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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, 03 February 17
KOMIPO INVITES BIDS FOR 1.13 MILLION TONS OF BITUMINOUS COAL FOR Q2' 17
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a new tender for 1,130,000 Metric Tons of Bituminous coal f ...
Friday, 03 February 17
U.S. WEEKLY COAL PRODUCTION DECLINED 3.9% W/W; ROSE 17.7% Y/Y
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 16.1 million short ton ...
Friday, 03 February 17
US - EXECUTIVE ORDER ON IMMIGRATION AFFECTS VESSEL CREWS - GARD
From 27 January 2017, crew members carrying Iraqi, Syrian, Sudanese, Iranian, Somalian, Libyan or Yemeni passports are temporarily barred from ente ...
Wednesday, 01 February 17
MARKET INSIGHT - PANOS TSILINGIRIS
The recent placement of LOIs for 208kdwt Newcastlemax Newbuildings at $38.5m at Private Chinese Yard identifies with the modern history low for dry ...
Tuesday, 31 January 17
A CASE OF NEW YEAR BLUES FOR THE FAR EAST? - GEORGE LAZARIDIS
Unlike the typical lull in the market that we note during the period just prior to the Chinese New Year, 2017 has proved to be fairly m ...
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- Jindal Steel & Power Ltd - India
- VISA Power Limited - India
- ICICI Bank Limited - India
- Ministry of Mines - Canada
- Vizag Seaport Private Limited - India
- Central Electricity Authority - India
- Orica Australia Pty. Ltd.
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Videocon Industries ltd - India
- Salva Resources Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Miang Besar Coal Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Indika Energy - Indonesia
- Dalmia Cement Bharat India
- Bulk Trading Sa - Switzerland
- Simpson Spence & Young - Indonesia
- Banpu Public Company Limited - Thailand
- Indian Energy Exchange, India
- Sical Logistics Limited - India
- Lanco Infratech Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Anglo American - United Kingdom
- IEA Clean Coal Centre - UK
- SMG Consultants - Indonesia
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Economic Council, Georgia
- Independent Power Producers Association of India
- Goldman Sachs - Singapore
- Bukit Makmur.PT - Indonesia
- Global Business Power Corporation, Philippines
- Eastern Coal Council - USA
- Ministry of Transport, Egypt
- Thai Mozambique Logistica
- Indogreen Group - Indonesia
- GAC Shipping (India) Pvt Ltd
- Orica Mining Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Posco Energy - South Korea
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- Mjunction Services Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Aboitiz Power Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Karbindo Abesyapradhi - Indoneisa
- Mercator Lines Limited - India
- India Bulls Power Limited - India
- Sarangani Energy Corporation, Philippines
- Siam City Cement PLC, Thailand
- Samtan Co., Ltd - South Korea
- London Commodity Brokers - England
- Sindya Power Generating Company Private Ltd
- Marubeni Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Petron Corporation, Philippines
- Georgia Ports Authority, United States
- GVK Power & Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Global Green Power PLC Corporation, Philippines
- Energy Development Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Petrochimia International Co. Ltd.- Taiwan
- Chamber of Mines of South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Makarim & Taira - Indonesia
- Sojitz Corporation - Japan
- Asmin Koalindo Tuhup - Indonesia
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- Essar Steel Hazira Ltd - India
- Manunggal Multi Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Coal and Oil Company - UAE
- Standard Chartered Bank - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Commonwealth Bank - Australia
- Directorate General of MIneral and Coal - Indonesia
- Minerals Council of Australia
- The University of Queensland
- Maheswari Brothers Coal Limited - India
- Kaltim Prima Coal - Indonesia
- Africa Commodities Group - South Africa
- Renaissance Capital - South Africa
- Meralco Power Generation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Timah Investasi Mineral - Indoneisa
- Formosa Plastics Group - Taiwan
- Mintek Dendrill Indonesia
- Aditya Birla Group - India
- New Zealand Coal & Carbon
- Meenaskhi Energy Private Limited - India
- Malabar Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- Bhatia International Limited - India
- Ambuja Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Uttam Galva Steels Limited - India
- Antam Resourcindo - Indonesia
- Bhoruka Overseas - Indonesia
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Latin American Coal - Colombia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CIMB Investment Bank - Malaysia
- Jaiprakash Power Ventures ltd
- Cement Manufacturers Association - India
- Australian Coal Association
- International Coal Ventures Pvt Ltd - India
- Carbofer General Trading SA - India
- Parliament of New Zealand
- Globalindo Alam Lestari - Indonesia
- MS Steel International - UAE
- Tamil Nadu electricity Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Power Finance Corporation Ltd., India
- Cigading International Bulk Terminal - Indonesia
- Planning Commission, India
- Heidelberg Cement - Germany
- Trasteel International SA, Italy
- Deloitte Consulting - India
- Tata Chemicals Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Bharathi Cement Corporation - India
- White Energy Company Limited
- McConnell Dowell - Australia
- GMR Energy Limited - India
- The State Trading Corporation of India Ltd
- Indonesian Coal Mining Association
- Kideco Jaya Agung - Indonesia
- Indo Tambangraya Megah - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining Corp, Philippines
- Rio Tinto Coal - Australia
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Therma Luzon, Inc, Philippines
- Intertek Mineral Services - Indonesia
- Vedanta Resources Plc - India
- Larsen & Toubro Limited - India
- Medco Energi Mining Internasional
- Price Waterhouse Coopers - Russia
- Kumho Petrochemical, South Korea
- Agrawal Coal Company - India
- OPG Power Generation Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Edison Trading Spa - Italy
- AsiaOL BioFuels Corp., Philippines
- Grasim Industreis Ltd - India
- Wood Mackenzie - Singapore
- Metalloyd Limited - United Kingdom
- Borneo Indobara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Riau Bara Harum - Indonesia
- Singapore Mercantile Exchange
- Barasentosa Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- European Bulk Services B.V. - Netherlands
- IHS Mccloskey Coal Group - USA
- CNBM International Corporation - China
- Parry Sugars Refinery, India
- South Luzon Thermal Energy Corporation
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Star Paper Mills Limited - India
- Eastern Energy - Thailand
- Interocean Group of Companies - India
- Altura Mining Limited, Indonesia
- Coalindo Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- TeaM Sual Corporation - Philippines
- Sakthi Sugars Limited - India
- Sree Jayajothi Cements Limited - India
- Chettinad Cement Corporation Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Savvy Resources Ltd - HongKong
- Karaikal Port Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Thiess Contractors Indonesia
- Krishnapatnam Port Company Ltd. - India
- Madhucon Powers Ltd - India
- Oldendorff Carriers - Singapore
- Bangladesh Power Developement Board
- Wilmar Investment Holdings
- Port Waratah Coal Services - Australia
- Ind-Barath Power Infra Limited - India
- Ministry of Finance - Indonesia
- PTC India Limited - India
- Toyota Tsusho Corporation, Japan
- Semirara Mining and Power Corporation, Philippines
- ASAPP Information Group - India
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- SN Aboitiz Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
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