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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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Thursday, 11 April 13
TNEB HAS OPENED 4.2 MILLION TONS IMPORTED COAL TENDER
COALspot.com - TANGEDCO, the state run utility TANGEDCO (formerly known as TNEB), Tamil Nadu state owned electricity company has opened bids to purc ...
Wednesday, 10 April 13
US COAL CONSUMPTION TO INCREASE FROM 889 MMST IN 2012 TO 948 MMST IN 2013 AND 957 MMST IN 2014 - EIA
Based on estimates for the first quarter of 2013, American coal production has continued to decline.
Total production is down 9.9 million short t ...
Wednesday, 10 April 13
DRY BULK FREIGHT RATES SEEN MOSTLY STABLE IN THE COMING WEEKS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS WORLDWIDE
In its latest report, BIMCO forecast that for the coming six weeks, Capesize time charter average rates will remain subdued around $4,500-8,500 per ...
Monday, 08 April 13
SUB-BIT INDONESIA COAL SWAPS: UPWARD TREND
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q2’ 2013 delivery has gained 2.71 percent and CFR South China coal shipment&nbs ...
Sunday, 07 April 13
CHARTER RATES ARE UNDER PRESSURE DUE TO DECLINING DEMAND - VISTAAR
COALspot.com - The freight market continued to fall further with all the indices down.
The BDI was down by 5.38 pct closing at 861 points and the ...
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- ASAPP Information Group - India
- Dalmia Cement Bharat India
- Trasteel International SA, Italy
- International Coal Ventures Pvt Ltd - India
- Parliament of New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coastal Gujarat Power Limited - India
- Agrawal Coal Company - India
- Singapore Mercantile Exchange
- The State Trading Corporation of India Ltd
- GMR Energy Limited - India
- Coal and Oil Company - UAE
- Lanco Infratech Ltd - India
- Latin American Coal - Colombia
- Semirara Mining Corp, Philippines
- Africa Commodities Group - South Africa
- Chettinad Cement Corporation Ltd - India
- Economic Council, Georgia
- Semirara Mining and Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Deloitte Consulting - India
- Pendopo Energi Batubara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Aditya Birla Group - India
- Essar Steel Hazira Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Bangladesh Power Developement Board
- San Jose City I Power Corp, Philippines
- SMC Global Power, Philippines
- PTC India Limited - India
- Carbofer General Trading SA - India
- Cigading International Bulk Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Bhatia International Limited - India
- India Bulls Power Limited - India
- SMG Consultants - Indonesia
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- Global Business Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Gujarat Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Jindal Steel & Power Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coalindo Energy - Indonesia
- McConnell Dowell - Australia
- Planning Commission, India
- SN Aboitiz Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Posco Energy - South Korea
- Riau Bara Harum - Indonesia
- Kaltim Prima Coal - Indonesia
- Port Waratah Coal Services - Australia
- Directorate General of MIneral and Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Banpu Public Company Limited - Thailand
- OPG Power Generation Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- PNOC Exploration Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Independent Power Producers Association of India
- Kartika Selabumi Mining - Indonesia
- Indian Energy Exchange, India
- Mintek Dendrill Indonesia
- Therma Luzon, Inc, Philippines
- Salva Resources Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Billiton Holdings Pty Ltd - Australia
- Sical Logistics Limited - India
- Petron Corporation, Philippines
- VISA Power Limited - India
- Malabar Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- PowerSource Philippines DevCo
- Bukit Asam (Persero) Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Altura Mining Limited, Indonesia
- Kideco Jaya Agung - Indonesia
- South Luzon Thermal Energy Corporation
- Edison Trading Spa - Italy
- Globalindo Alam Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- MS Steel International - UAE
- Formosa Plastics Group - Taiwan
- Sakthi Sugars Limited - India
- Attock Cement Pakistan Limited
- Sindya Power Generating Company Private Ltd
- Romanian Commodities Exchange
- Mjunction Services Limited - India
- Binh Thuan Hamico - Vietnam
- Orica Australia Pty. Ltd.
