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