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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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Tuesday, 30 July 13
KOMIPO INVITES BIDS FOR 520,000 MT OF 5,700 KCAL/KG COAL ON NAR BASIS FOR H1, 2014
COALspot.com : Korea Midland Power Co., Ltd. has invited bids for 520,000 Metric Tons (MT) of coal with calorific value 5,700 kcal/kg on NAR basis f ...
Tuesday, 30 July 13
AUSTRALIA'S NEWCASTLE SHIPPED 12.58 PERCENT LESS COAL W-O-W
COALspot.com: Newcastle port in Australia has loaded 2,945,848 tons of coal for the week ended 0700 hours 29 July 2013, Newcastle Port Corp. s ...
Monday, 29 July 13
INDONESIA'S ENERGY NEEDS COULD SPELL GOOD NEWS FOR TANKER OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite abundant energy resources, Indonesia has still failed meet its own demand, which led to a rising import of crude. According to the latest we ...
Sunday, 28 July 13
SUB-BIT INDONESIA COAL SWAP UP SLIGHTLY FOR SEPTEMBER CARGOES
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average September 2013 delivery slightly up on day and week but fell on month on ...
Saturday, 27 July 13
CEPL INDIA TO BAG 0.3 MILLION TONS OF COAL SUPPLY ORDER FROM TNPL
COALspot.com - An India based coal trader Coastal Energy Private Limited has offered the lowest price of US$ 73.00 per metric ton for calorific valu ...
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- GAC Shipping (India) Pvt Ltd
- Karbindo Abesyapradhi - Indoneisa
- Grasim Industreis Ltd - India
- Global Business Power Corporation, Philippines
- Australian Coal Association
- ASAPP Information Group - India
- Sree Jayajothi Cements Limited - India
- Electricity Generating Authority of Thailand
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Sidhee Cement - India
- Essar Steel Hazira Ltd - India
- Intertek Mineral Services - Indonesia
- Ministry of Finance - Indonesia
- Heidelberg Cement - Germany
- Therma Luzon, Inc, Philippines
- Price Waterhouse Coopers - Russia
- Orica Australia Pty. Ltd.
- Savvy Resources Ltd - HongKong
- Port Waratah Coal Services - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- MS Steel International - UAE
- Eastern Coal Council - USA
- Indian Energy Exchange, India
- PetroVietnam Power Coal Import and Supply Company
- New Zealand Coal & Carbon
- PNOC Exploration Corporation - Philippines
- Meralco Power Generation, Philippines
- Metalloyd Limited - United Kingdom
- PTC India Limited - India
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
- Mercator Lines Limited - India
- Global Green Power PLC Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Kideco Jaya Agung - Indonesia
- Barasentosa Lestari - Indonesia
- Xindia Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Petron Corporation, Philippines
- Ambuja Cements Ltd - India
- GMR Energy Limited - India
- Australian Commodity Traders Exchange
- Antam Resourcindo - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Global Coal Blending Company Limited - Australia
- LBH Netherlands Bv - Netherlands
- Georgia Ports Authority, United States
- Riau Bara Harum - Indonesia
- Posco Energy - South Korea
- Timah Investasi Mineral - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- Indo Tambangraya Megah - Indonesia
- The Treasury - Australian Government
- Planning Commission, India
- Pendopo Energi Batubara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- McConnell Dowell - Australia
- Anglo American - United Kingdom
- Thiess Contractors Indonesia
- Uttam Galva Steels Limited - India
- Vedanta Resources Plc - India
- GVK Power & Infra Limited - India
- Toyota Tsusho Corporation, Japan
- IHS Mccloskey Coal Group - USA
- Samtan Co., Ltd - South Korea
- Economic Council, Georgia
- Kartika Selabumi Mining - Indonesia
- Thai Mozambique Logistica
- SMG Consultants - Indonesia
- Sojitz Corporation - Japan
- Kumho Petrochemical, South Korea
- Billiton Holdings Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- Kaltim Prima Coal - Indonesia
- Romanian Commodities Exchange
- Sindya Power Generating Company Private Ltd
- International Coal Ventures Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Miang Besar Coal Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Ministry of Mines - Canada
