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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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Friday, 07 August 20
PEABODY'S $1.42 BILLION WRITE-DOWN CONCEDES COAL MINES HAVE LITTLE VALUE AND DIM FUTURE - IEEFA
Trouble at biggest mine in Powder River Basin speaks volumes about state of industry
Peabody Energy, the world’s largest priva ...
Thursday, 06 August 20
SUPRAMAX MARKET CONTINUED SIDEWAYS TREND, AND LITTLE INSPIRING NEWS APPEAR - FEARNLEYS
Capesize
There is presently a small correction in rates, but overall levels are up from previous week mainly due to increased demand in the Eas ...
Thursday, 06 August 20
KOREA SOUTH-EAST POWER INVITING BIDS FOR MIN 3,600-MAX 3,800 NCV COAL
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) inviting bids for 80,000 Tons (MT) Min 3,600~Max 3,800 kcal/kg NCV coal f ...
Wednesday, 05 August 20
NO NEW MINING LICENSES - A REMINDER TO GOVERNORS IN INDONESIA - SSEK
Indonesia’s acting Director General of Mining and Coal (“DGMC”) has issued a letter to the country’s provincial Governors t ...
Wednesday, 05 August 20
AUGUST 2020 HBA HITTING ITS LOWEST LEVELS IN HISTORY
COALspot.com: The Indonesia Coal Price Reference for the month of August plunged 30.73% YoY, hitting its lowest levels in history and highlighting ...
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- GN Power Mariveles Coal Plant, Philippines
- Indian Oil Corporation Limited
- Ministry of Finance - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Wilmar Investment Holdings
- Leighton Contractors Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Banpu Public Company Limited - Thailand
- Antam Resourcindo - Indonesia
- Siam City Cement PLC, Thailand
- Mercator Lines Limited - India
- Sakthi Sugars Limited - India
- Essar Steel Hazira Ltd - India
- South Luzon Thermal Energy Corporation
- GAC Shipping (India) Pvt Ltd
- Australian Coal Association
- Electricity Generating Authority of Thailand
- Binh Thuan Hamico - Vietnam
- Attock Cement Pakistan Limited
- SMG Consultants - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Sree Jayajothi Cements Limited - India
- Vedanta Resources Plc - India
- Coalindo Energy - Indonesia
- Orica Australia Pty. Ltd.
- Vijayanagar Sugar Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Barasentosa Lestari - Indonesia
- The Treasury - Australian Government
- Pipit Mutiara Jaya. PT, Indonesia
- Parliament of New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- The University of Queensland
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- Karaikal Port Pvt Ltd - India
- Thiess Contractors Indonesia
- Standard Chartered Bank - UAE
- Aboitiz Power Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Heidelberg Cement - Germany
- Intertek Mineral Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Rio Tinto Coal - Australia
- Karbindo Abesyapradhi - Indoneisa
- ASAPP Information Group - India
- Rashtriya Ispat Nigam Limited - India
- Grasim Industreis Ltd - India
- Lanco Infratech Ltd - India
- TeaM Sual Corporation - Philippines
- Renaissance Capital - South Africa
- Ministry of Mines - Canada
- Merrill Lynch Commodities Europe
- Straits Asia Resources Limited - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- PNOC Exploration Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Latin American Coal - Colombia
- Bhatia International Limited - India
- Globalindo Alam Lestari - Indonesia
- Minerals Council of Australia
- Ambuja Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Mercuria Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Larsen & Toubro Limited - India
- ICICI Bank Limited - India
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Jaiprakash Power Ventures ltd
- CIMB Investment Bank - Malaysia
- Formosa Plastics Group - Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- GVK Power & Infra Limited - India
- Makarim & Taira - Indonesia
- Bayan Resources Tbk. - Indonesia
- Central Electricity Authority - India
- Agrawal Coal Company - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Edison Trading Spa - Italy
- India Bulls Power Limited - India
- Deloitte Consulting - India
- Ministry of Transport, Egypt
- Aditya Birla Group - India
- Iligan Light & Power Inc, Philippines
- Sical Logistics Limited - India
- Timah Investasi Mineral - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- PowerSource Philippines DevCo
- Goldman Sachs - Singapore
- IEA Clean Coal Centre - UK
- Eastern Coal Council - USA
- Gujarat Sidhee Cement - India
- VISA Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Kideco Jaya Agung - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bhoruka Overseas - Indonesia
- European Bulk Services B.V. - Netherlands
- Carbofer General Trading SA - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Tata Chemicals Ltd - India
- Africa Commodities Group - South Africa
- Tamil Nadu electricity Board
- Economic Council, Georgia
- Energy Development Corp, Philippines
- Energy Link Ltd, New Zealand
- Eastern Energy - Thailand
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Singapore Mercantile Exchange
- Alfred C Toepfer International GmbH - Germany
- Samtan Co., Ltd - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- Global Green Power PLC Corporation, Philippines
- Medco Energi Mining Internasional
- Billiton Holdings Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- New Zealand Coal & Carbon
- McConnell Dowell - Australia
- Sojitz Corporation - Japan
- Bukit Makmur.PT - Indonesia
- Baramulti Group, Indonesia
- GMR Energy Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petron Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Parry Sugars Refinery, India
- Directorate General of MIneral and Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Star Paper Mills Limited - India
- Cement Manufacturers Association - India
- Madhucon Powers Ltd - India
- Toyota Tsusho Corporation, Japan
- The State Trading Corporation of India Ltd
- Indogreen Group - Indonesia
- Ceylon Electricity Board - Sri Lanka
- PTC India Limited - India
- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- Semirara Mining Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Global Coal Blending Company Limited - Australia
- Romanian Commodities Exchange
- Siam City Cement - Thailand
- Malabar Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Bhushan Steel Limited - India
- London Commodity Brokers - England
- Petrochimia International Co. Ltd.- Taiwan
- Uttam Galva Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Marubeni Corporation - India
- Gujarat Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Interocean Group of Companies - India
- Bulk Trading Sa - Switzerland
- Coal and Oil Company - UAE
- Indika Energy - Indonesia
- Anglo American - United Kingdom
- MS Steel International - UAE
- Mjunction Services Limited - India
- Trasteel International SA, Italy
- TNB Fuel Sdn Bhd - Malaysia
- Orica Mining Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- International Coal Ventures Pvt Ltd - India
- Wood Mackenzie - Singapore
- Bukit Baiduri Energy - Indonesia
- CNBM International Corporation - China
- Simpson Spence & Young - Indonesia
- Manunggal Multi Energi - Indonesia
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- Savvy Resources Ltd - HongKong
- Price Waterhouse Coopers - Russia
- Georgia Ports Authority, United States
- Australian Commodity Traders Exchange
- Salva Resources Pvt Ltd - India
- Independent Power Producers Association of India
- Xindia Steels Limited - India
- Port Waratah Coal Services - Australia
- Planning Commission, India
- SMC Global Power, Philippines
- Power Finance Corporation Ltd., India
- Kumho Petrochemical, South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thai Mozambique Logistica
- Coastal Gujarat Power Limited - India
- Videocon Industries ltd - India
- Electricity Authority, New Zealand
- Metalloyd Limited - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Bangladesh Power Developement Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Therma Luzon, Inc, Philippines
- Central Java Power - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Maheswari Brothers Coal Limited - India
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