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