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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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Saturday, 10 February 18
OIL PRICE USD 100/BARREL BY END OF 2018! - SAROJ MOHAPATRA
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Friday, 09 February 18
COAL BUYERS SPOOKED BY INDONESIA'S NEW SHIPPING RULES - ASSOC
Buyers of Indonesian coal are holding back orders of the fuel after the government issued new shipping rules for coal and crude palm oil that would ...
Thursday, 08 February 18
ENHANCED PRODUCTION BY COAL INDIA LIMITED HELPS DECLINE IN COAL IMPORTS - UNION MINISTER OF RAILWAYS AND COAL
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Thursday, 08 February 18
A NEW WEEK WITH A SOFT SENTIMENT AND DECREASING RATES IN BOTH HEMISPHERE FOR THE PANAMAXES, SAYS FEARNLEYS
Supramax
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Wednesday, 07 February 18
INDONESIAN COAL PRICE REFERENCE RISES TO HIT THIRTEEN-MONTH HIGH OF $100.69 A TON
COALspot.com: The Indonesian Coal Price Reference (HBA) rose 5.39 per cent in February 2018, the latest ministerial decree showed.
The benchma ...
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- Sindya Power Generating Company Private Ltd
- European Bulk Services B.V. - Netherlands
- Bukit Baiduri Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Antam Resourcindo - Indonesia
- Aboitiz Power Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- New Zealand Coal & Carbon
- Lanco Infratech Ltd - India
- Borneo Indobara - Indonesia
- Marubeni Corporation - India
- OPG Power Generation Pvt Ltd - India
- Energy Development Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Metalloyd Limited - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Posco Energy - South Korea
- IEA Clean Coal Centre - UK
- Neyveli Lignite Corporation Ltd, - India
- Central Electricity Authority - India
- Indogreen Group - Indonesia
- Singapore Mercantile Exchange
- Bangladesh Power Developement Board
- Dalmia Cement Bharat India
- Ambuja Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Latin American Coal - Colombia
- GMR Energy Limited - India
- Savvy Resources Ltd - HongKong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wood Mackenzie - Singapore
- Essar Steel Hazira Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- Wilmar Investment Holdings
- Australian Coal Association
- Gujarat Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Sical Logistics Limited - India
- Timah Investasi Mineral - Indoneisa
- Siam City Cement PLC, Thailand
- Binh Thuan Hamico - Vietnam
- Sree Jayajothi Cements Limited - India
- Simpson Spence & Young - Indonesia
- Indonesian Coal Mining Association
- Electricity Generating Authority of Thailand
- Sakthi Sugars Limited - India
- Minerals Council of Australia
- Rashtriya Ispat Nigam Limited - India
- Alfred C Toepfer International GmbH - Germany
- ICICI Bank Limited - India
- ASAPP Information Group - India
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Mintek Dendrill Indonesia
- Indika Energy - Indonesia
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Cement Manufacturers Association - India
- TeaM Sual Corporation - Philippines
- Grasim Industreis Ltd - India
- Ministry of Transport, Egypt
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- Anglo American - United Kingdom
- Ministry of Mines - Canada
- San Jose City I Power Corp, Philippines
- Carbofer General Trading SA - India
- Vizag Seaport Private Limited - India
- Africa Commodities Group - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Meralco Power Generation, Philippines
- Heidelberg Cement - Germany
- Kepco SPC Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Planning Commission, India
- Karaikal Port Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- White Energy Company Limited
- Uttam Galva Steels Limited - India
- Mjunction Services Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Sarangani Energy Corporation, Philippines
- India Bulls Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- Aditya Birla Group - India
- Trasteel International SA, Italy
- Price Waterhouse Coopers - Russia
- Eastern Coal Council - USA
- Thai Mozambique Logistica
- Barasentosa Lestari - Indonesia
- Central Java Power - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Maharashtra Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Sojitz Corporation - Japan
- London Commodity Brokers - England
- Independent Power Producers Association of India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Straits Asia Resources Limited - Singapore
- Electricity Authority, New Zealand
- GAC Shipping (India) Pvt Ltd
- The State Trading Corporation of India Ltd
- Petron Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Iligan Light & Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- SMC Global Power, Philippines
- Banpu Public Company Limited - Thailand
- Thiess Contractors Indonesia
- Parliament of New Zealand
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Sidhee Cement - India
- SN Aboitiz Power Inc, Philippines
- Medco Energi Mining Internasional
- Economic Council, Georgia
- Vedanta Resources Plc - India
- Mercuria Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- PNOC Exploration Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement - Thailand
- Attock Cement Pakistan Limited
- Sinarmas Energy and Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- GVK Power & Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Vijayanagar Sugar Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Cigading International Bulk Terminal - Indonesia
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bhushan Steel Limited - India
- Madhucon Powers Ltd - India
- Mercator Lines Limited - India
- Riau Bara Harum - Indonesia
- Kaltim Prima Coal - Indonesia
- Oldendorff Carriers - Singapore
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Directorate Of Revenue Intelligence - India
- VISA Power Limited - India
- Videocon Industries ltd - India
- IHS Mccloskey Coal Group - USA
- Bulk Trading Sa - Switzerland
- PTC India Limited - India
- McConnell Dowell - Australia
- Bhatia International Limited - India
- Bukit Makmur.PT - Indonesia
- Chamber of Mines of South Africa
- Larsen & Toubro Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Commonwealth Bank - Australia
- Parry Sugars Refinery, India
- Kumho Petrochemical, South Korea
- PowerSource Philippines DevCo
- Jaiprakash Power Ventures ltd
- The Treasury - Australian Government
- Star Paper Mills Limited - India
- Bhoruka Overseas - Indonesia
- Xindia Steels Limited - India
- Goldman Sachs - Singapore
- Rio Tinto Coal - Australia
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Romanian Commodities Exchange
- Deloitte Consulting - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Global Green Power PLC Corporation, Philippines
- Port Waratah Coal Services - Australia
- Australian Commodity Traders Exchange
- Renaissance Capital - South Africa
- Makarim & Taira - Indonesia
- Coastal Gujarat Power Limited - India
- MS Steel International - UAE
- CIMB Investment Bank - Malaysia
- The University of Queensland
- Global Business Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Semirara Mining Corp, Philippines
- Salva Resources Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- Orica Mining Services - Indonesia
- Merrill Lynch Commodities Europe
- Ministry of Finance - Indonesia
- Bharathi Cement Corporation - India
- Indo Tambangraya Megah - Indonesia
- Coalindo Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Interocean Group of Companies - India
- Semirara Mining and Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Indian Energy Exchange, India
- Tata Chemicals Ltd - India
- Tamil Nadu electricity Board
- Globalindo Alam Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- Indian Oil Corporation Limited
- International Coal Ventures Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Pendopo Energi Batubara - Indonesia
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