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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, 09 January 20
SUPRAMAX: A NUMBER OF INDONESIAN ROUND TRIPS WERE REPORTED AT BELLOW USD 5,000 PD LEVELS - FEARNLEYS
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JANUARY INDONESIAN COAL PRICE REFERENCE SLIPS US$ 0.37 MOM
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- Miang Besar Coal Terminal - Indonesia
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- Semirara Mining Corp, Philippines
- Edison Trading Spa - Italy
- PowerSource Philippines DevCo
- Kartika Selabumi Mining - Indonesia
- Mintek Dendrill Indonesia
- Coal and Oil Company - UAE
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- Standard Chartered Bank - UAE
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- Vizag Seaport Private Limited - India
- Independent Power Producers Association of India
- Wilmar Investment Holdings
- Jaiprakash Power Ventures ltd
- Indonesian Coal Mining Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Sakthi Sugars Limited - India
- Straits Asia Resources Limited - Singapore
- Riau Bara Harum - Indonesia
- Heidelberg Cement - Germany
- Economic Council, Georgia
- Pendopo Energi Batubara - Indonesia
- Bangladesh Power Developement Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thai Mozambique Logistica
- Malabar Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Price Waterhouse Coopers - Russia
- Indika Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- The State Trading Corporation of India Ltd
- Videocon Industries ltd - India
- Energy Link Ltd, New Zealand
- Samtan Co., Ltd - South Korea
- Iligan Light & Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Indogreen Group - Indonesia
- Eastern Energy - Thailand
- LBH Netherlands Bv - Netherlands
- Coastal Gujarat Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Sical Logistics Limited - India
- Borneo Indobara - Indonesia
- Indo Tambangraya Megah - Indonesia
- CNBM International Corporation - China
- The Treasury - Australian Government
- Siam City Cement PLC, Thailand
- Parry Sugars Refinery, India
- Mercuria Energy - Indonesia
- Bhatia International Limited - India
- Barasentosa Lestari - Indonesia
- Bharathi Cement Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Toyota Tsusho Corporation, Japan
- Alfred C Toepfer International GmbH - Germany
- New Zealand Coal & Carbon
- Cigading International Bulk Terminal - Indonesia
- Interocean Group of Companies - India
- Commonwealth Bank - Australia
- Orica Australia Pty. Ltd.
- Chamber of Mines of South Africa
- Africa Commodities Group - South Africa
- Bukit Baiduri Energy - Indonesia
- Merrill Lynch Commodities Europe
- Lanco Infratech Ltd - India
- Posco Energy - South Korea
- Sinarmas Energy and Mining - Indonesia
- Trasteel International SA, Italy
- TNB Fuel Sdn Bhd - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Uttam Galva Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- The University of Queensland
- Sojitz Corporation - Japan
- Electricity Generating Authority of Thailand
- Baramulti Group, Indonesia
- Cement Manufacturers Association - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Kobexindo Tractors - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Larsen & Toubro Limited - India
- Global Business Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Orica Mining Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Billiton Holdings Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Minerals Council of Australia
- Essar Steel Hazira Ltd - India
- Makarim & Taira - Indonesia
- Medco Energi Mining Internasional
- Attock Cement Pakistan Limited
- ICICI Bank Limited - India
- Karaikal Port Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Kepco SPC Power Corporation, Philippines
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Power Finance Corporation Ltd., India
- Gujarat Sidhee Cement - India
- Sree Jayajothi Cements Limited - India
- GMR Energy Limited - India
- Simpson Spence & Young - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Georgia Ports Authority, United States
- Latin American Coal - Colombia
- OPG Power Generation Pvt Ltd - India
- Madhucon Powers Ltd - India
- Agrawal Coal Company - India
- Wood Mackenzie - Singapore
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- London Commodity Brokers - England
- Mjunction Services Limited - India
- Kideco Jaya Agung - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- International Coal Ventures Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Rio Tinto Coal - Australia
- GVK Power & Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- Renaissance Capital - South Africa
- Thiess Contractors Indonesia
- Eastern Coal Council - USA
- Timah Investasi Mineral - Indoneisa
- Tamil Nadu electricity Board
- Vedanta Resources Plc - India
- Bayan Resources Tbk. - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Planning Commission, India
- Parliament of New Zealand
- Rashtriya Ispat Nigam Limited - India
- Goldman Sachs - Singapore
- Australian Commodity Traders Exchange
- Global Green Power PLC Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Kaltim Prima Coal - Indonesia
- Coalindo Energy - Indonesia
- Xindia Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Ministry of Transport, Egypt
- Altura Mining Limited, Indonesia
- SMC Global Power, Philippines
- Dalmia Cement Bharat India
- South Luzon Thermal Energy Corporation
- Central Java Power - Indonesia
- Port Waratah Coal Services - Australia
- Maheswari Brothers Coal Limited - India
- Tata Chemicals Ltd - India
- Bulk Trading Sa - Switzerland
- Jorong Barutama Greston.PT - Indonesia
- Intertek Mineral Services - Indonesia
- McConnell Dowell - Australia
- Ind-Barath Power Infra Limited - India
- Central Electricity Authority - India
- Energy Development Corp, Philippines
- Indian Energy Exchange, India
- Marubeni Corporation - India
- Banpu Public Company Limited - Thailand
- Siam City Cement - Thailand
- CIMB Investment Bank - Malaysia
- Oldendorff Carriers - Singapore
- Sarangani Energy Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Ministry of Mines - Canada
- Anglo American - United Kingdom
- Savvy Resources Ltd - HongKong
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Karbindo Abesyapradhi - Indoneisa
- Grasim Industreis Ltd - India
- Globalindo Alam Lestari - Indonesia
- Singapore Mercantile Exchange
- Asmin Koalindo Tuhup - Indonesia
- European Bulk Services B.V. - Netherlands
- VISA Power Limited - India
- San Jose City I Power Corp, Philippines
- Indian Oil Corporation Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Carbofer General Trading SA - India
- Maharashtra Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Gujarat Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Manunggal Multi Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- Australian Coal Association
- IHS Mccloskey Coal Group - USA
- White Energy Company Limited
- Aditya Birla Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Ambuja Cements Ltd - India
- Salva Resources Pvt Ltd - India
- ASAPP Information Group - India
- Electricity Authority, New Zealand
- Sindya Power Generating Company Private Ltd
- SMG Consultants - Indonesia
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