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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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Tuesday, 29 January 19
HARD COAL BEARS THE BRUNT OF THE RECOMMENDATIONS OF THE COMMISSION GROWTH STRUCTURAL CHANGE AND EMPLOYMENT - VDKI
Press Release: Hard coal bears the brunt of the recommendations of the Commission Growth Structural change and employment.
In its fi ...
Tuesday, 29 January 19
CHINA HAS BEEN THE TOP DRIVER OF GLOBAL GROWTH FOR NEARLY TWO DECADES - ALLIED
China has been the top driver of global growth for nearly two decades now, pushing demand for seaborne trade and being the key influencer for deman ...
Saturday, 26 January 19
SUPRAMAX: NICKEL ORE RUNS SAW A 56K DWT VESSEL, DELIVERY PHILIPPINES, FIXED FOR A TRIP TO CHINA AT $6K - BALTIC BRIEFING
Capesize
A week of dashed hopes for owners as the optimism evident the previous week evaporated. Rates slipped on all routes and underlying thr ...
Thursday, 24 January 19
ANOTHER DISAPPOINTING WEEK FOR PANAMAX OWNERS; MARKET CONTINUES DOWN IN BOTH BASINS - FEARNLEYS
Capesize
The week has been marked by low activity and dropping rates in both basins. As usual, supply additions have increased at the beginning ...
Thursday, 24 January 19
KOREA SOUTHERN POWER INVITED BIDS FOR 960K MT OF 4600 NCV COAL FOR THREE YEARS
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 320,000 MT of min 4,600 kcal/kg NCV low calo ...
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- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Meralco Power Generation, Philippines
- Wilmar Investment Holdings
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Singapore Mercantile Exchange
- Georgia Ports Authority, United States
- Holcim Trading Pte Ltd - Singapore
- Dalmia Cement Bharat India
- Australian Coal Association
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- Simpson Spence & Young - Indonesia
- Indika Energy - Indonesia
- ASAPP Information Group - India
- Essar Steel Hazira Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Oil Corporation Limited
- SN Aboitiz Power Inc, Philippines
- Kumho Petrochemical, South Korea
- GAC Shipping (India) Pvt Ltd
- Bukit Baiduri Energy - Indonesia
- Romanian Commodities Exchange
- Latin American Coal - Colombia
- Electricity Generating Authority of Thailand
- Rio Tinto Coal - Australia
- New Zealand Coal & Carbon
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Bukit Makmur.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Banpu Public Company Limited - Thailand
- White Energy Company Limited
- Eastern Energy - Thailand
- Gujarat Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- The University of Queensland
- Interocean Group of Companies - India
- Bhoruka Overseas - Indonesia
- Ministry of Finance - Indonesia
- Sakthi Sugars Limited - India
- Formosa Plastics Group - Taiwan
- Parliament of New Zealand
- Directorate Of Revenue Intelligence - India
- Sojitz Corporation - Japan
- TeaM Sual Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Coalindo Energy - Indonesia
- Bharathi Cement Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- Sindya Power Generating Company Private Ltd
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- Anglo American - United Kingdom
- Mercator Lines Limited - India
- Ministry of Transport, Egypt
- Antam Resourcindo - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- MS Steel International - UAE
- Posco Energy - South Korea
- Sree Jayajothi Cements Limited - India
- Billiton Holdings Pty Ltd - Australia
- VISA Power Limited - India
- Thiess Contractors Indonesia
- Vizag Seaport Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Bulk Trading Sa - Switzerland
- Maheswari Brothers Coal Limited - India
- Kideco Jaya Agung - Indonesia
- Orica Mining Services - Indonesia
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- Eastern Coal Council - USA
- AsiaOL BioFuels Corp., Philippines
- Energy Link Ltd, New Zealand
- Kepco SPC Power Corporation, Philippines
- London Commodity Brokers - England
- Sarangani Energy Corporation, Philippines
- Videocon Industries ltd - India
- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Indogreen Group - Indonesia
- GVK Power & Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Orica Australia Pty. Ltd.
- Larsen & Toubro Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Barasentosa Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Lanco Infratech Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Chettinad Cement Corporation Ltd - India
- International Coal Ventures Pvt Ltd - India
- SMG Consultants - Indonesia
- Commonwealth Bank - Australia
- Ministry of Mines - Canada
- GN Power Mariveles Coal Plant, Philippines
- Marubeni Corporation - India
- Globalindo Alam Lestari - Indonesia
- Central Electricity Authority - India
- Thai Mozambique Logistica
- Leighton Contractors Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- Wood Mackenzie - Singapore
- Power Finance Corporation Ltd., India
- South Luzon Thermal Energy Corporation
- Vijayanagar Sugar Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Vedanta Resources Plc - India
- Star Paper Mills Limited - India
- Alfred C Toepfer International GmbH - Germany
- Indian Energy Exchange, India
- Energy Development Corp, Philippines
- India Bulls Power Limited - India
- GMR Energy Limited - India
- PTC India Limited - India
- Siam City Cement - Thailand
- Tata Chemicals Ltd - India
- Kaltim Prima Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- Coastal Gujarat Power Limited - India
- Africa Commodities Group - South Africa
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- Neyveli Lignite Corporation Ltd, - India
- Rashtriya Ispat Nigam Limited - India
- European Bulk Services B.V. - Netherlands
- Madhucon Powers Ltd - India
- Deloitte Consulting - India
- Attock Cement Pakistan Limited
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Australian Commodity Traders Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Cement Manufacturers Association - India
- Borneo Indobara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining Corp, Philippines
- Mintek Dendrill Indonesia
- Aditya Birla Group - India
- Trasteel International SA, Italy
- Indonesian Coal Mining Association
- Savvy Resources Ltd - HongKong
- Gujarat Mineral Development Corp Ltd - India
- Edison Trading Spa - Italy
- Mjunction Services Limited - India
- CNBM International Corporation - China
- LBH Netherlands Bv - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Minerals Council of Australia
- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- OPG Power Generation Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bangladesh Power Developement Board
- Makarim & Taira - Indonesia
- Salva Resources Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Intertek Mineral Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Ambuja Cements Ltd - India
- Metalloyd Limited - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Heidelberg Cement - Germany
- PNOC Exploration Corporation - Philippines
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Oldendorff Carriers - Singapore
- ICICI Bank Limited - India
- Jindal Steel & Power Ltd - India
- Global Coal Blending Company Limited - Australia
- Binh Thuan Hamico - Vietnam
- Straits Asia Resources Limited - Singapore
- Planning Commission, India
- Medco Energi Mining Internasional
- Jaiprakash Power Ventures ltd
- Siam City Cement PLC, Thailand
- PetroVietnam Power Coal Import and Supply Company
- Central Java Power - Indonesia
- Renaissance Capital - South Africa
- Xindia Steels Limited - India
- McConnell Dowell - Australia
- Therma Luzon, Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Agrawal Coal Company - India
- Electricity Authority, New Zealand
- IEA Clean Coal Centre - UK
- PowerSource Philippines DevCo
- Samtan Co., Ltd - South Korea
- Independent Power Producers Association of India
- Sical Logistics Limited - India
- Malabar Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Bhushan Steel Limited - India
- Chamber of Mines of South Africa
- Riau Bara Harum - Indonesia
- Bhatia International Limited - India
- Gujarat Sidhee Cement - India
- Coal and Oil Company - UAE
- Miang Besar Coal Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
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