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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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Monday, 11 March 19
SUPRAMAX: A 61,000 DWT VESSEL WAS BOOKED SINGAPORE FOR A TRIP VIA INDONESIA TO CHINA AT $10,500 - BALTIC BRIEFING
Capesize
A faint glimmer of hope with the suggestion the market may have finally bottomed out, with owners attempting to resist further cuts in ...
Friday, 08 March 19
KOMIPO INVITES BIDS FOR 2.6 MILLION TONS OF AUSTRALIAN 5700 NAR COAL FOR FIVE YEARS
South Korea state-owned utility Korea Midland Power (KOMIPO) issued a tender for 520,000 MT of min. 5700 NAR coal of Australian origin to be burnt ...
Friday, 08 March 19
CHINA'S COAL DEMAND FORECAST TO DROP SLOWLY - YONHAP
China’s coal demand is expected to fall at a snail’s pace over the next 20 years due to the country’s preference for the cheap fo ...
Thursday, 07 March 19
INDONESIAN COAL PRICE REFERENCE PLUNGE TO LOWEST IN SEVEN MONTHS
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Wednesday, 06 March 19
KOSPO INVITES BIDS FOR 80,000 MT OF 3800 NCV COAL FOR 21 - 30 MARCH, 2019 LOADING
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 80,000 MT of min 3,800 kcal/kg NCV low calor ...
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- Alfred C Toepfer International GmbH - Germany
- Altura Mining Limited, Indonesia
- Sojitz Corporation - Japan
- Sinarmas Energy and Mining - Indonesia
- Australian Commodity Traders Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Coal Blending Company Limited - Australia
- Bulk Trading Sa - Switzerland
- Savvy Resources Ltd - HongKong
- Karaikal Port Pvt Ltd - India
- The Treasury - Australian Government
- Bhoruka Overseas - Indonesia
- Edison Trading Spa - Italy
- Meralco Power Generation, Philippines
- Bhushan Steel Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meenaskhi Energy Private Limited - India
- Kideco Jaya Agung - Indonesia
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- Mjunction Services Limited - India
- Maheswari Brothers Coal Limited - India
- Xindia Steels Limited - India
- Aditya Birla Group - India
- Romanian Commodities Exchange
- Power Finance Corporation Ltd., India
- Indonesian Coal Mining Association
- Carbofer General Trading SA - India
- Bharathi Cement Corporation - India
- MS Steel International - UAE
- Asmin Koalindo Tuhup - Indonesia
- Aboitiz Power Corporation - Philippines
- Siam City Cement PLC, Thailand
- Ind-Barath Power Infra Limited - India
- Ambuja Cements Ltd - India
- Baramulti Group, Indonesia
- European Bulk Services B.V. - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Posco Energy - South Korea
- CNBM International Corporation - China
- PetroVietnam Power Coal Import and Supply Company
- GAC Shipping (India) Pvt Ltd
- Malabar Cements Ltd - India
- Independent Power Producers Association of India
- South Luzon Thermal Energy Corporation
- Jaiprakash Power Ventures ltd
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- Merrill Lynch Commodities Europe
- Mercator Lines Limited - India
- San Jose City I Power Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- SMC Global Power, Philippines
- Essar Steel Hazira Ltd - India
- The State Trading Corporation of India Ltd
- Toyota Tsusho Corporation, Japan
- Agrawal Coal Company - India
- Kumho Petrochemical, South Korea
- International Coal Ventures Pvt Ltd - India
- Electricity Generating Authority of Thailand
- TeaM Sual Corporation - Philippines
- Latin American Coal - Colombia
- Indika Energy - Indonesia
- Dalmia Cement Bharat India
- London Commodity Brokers - England
- Coal and Oil Company - UAE
- Australian Coal Association
- Interocean Group of Companies - India
- Indo Tambangraya Megah - Indonesia
- Parliament of New Zealand
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Planning Commission, India
- Wood Mackenzie - Singapore
- Simpson Spence & Young - Indonesia
- IEA Clean Coal Centre - UK
- Miang Besar Coal Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Global Business Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Ministry of Finance - Indonesia
- New Zealand Coal & Carbon
- Minerals Council of Australia
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining Corp, Philippines
- Metalloyd Limited - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Straits Asia Resources Limited - Singapore
- Renaissance Capital - South Africa
- Rio Tinto Coal - Australia
- Petron Corporation, Philippines
- Thiess Contractors Indonesia
- PowerSource Philippines DevCo
- Global Green Power PLC Corporation, Philippines
- Orica Australia Pty. Ltd.