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- White Energy Company Limited
- Tamil Nadu electricity Board
- Malabar Cements Ltd - India
- Bhatia International Limited - India
- Interocean Group of Companies - India
- Bhoruka Overseas - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Carbofer General Trading SA - India
- Mjunction Services Limited - India
- CNBM International Corporation - China
- Singapore Mercantile Exchange
- Aboitiz Power Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Indogreen Group - Indonesia
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Altura Mining Limited, Indonesia
- VISA Power Limited - India
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coal and Oil Company - UAE
- Vizag Seaport Private Limited - India
- Oldendorff Carriers - Singapore
- Leighton Contractors Pty Ltd - Australia
- Energy Development Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Eastern Energy - Thailand
- Bulk Trading Sa - Switzerland
- Coalindo Energy - Indonesia
- Baramulti Group, Indonesia
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- Krishnapatnam Port Company Ltd. - India
- Rio Tinto Coal - Australia
- SN Aboitiz Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Maheswari Brothers Coal Limited - India
- Edison Trading Spa - Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mintek Dendrill Indonesia
- Banpu Public Company Limited - Thailand
- Holcim Trading Pte Ltd - Singapore
- Chamber of Mines of South Africa
- Latin American Coal - Colombia
- Madhucon Powers Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Marubeni Corporation - India
- Jaiprakash Power Ventures ltd
- Kalimantan Lumbung Energi - Indonesia
- Minerals Council of Australia
- India Bulls Power Limited - India
- Jindal Steel & Power Ltd - India
- Videocon Industries ltd - India
- Chettinad Cement Corporation Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Medco Energi Mining Internasional
- Jorong Barutama Greston.PT - Indonesia
- SMC Global Power, Philippines
- Semirara Mining Corp, Philippines
- Africa Commodities Group - South Africa
- Siam City Cement PLC, Thailand
- Goldman Sachs - Singapore
- Standard Chartered Bank - UAE
- OPG Power Generation Pvt Ltd - India
- Orica Mining Services - Indonesia
- Ind-Barath Power Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Coastal Gujarat Power Limited - India
- Ministry of Transport, Egypt
- Salva Resources Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- The State Trading Corporation of India Ltd
- Commonwealth Bank - Australia
- Indian Oil Corporation Limited
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Trasteel International SA, Italy
- Power Finance Corporation Ltd., India
- Gujarat Mineral Development Corp Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Manunggal Multi Energi - Indonesia
- PowerSource Philippines DevCo
- Wood Mackenzie - Singapore
- Simpson Spence & Young - Indonesia
- Cement Manufacturers Association - India
- Directorate Of Revenue Intelligence - India
- TeaM Sual Corporation - Philippines
- Mercuria Energy - Indonesia
- Independent Power Producers Association of India
- Straits Asia Resources Limited - Singapore
- Iligan Light & Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Attock Cement Pakistan Limited
- Kohat Cement Company Ltd. - Pakistan
- ICICI Bank Limited - India
- Makarim & Taira - Indonesia
- IEA Clean Coal Centre - UK
- Central Electricity Authority - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karaikal Port Pvt Ltd - India
- Agrawal Coal Company - India
- Bangladesh Power Developement Board
- Sical Logistics Limited - India
- Aditya Birla Group - India
- The University of Queensland
- Meenaskhi Energy Private Limited - India
- Bharathi Cement Corporation - India
- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- Larsen & Toubro Limited - India
- Deloitte Consulting - India
- London Commodity Brokers - England
- Parliament of New Zealand
- Parry Sugars Refinery, India
- Tata Chemicals Ltd - India
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- Indika Energy - Indonesia
- CIMB Investment Bank - Malaysia
- European Bulk Services B.V. - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Dalmia Cement Bharat India
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