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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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Wednesday, 06 July 16
KOMIPO INVITES BIDS FOR 780000 MT OF BITUMINOUS COAL
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a new tender for 780,000 Metric Tons of Bituminous Coal for its B ...
Wednesday, 06 July 16
MARKET INSIGHT - VASSILIS VASSILIOU
After a fairly silent first half of the year in the ship repair sector, we have finally a harmonized workload in the shipyards around the world. Ma ...
Tuesday, 05 July 16
DRY BULK SHIPPING'S RECOVERY NOT SEEN UNTIL 2018 - SGX
SGX freight derivative volumes totaled 36,542 contracts in June (-28% m/m; +52% y/y), while open interest averaged 121,189 contracts during the mon ...
Tuesday, 05 July 16
SPOT COAL INDEXES FOR INDONESIAN COAL CONTINUE TO HOLD FIRM - CS COAL INDEX
COALspot.com: Average 5000 GAR coal index of Indonesian origin was up by 0.83 percent week over week to averaging $39.98 per ton this past week, sh ...
Monday, 04 July 16
INDONESIA COAL PRICE REFERENCE CLIMBED 2.30% IN JULY
COALspot.com: The Indonesia Coal Benchmark Price increased in July 2016.
The Director General of Mineral and Coal of Indonesia, the r ...
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- Interocean Group of Companies - India
- Globalindo Alam Lestari - Indonesia
- Malabar Cements Ltd - India
- Bangladesh Power Developement Board
- Trasteel International SA, Italy
- Kobexindo Tractors - Indoneisa
- Latin American Coal - Colombia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- London Commodity Brokers - England
- Vedanta Resources Plc - India
- Petrochimia International Co. Ltd.- Taiwan
- Baramulti Group, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- GVK Power & Infra Limited - India
- Samtan Co., Ltd - South Korea
- Ministry of Transport, Egypt
- Grasim Industreis Ltd - India
- IHS Mccloskey Coal Group - USA
- Wood Mackenzie - Singapore
- Maharashtra Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Vizag Seaport Private Limited - India
- Indian Oil Corporation Limited
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
- Global Coal Blending Company Limited - Australia
- Sindya Power Generating Company Private Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cigading International Bulk Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- The Treasury - Australian Government
- Savvy Resources Ltd - HongKong
- Independent Power Producers Association of India
- The State Trading Corporation of India Ltd
- PetroVietnam Power Coal Import and Supply Company
- GAC Shipping (India) Pvt Ltd
- Wilmar Investment Holdings
- Kartika Selabumi Mining - Indonesia
- Siam City Cement PLC, Thailand
- European Bulk Services B.V. - Netherlands
- Dalmia Cement Bharat India
- Price Waterhouse Coopers - Russia
- Central Java Power - Indonesia
- Mercuria Energy - Indonesia
- Georgia Ports Authority, United States
- Tata Chemicals Ltd - India
- Indonesian Coal Mining Association
- Orica Mining Services - Indonesia
- MS Steel International - UAE
- Gujarat Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- PNOC Exploration Corporation - Philippines
- Therma Luzon, Inc, Philippines
- CNBM International Corporation - China
- SMG Consultants - Indonesia
- Bayan Resources Tbk. - Indonesia
- Indogreen Group - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Karaikal Port Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Carbofer General Trading SA - India
- Videocon Industries ltd - India
- Uttam Galva Steels Limited - India
- PTC India Limited - India
- Bhushan Steel Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Attock Cement Pakistan Limited
- Manunggal Multi Energi - Indonesia
- Metalloyd Limited - United Kingdom
- McConnell Dowell - Australia
- Iligan Light & Power Inc, Philippines
- Indian Energy Exchange, India
- CIMB Investment Bank - Malaysia
- Goldman Sachs - Singapore
- SN Aboitiz Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Romanian Commodities Exchange
- Bharathi Cement Corporation - India
- Indika Energy - Indonesia
- GMR Energy Limited - India
- Ind-Barath Power Infra Limited - India
