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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, 01 November 16
IMPROVEMENT ON THE DEMAND SIDE ONLY BUT THE SUPPLY SIDE IS WORSE OFF - BIMCO
Back in May, BIMCO disclosed a projected “road to recovery” for the dry bulk shipping industry. The main message back then on what the ...
Monday, 31 October 16
INDONESIAN 5000 GAR COAL ROSE 5.56% WEEK OVER WEEK - CS COAL INDEX
COALspot.com: The price for thermal coal has recovered substantially since April 2016. The China’s new policy on its domestic coal miners, th ...
Friday, 28 October 16
STEAM COAL IMPORTS: CHINA AND INDIA'S ROLE REVERSALS - BEN TRIMMEL
While a sharp decline in European imports is a key driver of the expected fall in steam coal trade this year, China and India remain leading actors ...
Friday, 28 October 16
U.S. WEEKLY COAL OUTPUT ROSE DURING THE WEEK ENDING OCTOBER 22 - EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 16.5 million short ton ...
Thursday, 27 October 16
73.08 PERCENT OF COAL PRODUCERS PREDICTED INDIA WILL NOT STOP COAL IMPORTS IN 2 TO 3 YEARS - POLL
COALspot released its weekly opinion poll "How likely do you think India will STOP thermal coal imports in 2-3 years?" this Monday.
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- Coastal Gujarat Power Limited - India
- Electricity Generating Authority of Thailand
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Asmin Koalindo Tuhup - Indonesia
- Minerals Council of Australia
- International Coal Ventures Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Dalmia Cement Bharat India
- McConnell Dowell - Australia
- GAC Shipping (India) Pvt Ltd
- Edison Trading Spa - Italy
- Mercuria Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Georgia Ports Authority, United States
- Power Finance Corporation Ltd., India
- Altura Mining Limited, Indonesia
- Africa Commodities Group - South Africa
- Bhushan Steel Limited - India
- Central Java Power - Indonesia
- Goldman Sachs - Singapore
- Renaissance Capital - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Australian Coal Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Simpson Spence & Young - Indonesia
- Mjunction Services Limited - India
- SMC Global Power, Philippines
- Deloitte Consulting - India
- Global Green Power PLC Corporation, Philippines
- Wood Mackenzie - Singapore
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- The State Trading Corporation of India Ltd
- Australian Commodity Traders Exchange
- IEA Clean Coal Centre - UK
- Standard Chartered Bank - UAE
- Kapuas Tunggal Persada - Indonesia
- Economic Council, Georgia
- Sinarmas Energy and Mining - Indonesia
- Coalindo Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Grasim Industreis Ltd - India
- Commonwealth Bank - Australia
- Indogreen Group - Indonesia
- Ministry of Transport, Egypt
- Sical Logistics Limited - India
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
- Port Waratah Coal Services - Australia
- Price Waterhouse Coopers - Russia
- Indika Energy - Indonesia
- Indonesian Coal Mining Association
- Uttam Galva Steels Limited - India
- Intertek Mineral Services - Indonesia
- Antam Resourcindo - Indonesia
- Chamber of Mines of South Africa
- New Zealand Coal & Carbon
- LBH Netherlands Bv - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Interocean Group of Companies - India
- Energy Link Ltd, New Zealand
- Energy Development Corp, Philippines
- Aditya Birla Group - India
- Madhucon Powers Ltd - India
- Merrill Lynch Commodities Europe
- Sakthi Sugars Limited - India
- Vedanta Resources Plc - India
- Larsen & Toubro Limited - India
- London Commodity Brokers - England
- Timah Investasi Mineral - Indoneisa
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
- ICICI Bank Limited - India
- Mercator Lines Limited - India
- CNBM International Corporation - China
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- Miang Besar Coal Terminal - Indonesia
- Thai Mozambique Logistica
- Kalimantan Lumbung Energi - Indonesia
- Marubeni Corporation - India
- Ambuja Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Sree Jayajothi Cements Limited - India
- Sojitz Corporation - Japan
- VISA Power Limited - India
- Petron Corporation, Philippines
- Vizag Seaport Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Riau Bara Harum - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Posco Energy - South Korea
- Lanco Infratech Ltd - India
- Parliament of New Zealand
- Trasteel International SA, Italy
- San Jose City I Power Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- PowerSource Philippines DevCo
- IHS Mccloskey Coal Group - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PTC India Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GVK Power & Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ind-Barath Power Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Anglo American - United Kingdom
- Samtan Co., Ltd - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- MS Steel International - UAE
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Chettinad Cement Corporation Ltd - India
- Singapore Mercantile Exchange
- Medco Energi Mining Internasional
- TNB Fuel Sdn Bhd - Malaysia
- Cement Manufacturers Association - India
- Directorate General of MIneral and Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Makarim & Taira - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Orica Australia Pty. Ltd.
- Planning Commission, India
- Parry Sugars Refinery, India
- Bukit Asam (Persero) Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- White Energy Company Limited
- Essar Steel Hazira Ltd - India
- Jindal Steel & Power Ltd - India
- Meralco Power Generation, Philippines
- Star Paper Mills Limited - India
- Bhoruka Overseas - Indonesia
- Bulk Trading Sa - Switzerland
- Gujarat Mineral Development Corp Ltd - India
- Iligan Light & Power Inc, Philippines
- Wilmar Investment Holdings
- South Luzon Thermal Energy Corporation
- Global Business Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- Jaiprakash Power Ventures ltd
- Formosa Plastics Group - Taiwan
- Electricity Authority, New Zealand
- Bharathi Cement Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Barasentosa Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Global Coal Blending Company Limited - Australia
- Tata Chemicals Ltd - India
- Directorate Of Revenue Intelligence - India
- Savvy Resources Ltd - HongKong
- Kartika Selabumi Mining - Indonesia
- Heidelberg Cement - Germany
- Bhatia International Limited - India
- Xindia Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Kideco Jaya Agung - Indonesia
- TeaM Sual Corporation - Philippines
- The Treasury - Australian Government
- Rio Tinto Coal - Australia
- Orica Mining Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Attock Cement Pakistan Limited
- Straits Asia Resources Limited - Singapore
- Kaltim Prima Coal - Indonesia
- Videocon Industries ltd - India
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- Romanian Commodities Exchange
- Bayan Resources Tbk. - Indonesia
- Sarangani Energy Corporation, Philippines
- Ministry of Mines - Canada
- Tamil Nadu electricity Board
- Banpu Public Company Limited - Thailand
- Krishnapatnam Port Company Ltd. - India
- Independent Power Producers Association of India
- Eastern Energy - Thailand
- Bukit Makmur.PT - Indonesia
- Bangladesh Power Developement Board
- GMR Energy Limited - India
- Ministry of Finance - Indonesia
- Baramulti Group, Indonesia
- Pendopo Energi Batubara - Indonesia
- Salva Resources Pvt Ltd - India
- Latin American Coal - Colombia
- SMG Consultants - Indonesia
- Indo Tambangraya Megah - Indonesia
- Therma Luzon, Inc, Philippines
- Malabar Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Siam City Cement PLC, Thailand
- Aboitiz Power Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Borneo Indobara - Indonesia
- Coal and Oil Company - UAE
- Indian Oil Corporation Limited
- Siam City Cement - Thailand
- The University of Queensland
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