- European Bulk Services B.V. - Netherlands
- Merrill Lynch Commodities Europe
- Sojitz Corporation - Japan
- Kepco SPC Power Corporation, Philippines
- Interocean Group of Companies - India
- Intertek Mineral Services - Indonesia
- Marubeni Corporation - India
- Maheswari Brothers Coal Limited - India
- White Energy Company Limited
- TeaM Sual Corporation - Philippines
- Thiess Contractors Indonesia
- Bharathi Cement Corporation - India
- Parry Sugars Refinery, India
- Central Java Power - Indonesia
- Ministry of Transport, Egypt
- The University of Queensland
- Makarim & Taira - Indonesia
- The Treasury - Australian Government
- CIMB Investment Bank - Malaysia
- Siam City Cement - Thailand
- Baramulti Group, Indonesia
- Krishnapatnam Port Company Ltd. - India
- IEA Clean Coal Centre - UK
- Wood Mackenzie - Singapore
- Oldendorff Carriers - Singapore
- Central Electricity Authority - India
- Straits Asia Resources Limited - Singapore
- Timah Investasi Mineral - Indoneisa
- IHS Mccloskey Coal Group - USA
- Thai Mozambique Logistica
- New Zealand Coal & Carbon
- LBH Netherlands Bv - Netherlands
- Ministry of Finance - Indonesia
- Rio Tinto Coal - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Sree Jayajothi Cements Limited - India
- Bukit Makmur.PT - Indonesia
- Indian Oil Corporation Limited
- Indo Tambangraya Megah - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indogreen Group - Indonesia
- Bulk Trading Sa - Switzerland
- Borneo Indobara - Indonesia
- Australian Coal Association
- Anglo American - United Kingdom
- Uttam Galva Steels Limited - India
- Ministry of Mines - Canada
- Antam Resourcindo - Indonesia
- Siam City Cement PLC, Thailand
- Karaikal Port Pvt Ltd - India
- Wilmar Investment Holdings
- Heidelberg Cement - Germany
- London Commodity Brokers - England
- Larsen & Toubro Limited - India
- Iligan Light & Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Kumho Petrochemical, South Korea
- Meralco Power Generation, Philippines
- Electricity Authority, New Zealand
- Energy Development Corp, Philippines
- Mercuria Energy - Indonesia
- Barasentosa Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Medco Energi Mining Internasional
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- Vizag Seaport Private Limited - India
- Simpson Spence & Young - Indonesia
- Kobexindo Tractors - Indoneisa
- Savvy Resources Ltd - HongKong
- Renaissance Capital - South Africa
- Star Paper Mills Limited - India
- Minerals Council of Australia
- Manunggal Multi Energi - Indonesia
- Mercator Lines Limited - India
- Standard Chartered Bank - UAE
- Rashtriya Ispat Nigam Limited - India
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- Meenaskhi Energy Private Limited - India
- Toyota Tsusho Corporation, Japan
- Sinarmas Energy and Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Australian Commodity Traders Exchange
- GAC Shipping (India) Pvt Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indika Energy - Indonesia
- Cement Manufacturers Association - India
- Vijayanagar Sugar Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Grasim Industreis Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tata Chemicals Ltd - India
- Orica Mining Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Samtan Co., Ltd - South Korea
- CNBM International Corporation - China
- Gujarat Mineral Development Corp Ltd - India
- Indonesian Coal Mining Association
- Gujarat Sidhee Cement - India
- Georgia Ports Authority, United States
- Maharashtra Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Holcim Trading Pte Ltd - Singapore
- Bhushan Steel Limited - India
- Videocon Industries ltd - India
- GVK Power & Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Madhucon Powers Ltd - India
- ICICI Bank Limited - India
- Miang Besar Coal Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Energy - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Jaiprakash Power Ventures ltd
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