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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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Friday, 24 March 17
ADARO INDONESIA'S COAL SALES VOLUME INCREASED SLIGHTLY TO 54.1 MILLION TONES IN 2016
COALspot.com: PT. Adaro Indonesia, Indonesia’s second largest coal miner’s sales volume increased slightly to 54.1 million tones (Mt) i ...
Friday, 24 March 17
U.S COAL PRODUCTION ESTIMATE DECLINE 4.4% W/W - EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 14.1 million short tons ...
Thursday, 23 March 17
CAPESIZE: TAKING A BREATHER AFTER RALLYING - BUT OUTLOOK FOR WEEKS TO COME NOT SCARY - FEARNLEYS
Supramax
In the Pacific the market seems somewhat slower this week, although healthy rates still being achieved said Fearnleys in its latest week ...
Thursday, 23 March 17
KOREA MIDLAND POWER COMPANY LIMITED INVITES BIDS FOR TOTAL 4.77 MILLION TONS OF BITUMINOUS COAL FOR ITS BORYEONG POWER PLANT
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a new tender for 2,090,000 Metric Tons of Bituminous coal f ...
Wednesday, 22 March 17
THE DRY BULK MARKET HAS UNDOUBTEDLY REBOUNDED SINCE THE SAME PERIOD LAST YEAR - KONSTANTINOS KONTOMICHIS
The Dry Bulk market has undoubtedly rebounded since the same period last year and currently enjoys healthier freight rates. The positive reversal i ...
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- Vizag Seaport Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Energy - Thailand
- Australian Commodity Traders Exchange
- Global Green Power PLC Corporation, Philippines
- Interocean Group of Companies - India
- PNOC Exploration Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Kartika Selabumi Mining - Indonesia
- Planning Commission, India
- Banpu Public Company Limited - Thailand
- Videocon Industries ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Goldman Sachs - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Star Paper Mills Limited - India
- Binh Thuan Hamico - Vietnam
- Ministry of Finance - Indonesia
- Attock Cement Pakistan Limited
- Sree Jayajothi Cements Limited - India
- Siam City Cement - Thailand
- Uttam Galva Steels Limited - India
- Borneo Indobara - Indonesia
- Global Coal Blending Company Limited - Australia
- CIMB Investment Bank - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Coal and Oil Company - UAE
- OPG Power Generation Pvt Ltd - India
- Dalmia Cement Bharat India
- Riau Bara Harum - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Thiess Contractors Indonesia
- Simpson Spence & Young - Indonesia
- Directorate Of Revenue Intelligence - India
- Semirara Mining and Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Coastal Gujarat Power Limited - India
- Cement Manufacturers Association - India
- TNB Fuel Sdn Bhd - Malaysia
- SMC Global Power, Philippines
- Ministry of Transport, Egypt
- New Zealand Coal & Carbon
- Central Electricity Authority - India
- Mjunction Services Limited - India
- Posco Energy - South Korea
- San Jose City I Power Corp, Philippines
- Parliament of New Zealand
- Grasim Industreis Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Salva Resources Pvt Ltd - India
- Trasteel International SA, Italy
- Bharathi Cement Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- Africa Commodities Group - South Africa
- IEA Clean Coal Centre - UK
- Straits Asia Resources Limited - Singapore
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Minerals Council of Australia
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Port Waratah Coal Services - Australia
- Pendopo Energi Batubara - Indonesia
- Coalindo Energy - Indonesia
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Chettinad Cement Corporation Ltd - India
- Samtan Co., Ltd - South Korea
- Ministry of Mines - Canada
- Madhucon Powers Ltd - India
- Meralco Power Generation, Philippines
- Indika Energy - Indonesia
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Globalindo Alam Lestari - Indonesia
- Australian Coal Association
- Bangladesh Power Developement Board
- European Bulk Services B.V. - Netherlands
- Ambuja Cements Ltd - India
- Heidelberg Cement - Germany
- Karaikal Port Pvt Ltd - India
- Anglo American - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Singapore Mercantile Exchange
- Miang Besar Coal Terminal - Indonesia
- Agrawal Coal Company - India
- Antam Resourcindo - Indonesia
- Vedanta Resources Plc - India
- Asmin Koalindo Tuhup - Indonesia
- Indian Energy Exchange, India
- Semirara Mining Corp, Philippines
- Mintek Dendrill Indonesia
- Chamber of Mines of South Africa
- Medco Energi Mining Internasional
- IHS Mccloskey Coal Group - USA
- Marubeni Corporation - India
- Jindal Steel & Power Ltd - India
- Price Waterhouse Coopers - Russia
- Bukit Makmur.PT - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Indonesian Coal Mining Association
- Malabar Cements Ltd - India
- Indogreen Group - Indonesia
- Global Business Power Corporation, Philippines
- Bhatia International Limited - India
- Larsen & Toubro Limited - India
- ASAPP Information Group - India
- Jaiprakash Power Ventures ltd
- Toyota Tsusho Corporation, Japan
- Kobexindo Tractors - Indoneisa
- Sojitz Corporation - Japan
- Romanian Commodities Exchange
- Carbofer General Trading SA - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- International Coal Ventures Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wood Mackenzie - Singapore
- Manunggal Multi Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Sindya Power Generating Company Private Ltd
- Tamil Nadu electricity Board
- Lanco Infratech Ltd - India
- PTC India Limited - India
- Aboitiz Power Corporation - Philippines
- Central Java Power - Indonesia
- Intertek Mineral Services - Indonesia
- Deloitte Consulting - India
- Electricity Authority, New Zealand
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- Leighton Contractors Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- Bhushan Steel Limited - India
- Economic Council, Georgia
- Sical Logistics Limited - India
- The University of Queensland
- Kohat Cement Company Ltd. - Pakistan
- Wilmar Investment Holdings
- Bayan Resources Tbk. - Indonesia
- Sakthi Sugars Limited - India
- Ceylon Electricity Board - Sri Lanka
- London Commodity Brokers - England
- AsiaOL BioFuels Corp., Philippines
- Sinarmas Energy and Mining - Indonesia
- Energy Link Ltd, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Eastern Coal Council - USA
- Directorate General of MIneral and Coal - Indonesia
- Orica Australia Pty. Ltd.
- Edison Trading Spa - Italy
- Barasentosa Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- Ind-Barath Power Infra Limited - India
- Essar Steel Hazira Ltd - India
- Bulk Trading Sa - Switzerland
- ICICI Bank Limited - India
- GMR Energy Limited - India
- Billiton Holdings Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Kumho Petrochemical, South Korea
- Orica Mining Services - Indonesia
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kepco SPC Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- SMG Consultants - Indonesia
- Rio Tinto Coal - Australia
- VISA Power Limited - India
- Savvy Resources Ltd - HongKong
- Petron Corporation, Philippines
- Mercator Lines Limited - India
- GAC Shipping (India) Pvt Ltd
- SN Aboitiz Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Cigading International Bulk Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Independent Power Producers Association of India
- LBH Netherlands Bv - Netherlands
- Bhoruka Overseas - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Sidhee Cement - India
- Power Finance Corporation Ltd., India
- The Treasury - Australian Government
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- Merrill Lynch Commodities Europe
- Altura Mining Limited, Indonesia
- TeaM Sual Corporation - Philippines
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- Alfred C Toepfer International GmbH - Germany
- Iligan Light & Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Parry Sugars Refinery, India
- Renaissance Capital - South Africa
- Sarangani Energy Corporation, Philippines
- The State Trading Corporation of India Ltd
- Siam City Cement PLC, Thailand
- Xindia Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- MS Steel International - UAE
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