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