- White Energy Company Limited
- Merrill Lynch Commodities Europe
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Bhoruka Overseas - Indonesia
- VISA Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Anglo American - United Kingdom
- Larsen & Toubro Limited - India
- TeaM Sual Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Jaiprakash Power Ventures ltd
- Rashtriya Ispat Nigam Limited - India
- Coalindo Energy - Indonesia
- The University of Queensland
- PowerSource Philippines DevCo
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Sical Logistics Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Oldendorff Carriers - Singapore
- Singapore Mercantile Exchange
- Standard Chartered Bank - UAE
- Sakthi Sugars Limited - India
- Makarim & Taira - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Timah Investasi Mineral - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thai Mozambique Logistica
- Simpson Spence & Young - Indonesia
- Africa Commodities Group - South Africa
- Semirara Mining Corp, Philippines
- Central Electricity Authority - India
- Medco Energi Mining Internasional
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Posco Energy - South Korea
- Petron Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Eastern Coal Council - USA
- Global Green Power PLC Corporation, Philippines
- Siam City Cement - Thailand
- Mercator Lines Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Port Waratah Coal Services - Australia
- Meralco Power Generation, Philippines
- Thiess Contractors Indonesia
- Indo Tambangraya Megah - Indonesia
- Madhucon Powers Ltd - India
- LBH Netherlands Bv - Netherlands
- India Bulls Power Limited - India
- Barasentosa Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Coal and Oil Company - UAE
- Bukit Baiduri Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Heidelberg Cement - Germany
- Kohat Cement Company Ltd. - Pakistan
- Bulk Trading Sa - Switzerland
- Deloitte Consulting - India
- Holcim Trading Pte Ltd - Singapore
- Agrawal Coal Company - India
- Renaissance Capital - South Africa
- Parry Sugars Refinery, India
- Altura Mining Limited, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Formosa Plastics Group - Taiwan
- Orica Australia Pty. Ltd.
- Kumho Petrochemical, South Korea
- Star Paper Mills Limited - India
- Australian Coal Association
- Energy Development Corp, Philippines
- Kideco Jaya Agung - Indonesia
- AsiaOL BioFuels Corp., Philippines
- ICICI Bank Limited - India
- Ambuja Cements Ltd - India
- SMC Global Power, Philippines
- Mjunction Services Limited - India
- Tamil Nadu electricity Board
- Electricity Generating Authority of Thailand
- Rio Tinto Coal - Australia
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Economic Council, Georgia
- Marubeni Corporation - India
- South Luzon Thermal Energy Corporation
- Commonwealth Bank - Australia
- Cement Manufacturers Association - India
- OPG Power Generation Pvt Ltd - India
- Ministry of Finance - Indonesia
- Jindal Steel & Power Ltd - India
- IEA Clean Coal Centre - UK
- Lanco Infratech Ltd - India
- Gujarat Sidhee Cement - India
- Bukit Asam (Persero) Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Sarangani Energy Corporation, Philippines
- Edison Trading Spa - Italy
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Sojitz Corporation - Japan
- Salva Resources Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Toyota Tsusho Corporation, Japan
- Sree Jayajothi Cements Limited - India
- Bhatia International Limited - India
- Chamber of Mines of South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Energy - Thailand
- Electricity Authority, New Zealand
- Xindia Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Banpu Public Company Limited - Thailand
- Mintek Dendrill Indonesia
- Alfred C Toepfer International GmbH - Germany
- Borneo Indobara - Indonesia
- New Zealand Coal & Carbon
- Parliament of New Zealand
- Aboitiz Power Corporation - Philippines
- Planning Commission, India
- Neyveli Lignite Corporation Ltd, - India
- International Coal Ventures Pvt Ltd - India
- Aditya Birla Group - India
- Meenaskhi Energy Private Limited - India
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