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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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Tuesday, 22 November 16
THE COMMODITIES MARKETS HAD SHOWED GREATER PROMISE SINCE THE SUMMER PERIOD - GEORGE LAZARIDIS
We have all borne witness to the sluggish pace of trade growth witnessed during the course of the past 4 years as well as the even slower pace note ...
Monday, 21 November 16
CHINA IS ESTIMATED TO SEE HIGHEST IMPORTED COAL DEMAND LEVEL IN 2017, POLL SAYS
“Which country is estimated to see highest imported coal demand level in 2017?”
The on-line opinion poll conducted by COALsp ...
Monday, 21 November 16
KOMIPO IS LOOKING FOR 140K MT OF SUB-BITUMINOUS COAL FOR FEB-MAR 2017 LOADING
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a new tender for 140,000 Metric Tons of Sub-Bituminous coal for i ...
Monday, 21 November 16
BALTIC DRY INDEX SURGES TO 1257 POINTS W/E 18 NOV; BPI ROSE 37.3% W/W
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities rally continues this past week and ending on a positive n ...
Friday, 18 November 16
CAPESIZE: THE COMMODITIES PRICES ARE INCREASING, RESULTING IN MORE DEMAND AND CONSEQUENTLY RATES ARE MAKING A BIG JUMP - FEARNLEYS
Supramax
Apart from booming S. Africa where owners have obtained USD 14-15k to MEG/India and around mid USD 12k to China, the Pacific market has ...
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- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Siam City Cement PLC, Thailand
- White Energy Company Limited
- Bukit Baiduri Energy - Indonesia
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Renaissance Capital - South Africa
- Coastal Gujarat Power Limited - India
- Savvy Resources Ltd - HongKong
- Deloitte Consulting - India
- Bukit Makmur.PT - Indonesia
- Oldendorff Carriers - Singapore
- GAC Shipping (India) Pvt Ltd
- Australian Coal Association
- VISA Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Vedanta Resources Plc - India
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- Kaltim Prima Coal - Indonesia
- Economic Council, Georgia
- PowerSource Philippines DevCo
- Kideco Jaya Agung - Indonesia
- Bulk Trading Sa - Switzerland
- Indonesian Coal Mining Association
- Medco Energi Mining Internasional
- London Commodity Brokers - England
- PTC India Limited - India
- Essar Steel Hazira Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Sindya Power Generating Company Private Ltd
- Manunggal Multi Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Bhushan Steel Limited - India
- Semirara Mining Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Borneo Indobara - Indonesia
- Minerals Council of Australia
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
- GN Power Mariveles Coal Plant, Philippines
- Port Waratah Coal Services - Australia
- Meralco Power Generation, Philippines
- Independent Power Producers Association of India
- Bharathi Cement Corporation - India
- Lanco Infratech Ltd - India
- Trasteel International SA, Italy
- International Coal Ventures Pvt Ltd - India
- Goldman Sachs - Singapore
- Global Business Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Mjunction Services Limited - India
- Videocon Industries ltd - India
- Riau Bara Harum - Indonesia
- Sinarmas Energy and Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Jindal Steel & Power Ltd - India
- Edison Trading Spa - Italy
- Metalloyd Limited - United Kingdom
- Thiess Contractors Indonesia
- Toyota Tsusho Corporation, Japan
- Holcim Trading Pte Ltd - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- MS Steel International - UAE
- Bhoruka Overseas - Indonesia
- Africa Commodities Group - South Africa
- Parry Sugars Refinery, India
- PNOC Exploration Corporation - Philippines
- Ministry of Mines - Canada
- Malabar Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parliament of New Zealand
- Krishnapatnam Port Company Ltd. - India
- Ministry of Finance - Indonesia
- Grasim Industreis Ltd - India
- Iligan Light & Power Inc, Philippines
- Coalindo Energy - Indonesia
- Attock Cement Pakistan Limited
- Tamil Nadu electricity Board
- Asmin Koalindo Tuhup - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Electricity Authority, New Zealand
- Standard Chartered Bank - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Java Power - Indonesia
- Marubeni Corporation - India
- Binh Thuan Hamico - Vietnam
- Latin American Coal - Colombia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMC Global Power, Philippines
- Dalmia Cement Bharat India
- Sree Jayajothi Cements Limited - India
- McConnell Dowell - Australia
- Cement Manufacturers Association - India
- Neyveli Lignite Corporation Ltd, - India
- Makarim & Taira - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Formosa Plastics Group - Taiwan
- Tata Chemicals Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercuria Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement - Thailand
- Energy Link Ltd, New Zealand
- Alfred C Toepfer International GmbH - Germany
- ICICI Bank Limited - India
- Straits Asia Resources Limited - Singapore
- PetroVietnam Power Coal Import and Supply Company
- GMR Energy Limited - India
- Madhucon Powers Ltd - India
- Chettinad Cement Corporation Ltd - India
- Sarangani Energy Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Thai Mozambique Logistica
- Karaikal Port Pvt Ltd - India
- GVK Power & Infra Limited - India
- SMG Consultants - Indonesia
- Banpu Public Company Limited - Thailand
- Mercator Lines Limited - India
- OPG Power Generation Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Antam Resourcindo - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- CIMB Investment Bank - Malaysia
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- Directorate General of MIneral and Coal - Indonesia
- Carbofer General Trading SA - India
- Interocean Group of Companies - India
- Vizag Seaport Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Romanian Commodities Exchange
- Gujarat Sidhee Cement - India
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Commodity Traders Exchange
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- Planning Commission, India
- CNBM International Corporation - China
- Rashtriya Ispat Nigam Limited - India
- Indogreen Group - Indonesia
- Orica Australia Pty. Ltd.
- Orica Mining Services - Indonesia
- Intertek Mineral Services - Indonesia
- Mintek Dendrill Indonesia
- Ministry of Transport, Egypt
- Commonwealth Bank - Australia
- Merrill Lynch Commodities Europe
- Uttam Galva Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- Bangladesh Power Developement Board
- Agrawal Coal Company - India
- Energy Development Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kapuas Tunggal Persada - Indonesia
- Indika Energy - Indonesia
- Wilmar Investment Holdings
- Maharashtra Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Pendopo Energi Batubara - Indonesia
- The University of Queensland
- Vijayanagar Sugar Pvt Ltd - India
- Bhatia International Limited - India
- Kumho Petrochemical, South Korea
- Therma Luzon, Inc, Philippines
- Anglo American - United Kingdom
- Eastern Coal Council - USA
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- Baramulti Group, Indonesia
- Ambuja Cements Ltd - India
- Sical Logistics Limited - India
- Jaiprakash Power Ventures ltd
- Central Electricity Authority - India
- Cigading International Bulk Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Singapore Mercantile Exchange
- Wood Mackenzie - Singapore
- Larsen & Toubro Limited - India
- ASAPP Information Group - India
- Ind-Barath Power Infra Limited - India
- San Jose City I Power Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Petron Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Barasentosa Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Salva Resources Pvt Ltd - India
- Coal and Oil Company - UAE
- Star Paper Mills Limited - India
- Aditya Birla Group - India
- Eastern Energy - Thailand
- Chamber of Mines of South Africa
- The State Trading Corporation of India Ltd
- The Treasury - Australian Government
- European Bulk Services B.V. - Netherlands
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