of India Ltd
- Planning Commission, India
- Indogreen Group - Indonesia
- Bangladesh Power Developement Board
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