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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, 07 November 16
INDONESIAN COAL PRICE REFERENCE ROSE 59.57 PER CENT YEAR TO MONTH
COALspot.com: The Indonesia coal benchmark price hits to its highest level since May 2013. The government declared benchmark prices for Indo ...
Monday, 07 November 16
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Capesize
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Monday, 07 November 16
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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, 04 November 16
U.S COAL PRODUCTION UP WEEK OVER WEEK
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 17 million short tons ...
Friday, 04 November 16
INDONESIAN INFRASTRUCTURE DEVELOPMENT TRENDS ARE UNANIMOUSLY AFFIRMED
Press Release: October 20-21, 2016 Indonesia Infrastructure Summit (IIC) opened at the Hyatt Hotel in Jakarta The theme of the meeting was "Pr ...
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- Larsen & Toubro Limited - India
- Kobexindo Tractors - Indoneisa
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- Essar Steel Hazira Ltd - India
- Kepco SPC Power Corporation, Philippines
- Interocean Group of Companies - India
- Coastal Gujarat Power Limited - India
- Deloitte Consulting - India
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Meralco Power Generation, Philippines
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- Billiton Holdings Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Indika Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Manunggal Multi Energi - Indonesia
- Aditya Birla Group - India
- Commonwealth Bank - Australia
- Rashtriya Ispat Nigam Limited - India
- Posco Energy - South Korea
- Jindal Steel & Power Ltd - India
- Makarim & Taira - Indonesia
- GVK Power & Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Wood Mackenzie - Singapore
- Savvy Resources Ltd - HongKong
- Indian Oil Corporation Limited
- SMG Consultants - Indonesia
- ICICI Bank Limited - India
- International Coal Ventures Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Bangladesh Power Developement Board
- Uttam Galva Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Ministry of Mines - Canada
- Bhoruka Overseas - Indonesia
- Altura Mining Limited, Indonesia
- Global Business Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kumho Petrochemical, South Korea
- Ceylon Electricity Board - Sri Lanka
- AsiaOL BioFuels Corp., Philippines
- IEA Clean Coal Centre - UK
- Leighton Contractors Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Goldman Sachs - Singapore
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- Vizag Seaport Private Limited - India
- Therma Luzon, Inc, Philippines
- The Treasury - Australian Government
- Dalmia Cement Bharat India
- Kapuas Tunggal Persada - Indonesia
- Sakthi Sugars Limited - India
- Eastern Coal Council - USA
- Antam Resourcindo - Indonesia
- Bukit Baiduri Energy - Indonesia
- SMC Global Power, Philippines
- Semirara Mining Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Australian Coal Association
- Bank of Tokyo Mitsubishi UFJ Ltd
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- Bhatia International Limited - India
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- South Luzon Thermal Energy Corporation
- Heidelberg Cement - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Transport, Egypt
- Standard Chartered Bank - UAE
- Kaltim Prima Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Binh Thuan Hamico - Vietnam
- Tamil Nadu electricity Board
- Jorong Barutama Greston.PT - Indonesia
- Grasim Industreis Ltd - India
- Toyota Tsusho Corporation, Japan
- PTC India Limited - India
- Price Waterhouse Coopers - Russia
- Australian Commodity Traders Exchange
- PNOC Exploration Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- SN Aboitiz Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Carbofer General Trading SA - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Generating Authority of Thailand
- VISA Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- GAC Shipping (India) Pvt Ltd
- New Zealand Coal & Carbon
- Bharathi Cement Corporation - India
- Chamber of Mines of South Africa
- Semirara Mining and Power Corporation, Philippines
- Minerals Council of Australia
- Iligan Light & Power Inc, Philippines
- MS Steel International - UAE
- Ind-Barath Power Infra Limited - India
- The State Trading Corporation of India Ltd
- Thiess Contractors Indonesia
- IHS Mccloskey Coal Group - USA
- Kohat Cement Company Ltd. - Pakistan
- Vedanta Resources Plc - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Pendopo Energi Batubara - Indonesia
- European Bulk Services B.V. - Netherlands
- Salva Resources Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Gujarat Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Wilmar Investment Holdings
- Orica Mining Services - Indonesia
- Samtan Co., Ltd - South Korea
- Independent Power Producers Association of India
- Sarangani Energy Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Mintek Dendrill Indonesia
- Indian Energy Exchange, India
- Ministry of Finance - Indonesia
- Energy Link Ltd, New Zealand
- Renaissance Capital - South Africa
- White Energy Company Limited
- Electricity Authority, New Zealand
- ASAPP Information Group - India
- Economic Council, Georgia
- Singapore Mercantile Exchange
- Mercuria Energy - Indonesia
- Madhucon Powers Ltd - India
- Power Finance Corporation Ltd., India
- Vijayanagar Sugar Pvt Ltd - India
- Ambuja Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Siam City Cement PLC, Thailand
- Central Java Power - Indonesia
- McConnell Dowell - Australia
- Sree Jayajothi Cements Limited - India
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- Orica Australia Pty. Ltd.
- Edison Trading Spa - Italy
- Siam City Cement - Thailand
- Indogreen Group - Indonesia
- Lanco Infratech Ltd - India
- Metalloyd Limited - United Kingdom
- Eastern Energy - Thailand
- CNBM International Corporation - China
- San Jose City I Power Corp, Philippines
- Parliament of New Zealand
- Kideco Jaya Agung - Indonesia
- Riau Bara Harum - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Energy Development Corp, Philippines
- The University of Queensland
- Directorate General of MIneral and Coal - Indonesia
- Star Paper Mills Limited - India
- Latin American Coal - Colombia
- Petron Corporation, Philippines
- Africa Commodities Group - South Africa
- Agrawal Coal Company - India
- Planning Commission, India
- Cigading International Bulk Terminal - Indonesia
- Anglo American - United Kingdom
- Banpu Public Company Limited - Thailand
- Thai Mozambique Logistica
- OPG Power Generation Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Central Electricity Authority - India
- Coal and Oil Company - UAE
- Sinarmas Energy and Mining - Indonesia
- Attock Cement Pakistan Limited
- Krishnapatnam Port Company Ltd. - India
- Bulk Trading Sa - Switzerland
- Bukit Makmur.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Xindia Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- London Commodity Brokers - England
- Cement Manufacturers Association - India
- Intertek Mineral Services - Indonesia
- Bhushan Steel Limited - India
- Rio Tinto Coal - Australia
- Tata Chemicals Ltd - India
- Globalindo Alam Lestari - Indonesia
- Sical Logistics Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- India Bulls Power Limited - India
- Merrill Lynch Commodities Europe
- Gujarat Sidhee Cement - India
- Barasentosa Lestari - Indonesia
- Georgia Ports Authority, United States
- Parry Sugars Refinery, India
- Asmin Koalindo Tuhup - Indonesia
- Sojitz Corporation - Japan
- TeaM Sual Corporation - Philippines
- Romanian Commodities Exchange
- Meenaskhi Energy Private Limited - India
- Straits Asia Resources Limited - Singapore
- Borneo Indobara - Indonesia
- Trasteel International SA, Italy
- Videocon Industries ltd - India
- Marubeni Corporation - India
- Timah Investasi Mineral - Indoneisa
- GMR Energy Limited - India
- Global Green Power PLC Corporation, Philippines
- CIMB Investment Bank - Malaysia
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