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