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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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Sunday, 26 April 20
STRONGER BUNKER PRICES FAIL TO RALLY FREIGHT MARKET - FIS
VLSFO bunker prices rebounded by $22.50 to $229/mt in the port of Singapore but failed to turn around the spot freight market.
Some ...
Saturday, 25 April 20
KOREA SOUTH-EAST POWER CO. INVITED BIDS FOR 780K - 900K MT OF 5600 NCV COAL FOR JULY TO OCTOBER 2020 LOADING
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 780,000~900,000 Metric Tons (MT) s ...
Saturday, 25 April 20
SEAFARER MENTAL WELLBEING DURING THE COVID-19 PANDEMIC - STANDARD CLUB
KNOWLEDGE TO ELEVATE
COVID-19 has forced many parts of the world to enforce a lockdown in a bid to flatten the curve in terms of transmissions ...
Friday, 24 April 20
KOMIPO INVITED BIDS FOR 5700 NAR COAL FOR JUNE & JULY LOADING
COALspot.com: South Korea’s Korea Midland Power Co. Ltd. (KOMIPO) Has Issued An International Tender For 260,000 Metric Tons (MT) Steam Coal ...
Friday, 24 April 20
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remained flat during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
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- Merrill Lynch Commodities Europe
- Eastern Energy - Thailand
- Rio Tinto Coal - Australia
- Formosa Plastics Group - Taiwan
- Maheswari Brothers Coal Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Heidelberg Cement - Germany
- Intertek Mineral Services - Indonesia
- Bangladesh Power Developement Board
- Bhatia International Limited - India
- Timah Investasi Mineral - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Simpson Spence & Young - Indonesia
- Deloitte Consulting - India
- Ind-Barath Power Infra Limited - India
- Uttam Galva Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- PNOC Exploration Corporation - Philippines
- Xindia Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bulk Trading Sa - Switzerland
- Kideco Jaya Agung - Indonesia
- Indian Oil Corporation Limited
- Australian Coal Association
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Savvy Resources Ltd - HongKong
- Indian Energy Exchange, India
- CNBM International Corporation - China
- Bahari Cakrawala Sebuku - Indonesia
- Tata Chemicals Ltd - India
- Altura Mining Limited, Indonesia
- Planning Commission, India
- Edison Trading Spa - Italy
- Parry Sugars Refinery, India
- Singapore Mercantile Exchange
- Central Java Power - Indonesia
- Billiton Holdings Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Indonesian Coal Mining Association
- Global Business Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Latin American Coal - Colombia
- Coastal Gujarat Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Carbofer General Trading SA - India
- Aditya Birla Group - India
- Straits Asia Resources Limited - Singapore
- Goldman Sachs - Singapore
- Madhucon Powers Ltd - India
- Cement Manufacturers Association - India
- Aboitiz Power Corporation - Philippines
- Port Waratah Coal Services - Australia
- Barasentosa Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Energy Development Corp, Philippines
- Bharathi Cement Corporation - India
- Independent Power Producers Association of India
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Attock Cement Pakistan Limited
- Borneo Indobara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sojitz Corporation - Japan
- Electricity Authority, New Zealand
- SMG Consultants - Indonesia
- Salva Resources Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Ministry of Transport, Egypt
- Bayan Resources Tbk. - Indonesia
- Essar Steel Hazira Ltd - India
- Ministry of Finance - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Oldendorff Carriers - Singapore
- Kumho Petrochemical, South Korea
- Makarim & Taira - Indonesia
- San Jose City I Power Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- PetroVietnam Power Coal Import and Supply Company
- Wilmar Investment Holdings
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kartika Selabumi Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- London Commodity Brokers - England
- GMR Energy Limited - India
- Mercator Lines Limited - India
- MS Steel International - UAE
- GN Power Mariveles Coal Plant, Philippines
- Metalloyd Limited - United Kingdom
- Bukit Makmur.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Holcim Trading Pte Ltd - Singapore
- Directorate Of Revenue Intelligence - India
- Mercuria Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Bhoruka Overseas - Indonesia
- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- New Zealand Coal & Carbon
- Lanco Infratech Ltd - India
- Posco Energy - South Korea
- Pendopo Energi Batubara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Thai Mozambique Logistica
- Central Electricity Authority - India
- TeaM Sual Corporation - Philippines
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- Commonwealth Bank - Australia
- GVK Power & Infra Limited - India
- Riau Bara Harum - Indonesia
- Mjunction Services Limited - India
- Standard Chartered Bank - UAE
- Economic Council, Georgia
- Medco Energi Mining Internasional
- Asmin Koalindo Tuhup - Indonesia
- VISA Power Limited - India
- Australian Commodity Traders Exchange
- Directorate General of MIneral and Coal - Indonesia
- McConnell Dowell - Australia
- Orica Australia Pty. Ltd.
- Renaissance Capital - South Africa
- Meenaskhi Energy Private Limited - India
- Samtan Co., Ltd - South Korea
- PTC India Limited - India
- Eastern Coal Council - USA
- Miang Besar Coal Terminal - Indonesia
- Dalmia Cement Bharat India
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- White Energy Company Limited
- Manunggal Multi Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indogreen Group - Indonesia
- Gujarat Sidhee Cement - India
- Siam City Cement PLC, Thailand
- Larsen & Toubro Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Baramulti Group, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Toyota Tsusho Corporation, Japan
- Karbindo Abesyapradhi - Indoneisa
- The Treasury - Australian Government
- Mintek Dendrill Indonesia
- Trasteel International SA, Italy
- Indo Tambangraya Megah - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Binh Thuan Hamico - Vietnam
- Africa Commodities Group - South Africa
- Thiess Contractors Indonesia
- Ambuja Cements Ltd - India
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- PowerSource Philippines DevCo
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- Wood Mackenzie - Singapore
- Coalindo Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Bukit Baiduri Energy - Indonesia
- Energy Link Ltd, New Zealand
- Sindya Power Generating Company Private Ltd
- Maharashtra Electricity Regulatory Commission - India
- The University of Queensland
- Chamber of Mines of South Africa
- LBH Netherlands Bv - Netherlands
- Semirara Mining Corp, Philippines
- Jindal Steel & Power Ltd - India
- International Coal Ventures Pvt Ltd - India
- Parliament of New Zealand
- IHS Mccloskey Coal Group - USA
- Coal and Oil Company - UAE
- ICICI Bank Limited - India
- Tamil Nadu electricity Board
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
- Power Finance Corporation Ltd., India
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Kepco SPC Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Alfred C Toepfer International GmbH - Germany
- Globalindo Alam Lestari - Indonesia
- Indika Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Marubeni Corporation - India
- Anglo American - United Kingdom
- SMC Global Power, Philippines
- Videocon Industries ltd - India
- IEA Clean Coal Centre - UK
- Sinarmas Energy and Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- OPG Power Generation Pvt Ltd - India
- Electricity Generating Authority of Thailand
- India Bulls Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Petron Corporation, Philippines
- Agrawal Coal Company - India
- Therma Luzon, Inc, Philippines
- Star Paper Mills Limited - India
- Kobexindo Tractors - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Sical Logistics Limited - India
- Karaikal Port Pvt Ltd - India
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