- Eastern Coal Council - USA
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Mintek Dendrill Indonesia
- The University of Queensland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Makarim & Taira - Indonesia
- Bangladesh Power Developement Board
- Anglo American - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- ASAPP Information Group - India
- Medco Energi Mining Internasional
- TNB Fuel Sdn Bhd - Malaysia
- Star Paper Mills Limited - India
- Economic Council, Georgia
- Gujarat Mineral Development Corp Ltd - India
- Sarangani Energy Corporation, Philippines
- Electricity Authority, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Antam Resourcindo - Indonesia
- Orica Mining Services - Indonesia
- Borneo Indobara - Indonesia
- Mercuria Energy - Indonesia
- Thai Mozambique Logistica
- ICICI Bank Limited - India
- Therma Luzon, Inc, Philippines
- Port Waratah Coal Services - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Bayan Resources Tbk. - Indonesia
- Barasentosa Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Salva Resources Pvt Ltd - India
- Sical Logistics Limited - India
- IHS Mccloskey Coal Group - USA
- Grasim Industreis Ltd - India
- Heidelberg Cement - Germany
- Parry Sugars Refinery, India
- Binh Thuan Hamico - Vietnam
- Sree Jayajothi Cements Limited - India
- PNOC Exploration Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Indogreen Group - Indonesia
- White Energy Company Limited
- Central Electricity Authority - India
- Energy Development Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Gujarat Sidhee Cement - India
- Bukit Baiduri Energy - Indonesia
- Africa Commodities Group - South Africa
- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- VISA Power Limited - India
- PTC India Limited - India
- Standard Chartered Bank - UAE
- Central Java Power - Indonesia
- Singapore Mercantile Exchange
- GVK Power & Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- Indian Oil Corporation Limited
- Bukit Makmur.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Formosa Plastics Group - Taiwan
- Tata Chemicals Ltd - India
- Vedanta Resources Plc - India
- Karbindo Abesyapradhi - Indoneisa
- Iligan Light & Power Inc, Philippines
- SMG Consultants - Indonesia
- Kartika Selabumi Mining - Indonesia
- Madhucon Powers Ltd - India
- Manunggal Multi Energi - Indonesia
- Larsen & Toubro Limited - India
- Kapuas Tunggal Persada - Indonesia
- India Bulls Power Limited - India
- Commonwealth Bank - Australia
- Rashtriya Ispat Nigam Limited - India
- Marubeni Corporation - India
- Coalindo Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Georgia Ports Authority, United States
- Energy Link Ltd, New Zealand
- Goldman Sachs - Singapore
- Tamil Nadu electricity Board
- Eastern Energy - Thailand
- McConnell Dowell - Australia
- Price Waterhouse Coopers - Russia
- Uttam Galva Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Cement Manufacturers Association - India
- Chamber of Mines of South Africa
- Lanco Infratech Ltd - India
- Sakthi Sugars Limited - India
- GMR Energy Limited - India
- Siam City Cement - Thailand
- Kepco SPC Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Oldendorff Carriers - Singapore
- Vizag Seaport Private Limited - India
- Deloitte Consulting - India
- Petrochimia International Co. Ltd.- Taiwan
- Directorate Of Revenue Intelligence - India
- Indian Energy Exchange, India
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Transport, Egypt
- Samtan Co., Ltd - South Korea
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