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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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Monday, 14 November 16
KOMIPO'S SEOCHEON POWER PLANT TO IMPORT 240,000 MT OF SEMI / ANTHRACITE COAL FOR Q1'17
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a new tender for 240K mt of Semi-Anthracite and Anthracite Coal f ...
Monday, 14 November 16
DUNIA MAKMUR SUBSIDIARY BAGS MINING SERVICE CONTRACT WORTH $ 282.63 MILLION
PT Bukit Makmur Mandiri Utama (BUMA), has signed a life of mine contract with PT Tadjahan Antang Mineral (TAM) with a contract value of approximate ...
Monday, 14 November 16
THE CAPE INDEX ROSE 44.57 PER CENTS TO 2303 POINT WEEK OVER WEEK
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities rose slightly and ending in a positive note this past wee ...
Friday, 11 November 16
INDONESIAN 4200 GAR COAL IS THE MOST ATTRACTIVE COAL IN TODAY'S MARKET - OPINION POLL
“ Which coal type of Indonesian origin do you find the most attractive in today's market?”
The on-line opinion poll conducted ...
Friday, 11 November 16
WEEKLY U.S. COAL OUTPUT FELL SLIGHTLY W/E NOVEMBER 5
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 16.9 million short ton ...
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- Formosa Plastics Group - Taiwan
- Anglo American - United Kingdom
- PNOC Exploration Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Aboitiz Power Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- The Treasury - Australian Government
- Parliament of New Zealand
- Bangladesh Power Developement Board
- Maheswari Brothers Coal Limited - India
- OPG Power Generation Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Trasteel International SA, Italy
- GMR Energy Limited - India
- Parry Sugars Refinery, India
- Banpu Public Company Limited - Thailand
- Coalindo Energy - Indonesia
- Wilmar Investment Holdings
- Romanian Commodities Exchange
- Manunggal Multi Energi - Indonesia
- Oldendorff Carriers - Singapore
- Karaikal Port Pvt Ltd - India
- Singapore Mercantile Exchange
- Videocon Industries ltd - India
- Indian Energy Exchange, India
- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- Petron Corporation, Philippines
- Larsen & Toubro Limited - India
- Marubeni Corporation - India
- Planning Commission, India
- Cement Manufacturers Association - India
- Madhucon Powers Ltd - India
- The University of Queensland
- TNB Fuel Sdn Bhd - Malaysia
- Minerals Council of Australia
- Sojitz Corporation - Japan
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- IHS Mccloskey Coal Group - USA
- Globalindo Alam Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Indogreen Group - Indonesia
- Bhoruka Overseas - Indonesia
- European Bulk Services B.V. - Netherlands
- White Energy Company Limited
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Sarangani Energy Corporation, Philippines
- ICICI Bank Limited - India
- Attock Cement Pakistan Limited
- Eastern Energy - Thailand
- Edison Trading Spa - Italy
- Baramulti Group, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Power Finance Corporation Ltd., India
- India Bulls Power Limited - India
- Straits Asia Resources Limited - Singapore
- Metalloyd Limited - United Kingdom
- Riau Bara Harum - Indonesia
- Intertek Mineral Services - Indonesia
- Siam City Cement - Thailand
- PTC India Limited - India
- Central Electricity Authority - India
- Kaltim Prima Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- Wood Mackenzie - Singapore
- Jorong Barutama Greston.PT - Indonesia
- McConnell Dowell - Australia
- Antam Resourcindo - Indonesia
- Jindal Steel & Power Ltd - India
- Agrawal Coal Company - India
- Siam City Cement PLC, Thailand
- Kobexindo Tractors - Indoneisa
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- Mjunction Services Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Generating Authority of Thailand
- Salva Resources Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Aditya Birla Group - India
- Karbindo Abesyapradhi - Indoneisa
- Interocean Group of Companies - India
- Altura Mining Limited, Indonesia
- Barasentosa Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Kideco Jaya Agung - Indonesia
- Pendopo Energi Batubara - Indonesia
- Chamber of Mines of South Africa
- Binh Thuan Hamico - Vietnam
- London Commodity Brokers - England
- Mercator Lines Limited - India
- Carbofer General Trading SA - India
- Ministry of Transport, Egypt
- Electricity Authority, New Zealand
- Posco Energy - South Korea
- Sical Logistics Limited - India
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- Holcim Trading Pte Ltd - Singapore
- Therma Luzon, Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Energy Development Corp, Philippines
- Vizag Seaport Private Limited - India
- Ambuja Cements Ltd - India
- Economic Council, Georgia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Sidhee Cement - India
- South Luzon Thermal Energy Corporation
- Vijayanagar Sugar Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- VISA Power Limited - India
- Deloitte Consulting - India
- Port Waratah Coal Services - Australia
- Ind-Barath Power Infra Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Finance - Indonesia
- Lanco Infratech Ltd - India
- Uttam Galva Steels Limited - India
- ASAPP Information Group - India
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Rio Tinto Coal - Australia
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- Miang Besar Coal Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Kumho Petrochemical, South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Latin American Coal - Colombia
- Gujarat Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Australian Commodity Traders Exchange
- Iligan Light & Power Inc, Philippines
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- Eastern Coal Council - USA
- Krishnapatnam Port Company Ltd. - India
- Kartika Selabumi Mining - Indonesia
- Ministry of Mines - Canada
- Indika Energy - Indonesia
- Indonesian Coal Mining Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Tata Chemicals Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining Corp, Philippines
- Medco Energi Mining Internasional
- Merrill Lynch Commodities Europe
- The State Trading Corporation of India Ltd
- Energy Link Ltd, New Zealand
- Savvy Resources Ltd - HongKong
- Sakthi Sugars Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Baiduri Energy - Indonesia
- Tamil Nadu electricity Board
- CIMB Investment Bank - Malaysia
- Star Paper Mills Limited - India
- Chettinad Cement Corporation Ltd - India
- Makarim & Taira - Indonesia
- Global Coal Blending Company Limited - Australia
- Indian Oil Corporation Limited
- Maharashtra Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Orica Mining Services - Indonesia
- CNBM International Corporation - China
- MS Steel International - UAE
- Malabar Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Standard Chartered Bank - UAE
- Coastal Gujarat Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Xindia Steels Limited - India
- Dalmia Cement Bharat India
- Australian Coal Association
- Indo Tambangraya Megah - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- New Zealand Coal & Carbon
- SMC Global Power, Philippines
- Jaiprakash Power Ventures ltd
- Georgia Ports Authority, United States
- Bayan Resources Tbk. - Indonesia
- TeaM Sual Corporation - Philippines
- Commonwealth Bank - Australia
- Global Business Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- GAC Shipping (India) Pvt Ltd
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- Alfred C Toepfer International GmbH - Germany
- PowerSource Philippines DevCo
- San Jose City I Power Corp, Philippines
- Borneo Indobara - Indonesia
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- Thiess Contractors Indonesia
- Vedanta Resources Plc - India
- Grasim Industreis Ltd - India
- Directorate Of Revenue Intelligence - India
- IEA Clean Coal Centre - UK
- Petrochimia International Co. Ltd.- Taiwan
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