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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, 08 October 18
KOMIPO INVITES BIDS FOR 520,000 TONS OF COLOMBIAN ORIGIN OF 5,700 NAR COAL
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a tender for 520,000 MT of min. 5700 NAR coal of Colombian origin ...
Sunday, 07 October 18
SUPRAMAX: INDO-INDIA USUAL COAL RUNS WERE COVERED AT US$ 12K - FEARNLEYS
Capesize
Average daily earnings up close to 15 pct in 5 trading days, thus patience finally paying off for owners of the big ships - Chinese play ...
Sunday, 07 October 18
A CASE FOR 20/20 VISION? IMO'S LOW SULPHUR FUEL LIMIT UNDER MARPOL ANNEX VI WHICH COMES INTO FORCE ON 1ST JANUARY 2020
KNOWLEDGE TO ELEVATE
The implementation of the global 0.5% sulphur cap for bunker fuel under MARPOL Annex VI in just under 18 months’ ti ...
Friday, 05 October 18
COAL PRODUCTION REACHES 64% OF 2018 TARGET : THE JAKARTA POST
National coal production up to August has already reached 311 million tons, or 64 percent of this year's total target of 485 million tons, acco ...
Wednesday, 03 October 18
VALUE OF AUSTRALIAN COAL EXPORTS TIPPED TO DECLINE SHARPLY OVER NEXT 18 MONTHS - THE GUARDIAN
Thermal coal prices forecast to drop 25% and metallurgical coal prices 23% as value of iron ore exports also falls
The value of Aust ...
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- Intertek Mineral Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Posco Energy - South Korea
- Savvy Resources Ltd - HongKong
- Africa Commodities Group - South Africa
- Standard Chartered Bank - UAE
- Rashtriya Ispat Nigam Limited - India
- Sakthi Sugars Limited - India
- CNBM International Corporation - China
- Mintek Dendrill Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bharathi Cement Corporation - India
- Star Paper Mills Limited - India
- Chamber of Mines of South Africa
- ASAPP Information Group - India
- Price Waterhouse Coopers - Russia
- TNB Fuel Sdn Bhd - Malaysia
- LBH Netherlands Bv - Netherlands
- Tamil Nadu electricity Board
- Bukit Makmur.PT - Indonesia
- Commonwealth Bank - Australia
- Gujarat Electricity Regulatory Commission - India
- Bhatia International Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Planning Commission, India
- Rio Tinto Coal - Australia
- Attock Cement Pakistan Limited
- White Energy Company Limited
- San Jose City I Power Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Sical Logistics Limited - India
- CIMB Investment Bank - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Trasteel International SA, Italy
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Uttam Galva Steels Limited - India
- Aditya Birla Group - India
- Port Waratah Coal Services - Australia
- Indika Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Minerals Council of Australia
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- Straits Asia Resources Limited - Singapore
- Semirara Mining Corp, Philippines
- Vedanta Resources Plc - India
- Vijayanagar Sugar Pvt Ltd - India
- Singapore Mercantile Exchange
- Carbofer General Trading SA - India
- Formosa Plastics Group - Taiwan
- GMR Energy Limited - India
- Heidelberg Cement - Germany
- Toyota Tsusho Corporation, Japan
- Anglo American - United Kingdom
- Medco Energi Mining Internasional
- Indian Oil Corporation Limited
- Madhucon Powers Ltd - India
- TeaM Sual Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Eastern Energy - Thailand
- OPG Power Generation Pvt Ltd - India
- Siam City Cement - Thailand
- Marubeni Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Malabar Cements Ltd - India
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Central Java Power - Indonesia
- Meralco Power Generation, Philippines
- IEA Clean Coal Centre - UK
- Krishnapatnam Port Company Ltd. - India
- Thai Mozambique Logistica
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- Vizag Seaport Private Limited - India
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- European Bulk Services B.V. - Netherlands
- London Commodity Brokers - England
- AsiaOL BioFuels Corp., Philippines
- India Bulls Power Limited - India
- Borneo Indobara - Indonesia
- Australian Commodity Traders Exchange
- Bangladesh Power Developement Board
- Xindia Steels Limited - India
- South Luzon Thermal Energy Corporation
- Bhoruka Overseas - Indonesia
- Independent Power Producers Association of India
- VISA Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Baramulti Group, Indonesia
- Interocean Group of Companies - India
- Maharashtra Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cement Manufacturers Association - India
- Pendopo Energi Batubara - Indonesia
- Indonesian Coal Mining Association
- Global Green Power PLC Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- The State Trading Corporation of India Ltd
- Energy Link Ltd, New Zealand
- Binh Thuan Hamico - Vietnam
- Coastal Gujarat Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Oldendorff Carriers - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Agrawal Coal Company - India
- Indian Energy Exchange, India
- Edison Trading Spa - Italy
- Coal and Oil Company - UAE
- Power Finance Corporation Ltd., India
- Orica Mining Services - Indonesia
- Barasentosa Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Baiduri Energy - Indonesia
- Therma Luzon, Inc, Philippines
- The University of Queensland
- Indogreen Group - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Grasim Industreis Ltd - India
- Ministry of Transport, Egypt
- Dalmia Cement Bharat India
- Jindal Steel & Power Ltd - India
- ICICI Bank Limited - India
- Videocon Industries ltd - India
- Meenaskhi Energy Private Limited - India
- Iligan Light & Power Inc, Philippines
- Latin American Coal - Colombia
- Petrochimia International Co. Ltd.- Taiwan
- Ambuja Cements Ltd - India
- Ministry of Finance - Indonesia
- Banpu Public Company Limited - Thailand
- Coalindo Energy - Indonesia
- Central Electricity Authority - India
- Semirara Mining and Power Corporation, Philippines
- Eastern Coal Council - USA
- Thiess Contractors Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Mercuria Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Riau Bara Harum - Indonesia
- Kideco Jaya Agung - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Energy Development Corp, Philippines
- Sojitz Corporation - Japan
- Merrill Lynch Commodities Europe
- Leighton Contractors Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- The Treasury - Australian Government
- Romanian Commodities Exchange
- Wood Mackenzie - Singapore
- Aboitiz Power Corporation - Philippines
- MS Steel International - UAE
- SN Aboitiz Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Renaissance Capital - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Chettinad Cement Corporation Ltd - India
- Karaikal Port Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Bulk Trading Sa - Switzerland
- Directorate Of Revenue Intelligence - India
- Australian Coal Association
- Directorate General of MIneral and Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Timah Investasi Mineral - Indoneisa
- Parry Sugars Refinery, India
- IHS Mccloskey Coal Group - USA
- Goldman Sachs - Singapore
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- PowerSource Philippines DevCo
- SMG Consultants - Indonesia
- PTC India Limited - India
- Bhushan Steel Limited - India
- Simpson Spence & Young - Indonesia
- Global Business Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petron Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Deloitte Consulting - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercator Lines Limited - India
- GAC Shipping (India) Pvt Ltd
- Larsen & Toubro Limited - India
- Ministry of Mines - Canada
- Alfred C Toepfer International GmbH - Germany
- Jaiprakash Power Ventures ltd
- Siam City Cement PLC, Thailand
- Electricity Generating Authority of Thailand
- Globalindo Alam Lestari - Indonesia
- New Zealand Coal & Carbon
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Georgia Ports Authority, United States
- Mjunction Services Limited - India
- Samtan Co., Ltd - South Korea
- Orica Australia Pty. Ltd.
- Sarangani Energy Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
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