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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, 27 April 16
INDONESIAN COAL MINER KIDECO REPORTED NET PROFIT OF US$138.1 MILLION IN 2015
COALspot.com: Kideco Jaya Agung, one of the Indonesia's leading coal miners has reported net profit of US$138.1 million on revenue of US$1.65 b ...
Tuesday, 26 April 16
INDONESIA BANNED COAL EXPORTS TO PHILIPPINES BY BARGES DUE TO SECURITY CONCERN
COALspot.com: The Ministry of Energy and Mineral Resources (ESDM) on behalf of the government of Indonesia has Freeze coal exports by barges to Phi ...
Tuesday, 26 April 16
NEWBUILDING DEMAND DOWN EVERYWHERE? - CLARKSONS
Newbuild activity provides one indication of an owner country’s likely future fleet growth, though secondhand sale and purchase and demolitio ...
Monday, 25 April 16
CHINESE STEEL PRICE SURGE NOT SUSTAINABLE - FITCH
The rapid increase in Chinese steel prices so far this year is not sustainable, as it is largely due to a seasonal pick-up in construction and elev ...
Monday, 25 April 16
WEEKLY CS (I) COAL INDICES END ALMOST FLAT
COALspot.com: Average 5000 GAR coal index of Indonesian origin up 0.05 percent week over week to averaging $38.67 per ton on this past Friday, acco ...
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- Malabar Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Power Finance Corporation Ltd., India
- Cigading International Bulk Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Karbindo Abesyapradhi - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- GAC Shipping (India) Pvt Ltd
- Thai Mozambique Logistica
- Mintek Dendrill Indonesia
- Coalindo Energy - Indonesia
- Sojitz Corporation - Japan
- Australian Commodity Traders Exchange
- Minerals Council of Australia
- Vijayanagar Sugar Pvt Ltd - India
- Chamber of Mines of South Africa
- Ambuja Cements Ltd - India
- Renaissance Capital - South Africa
- Siam City Cement PLC, Thailand
- Singapore Mercantile Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chettinad Cement Corporation Ltd - India
- IEA Clean Coal Centre - UK
- Pipit Mutiara Jaya. PT, Indonesia
- Mercator Lines Limited - India
- Jaiprakash Power Ventures ltd
- Orica Mining Services - Indonesia
- Sical Logistics Limited - India
- Latin American Coal - Colombia
- PTC India Limited - India
- Semirara Mining Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Lanco Infratech Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Deloitte Consulting - India
- PetroVietnam Power Coal Import and Supply Company
- Makarim & Taira - Indonesia
- Kartika Selabumi Mining - Indonesia
- Thiess Contractors Indonesia
- Wood Mackenzie - Singapore
- SMG Consultants - Indonesia
- Australian Coal Association
- GMR Energy Limited - India
- Leighton Contractors Pty Ltd - Australia
- Medco Energi Mining Internasional
- IHS Mccloskey Coal Group - USA
- Directorate General of MIneral and Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Grasim Industreis Ltd - India
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- Agrawal Coal Company - India
- Samtan Co., Ltd - South Korea
- Indogreen Group - Indonesia
- Tamil Nadu electricity Board
- Dalmia Cement Bharat India
- Heidelberg Cement - Germany
- Krishnapatnam Port Company Ltd. - India
- European Bulk Services B.V. - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- Billiton Holdings Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Rio Tinto Coal - Australia
- Riau Bara Harum - Indonesia
- Simpson Spence & Young - Indonesia
- Economic Council, Georgia
- Attock Cement Pakistan Limited
- PNOC Exploration Corporation - Philippines
- Commonwealth Bank - Australia
- Sakthi Sugars Limited - India
- CNBM International Corporation - China
- Gujarat Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Star Paper Mills Limited - India
- Rashtriya Ispat Nigam Limited - India
- Barasentosa Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- Madhucon Powers Ltd - India
- Siam City Cement - Thailand
- Orica Australia Pty. Ltd.
- Indian Energy Exchange, India
- Anglo American - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Coal and Oil Company - UAE
- Oldendorff Carriers - Singapore
- Carbofer General Trading SA - India
- Indian Oil Corporation Limited
- Antam Resourcindo - Indonesia
- Kideco Jaya Agung - Indonesia
- Kumho Petrochemical, South Korea
- Sree Jayajothi Cements Limited - India
- ICICI Bank Limited - India
- Xindia Steels Limited - India
- Baramulti Group, Indonesia
- Salva Resources Pvt Ltd - India
- Independent Power Producers Association of India
- Parliament of New Zealand
- Goldman Sachs - Singapore
- London Commodity Brokers - England
- Ind-Barath Power Infra Limited - India
- Energy Development Corp, Philippines
- Videocon Industries ltd - India
- LBH Netherlands Bv - Netherlands
- Altura Mining Limited, Indonesia
- Sindya Power Generating Company Private Ltd
- The Treasury - Australian Government
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ASAPP Information Group - India
- Bhoruka Overseas - Indonesia
- Port Waratah Coal Services - Australia
- Toyota Tsusho Corporation, Japan
- Electricity Generating Authority of Thailand
- Petron Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhushan Steel Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Vedanta Resources Plc - India
- Ministry of Finance - Indonesia
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Karaikal Port Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Marubeni Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- Meralco Power Generation, Philippines
- Jindal Steel & Power Ltd - India
- VISA Power Limited - India
- The University of Queensland
- Alfred C Toepfer International GmbH - Germany
- Banpu Public Company Limited - Thailand
- South Luzon Thermal Energy Corporation
- Iligan Light & Power Inc, Philippines
- Standard Chartered Bank - UAE
- Ministry of Transport, Egypt
- Bharathi Cement Corporation - India
- Sarangani Energy Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Africa Commodities Group - South Africa
- Bhatia International Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Georgia Ports Authority, United States
- Therma Luzon, Inc, Philippines
- Global Business Power Corporation, Philippines
- Interocean Group of Companies - India
- OPG Power Generation Pvt Ltd - India
- SMC Global Power, Philippines
- Bangladesh Power Developement Board
- Essar Steel Hazira Ltd - India
- Mercuria Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Savvy Resources Ltd - HongKong
- Eastern Coal Council - USA
- Global Green Power PLC Corporation, Philippines
- Electricity Authority, New Zealand
- White Energy Company Limited
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- Cement Manufacturers Association - India
- Aditya Birla Group - India
- Bukit Baiduri Energy - Indonesia
- PowerSource Philippines DevCo
- Straits Asia Resources Limited - Singapore
- Wilmar Investment Holdings
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Kobexindo Tractors - Indoneisa
- New Zealand Coal & Carbon
- Aboitiz Power Corporation - Philippines
- Central Java Power - Indonesia
- Parry Sugars Refinery, India
- Directorate Of Revenue Intelligence - India
- Globalindo Alam Lestari - Indonesia
- India Bulls Power Limited - India
- Vizag Seaport Private Limited - India
- Uttam Galva Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- CIMB Investment Bank - Malaysia
- Bayan Resources Tbk. - Indonesia
- The State Trading Corporation of India Ltd
- GVK Power & Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Indonesian Coal Mining Association
- Planning Commission, India
- Central Electricity Authority - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- MS Steel International - UAE
- Intertek Mineral Services - Indonesia
- Eastern Energy - Thailand
- Gujarat Sidhee Cement - India
- Semirara Mining and Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- Mjunction Services Limited - India
- Price Waterhouse Coopers - Russia
- Borneo Indobara - Indonesia
- Maheswari Brothers Coal Limited - India
- Bulk Trading Sa - Switzerland
- Coastal Gujarat Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
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