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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, 20 June 16
CS COAL INDICES CONTINUE UPWARD TREND SINCE END APRIL
COALspot.com: Average 5000 GAR coal index of Indonesian origin was up again by 0.05 percent week over week to averaging $39.39 per ton this past we ...
Monday, 20 June 16
THE BDI HAS FELL 23 POINTS WEEK OVER WEEK
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities declined this past week. The BDI was fell 3.77 percent fr ...
Friday, 17 June 16
CHINA'S NEW POLICY TO REDUCE WASTE IN RENEWABLE ENERGY - FITCH
Chinese renewable energy producers are likely to benefit from a new policy that guarantees a minimum amount of solar and wind power is purchased in ...
Friday, 17 June 16
KOMIPO INVITES BIDS FOR BITUMINOUS COAL FOR BORYEONG POWER PLANT
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 ...
Friday, 17 June 16
U.S WEEKLY COAL PRODUCTION UP 7.7% - EIA
COALspot.com – U.S., the world’s one of the largest coal producer has produced approximately totalled an estimated 12.9 million short t ...
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- Central Java Power - Indonesia
- London Commodity Brokers - England
- Sakthi Sugars Limited - India
- Planning Commission, India
- Meralco Power Generation, Philippines
- Salva Resources Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Dalmia Cement Bharat India
- Global Green Power PLC Corporation, Philippines
- Energy Development Corp, Philippines
- Orica Mining Services - Indonesia
- Ministry of Finance - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- Asmin Koalindo Tuhup - Indonesia
- San Jose City I Power Corp, Philippines
- Madhucon Powers Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Independent Power Producers Association of India
- Ministry of Mines - Canada
- Karbindo Abesyapradhi - Indoneisa
- Iligan Light & Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Indika Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Australian Commodity Traders Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Edison Trading Spa - Italy
- Holcim Trading Pte Ltd - Singapore
- IEA Clean Coal Centre - UK
- Merrill Lynch Commodities Europe
- Tamil Nadu electricity Board
- GAC Shipping (India) Pvt Ltd
- Samtan Co., Ltd - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Directorate Of Revenue Intelligence - India
- India Bulls Power Limited - India
- Coastal Gujarat Power Limited - India
- Larsen & Toubro Limited - India
- Karaikal Port Pvt Ltd - India
- GMR Energy Limited - India
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Kobexindo Tractors - Indoneisa
- Binh Thuan Hamico - Vietnam
- Antam Resourcindo - Indonesia
- Global Business Power Corporation, Philippines
- SMG Consultants - Indonesia
- Intertek Mineral Services - Indonesia
- Central Electricity Authority - India
- Australian Coal Association
- Thiess Contractors Indonesia
- Coalindo Energy - Indonesia
- Riau Bara Harum - Indonesia
- TeaM Sual Corporation - Philippines
- Singapore Mercantile Exchange
- Metalloyd Limited - United Kingdom
- Bhatia International Limited - India
- Petron Corporation, Philippines
- Chamber of Mines of South Africa
- Goldman Sachs - Singapore
- Economic Council, Georgia
- Makarim & Taira - Indonesia
- Romanian Commodities Exchange
- Semirara Mining Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Banpu Public Company Limited - Thailand
- Essar Steel Hazira Ltd - India
- Vedanta Resources Plc - India
- Bukit Baiduri Energy - Indonesia
- PTC India Limited - India
- Anglo American - United Kingdom
- Interocean Group of Companies - India
- Sarangani Energy Corporation, Philippines
- Baramulti Group, Indonesia
- Georgia Ports Authority, United States
- Grasim Industreis Ltd - India
- Mercuria Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Indo Tambangraya Megah - Indonesia
- Thai Mozambique Logistica
- ASAPP Information Group - India
- Parry Sugars Refinery, India
- Vizag Seaport Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Orica Australia Pty. Ltd.
- Vijayanagar Sugar Pvt Ltd - India
- Attock Cement Pakistan Limited
- Meenaskhi Energy Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Deloitte Consulting - India
- Kepco SPC Power Corporation, Philippines
- Indian Energy Exchange, India
- Global Coal Blending Company Limited - Australia
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- Renaissance Capital - South Africa
- AsiaOL BioFuels Corp., Philippines
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- Timah Investasi Mineral - Indoneisa
- Cement Manufacturers Association - India
- Sojitz Corporation - Japan
- Billiton Holdings Pty Ltd - Australia
- Bangladesh Power Developement Board
- Kumho Petrochemical, South Korea
- Xindia Steels Limited - India
- Videocon Industries ltd - India
- Globalindo Alam Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Commonwealth Bank - Australia
- Coal and Oil Company - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Generating Authority of Thailand
- Bharathi Cement Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Simpson Spence & Young - Indonesia
- GVK Power & Infra Limited - India
- Wood Mackenzie - Singapore
- Rashtriya Ispat Nigam Limited - India
- Eastern Energy - Thailand
- Ambuja Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- CNBM International Corporation - China
- The State Trading Corporation of India Ltd
- Jindal Steel & Power Ltd - India
- VISA Power Limited - India
- ICICI Bank Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Medco Energi Mining Internasional
- Lanco Infratech Ltd - India
- Indogreen Group - Indonesia
- The University of Queensland
- New Zealand Coal & Carbon
- Electricity Authority, New Zealand
- Parliament of New Zealand
- Kapuas Tunggal Persada - Indonesia
- CIMB Investment Bank - Malaysia
- Chettinad Cement Corporation Ltd - India
- Mercator Lines Limited - India
- Sinarmas Energy and Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Energy Link Ltd, New Zealand
- Pendopo Energi Batubara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Sidhee Cement - India
- The Treasury - Australian Government
- Posco Energy - South Korea
- Borneo Indobara - Indonesia
- Mjunction Services Limited - India
- Trasteel International SA, Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petrochimia International Co. Ltd.- Taiwan
- Bhoruka Overseas - Indonesia
- Jaiprakash Power Ventures ltd
- Alfred C Toepfer International GmbH - Germany
- Ind-Barath Power Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Latin American Coal - Colombia
- Carbofer General Trading SA - India
- TNB Fuel Sdn Bhd - Malaysia
- Sree Jayajothi Cements Limited - India
- Wilmar Investment Holdings
- MS Steel International - UAE
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- SMC Global Power, Philippines
- Aditya Birla Group - India
- Price Waterhouse Coopers - Russia
- South Luzon Thermal Energy Corporation
- Indian Oil Corporation Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Heidelberg Cement - Germany
- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Standard Chartered Bank - UAE
- Port Waratah Coal Services - Australia
- Uttam Galva Steels Limited - India
- Agrawal Coal Company - India
- Africa Commodities Group - South Africa
- IHS Mccloskey Coal Group - USA
- Tata Chemicals Ltd - India
- Savvy Resources Ltd - HongKong
- Malabar Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- SN Aboitiz Power Inc, Philippines
- Sical Logistics Limited - India
- Rio Tinto Coal - Australia
- Kartika Selabumi Mining - Indonesia
- Marubeni Corporation - India
- Therma Luzon, Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Maheswari Brothers Coal Limited - India
- European Bulk Services B.V. - Netherlands
- McConnell Dowell - Australia
- Eastern Coal Council - USA
- Siam City Cement - Thailand
- Mintek Dendrill Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Electricity Regulatory Commission - India
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