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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, 18 April 16
INDONESIAN 5000 GAR COAL INDEX DECLINE 1.43 PERCENT WEEK OVER WEEK - CS (I) COAL INDEX
COALspot.com: Average 5000 GAR coal index of Indonesian origin fell 1.43 percent week over week to averaging $38.65 per ton on this past Friday, ac ...
Monday, 18 April 16
SOUTH KOREA STATE-OWNED UTILITY KOMIPO INVITES COAL BIDS FOR BORYEONG POWER PLANT
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a new tender for 70,000 Metric Tons of 4,600 kcal/kg NAR coal for ...
Monday, 18 April 16
SOUTH AFRICA RB1 COAL HAS LOST GROUND IN INDIA; RB2 MAY LOSE GRIP IF THE PRICE CROSSES US$ 50 A TON - TRADERS
COALspot.com: Indian coal consumers preferred to buy South Africa RB2 coal instead of RB1 coal recent months due to RB2's low CFR price level. ...
Monday, 18 April 16
CAPESIZE INDEX ROSE 44.66 PER CENT WEEK OVER WEEK
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities continued to rose this week.
The freight market was ...
Friday, 15 April 16
PANAMAX MARKET CONTINUES TO FIRM - FEARNLEYS
Cape
It has been a positive freight market for the past few weeks, however, this week the market is taking a small breather, says Fearnleys in it ...
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- SMG Consultants - Indonesia
- Mintek Dendrill Indonesia
- Siam City Cement PLC, Thailand
- The Treasury - Australian Government
- VISA Power Limited - India
- PTC India Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Georgia Ports Authority, United States
- Indonesian Coal Mining Association
- TNB Fuel Sdn Bhd - Malaysia
- LBH Netherlands Bv - Netherlands
- Toyota Tsusho Corporation, Japan
- Leighton Contractors Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Kumho Petrochemical, South Korea
- Indika Energy - Indonesia
- Coal and Oil Company - UAE
- Kaltim Prima Coal - Indonesia
- GVK Power & Infra Limited - India
- Vizag Seaport Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Barasentosa Lestari - Indonesia
- Medco Energi Mining Internasional
- PowerSource Philippines DevCo
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Intertek Mineral Services - Indonesia
- Central Java Power - Indonesia
- London Commodity Brokers - England
- Asmin Koalindo Tuhup - Indonesia
- Sree Jayajothi Cements Limited - India
- South Luzon Thermal Energy Corporation
- Eastern Energy - Thailand
- MS Steel International - UAE
- Agrawal Coal Company - India
- Heidelberg Cement - Germany
- Pendopo Energi Batubara - Indonesia
- Coastal Gujarat Power Limited - India
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Electricity Authority, New Zealand
- Altura Mining Limited, Indonesia
- Bukit Baiduri Energy - Indonesia
- Minerals Council of Australia
- PNOC Exploration Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- CNBM International Corporation - China
- San Jose City I Power Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Bharathi Cement Corporation - India
- Bulk Trading Sa - Switzerland
- Standard Chartered Bank - UAE
- Australian Commodity Traders Exchange
- Aditya Birla Group - India
- Samtan Co., Ltd - South Korea
- International Coal Ventures Pvt Ltd - India
- Ministry of Transport, Egypt
- Miang Besar Coal Terminal - Indonesia
- Parry Sugars Refinery, India
- Iligan Light & Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Bhatia International Limited - India
- Indogreen Group - Indonesia
- Sakthi Sugars Limited - India
- Indian Oil Corporation Limited
- India Bulls Power Limited - India
- IEA Clean Coal Centre - UK
- Chamber of Mines of South Africa
- Energy Link Ltd, New Zealand
- Trasteel International SA, Italy
- Lanco Infratech Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Edison Trading Spa - Italy
- Dalmia Cement Bharat India
- Meralco Power Generation, Philippines
- Ministry of Mines - Canada
- Kobexindo Tractors - Indoneisa
- Mercuria Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- Indian Energy Exchange, India
- Economic Council, Georgia
- Parliament of New Zealand
- Central Electricity Authority - India
- Petron Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Energy Development Corp, Philippines
- Gujarat Sidhee Cement - India
- Larsen & Toubro Limited - India
- Bangladesh Power Developement Board
- IHS Mccloskey Coal Group - USA
- Rashtriya Ispat Nigam Limited - India
- Madhucon Powers Ltd - India
- Coalindo Energy - Indonesia
- Uttam Galva Steels Limited - India
- The University of Queensland
- Formosa Plastics Group - Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Merrill Lynch Commodities Europe
- Sojitz Corporation - Japan
- Semirara Mining Corp, Philippines
- TeaM Sual Corporation - Philippines
- Marubeni Corporation - India
- Commonwealth Bank - Australia
- ASAPP Information Group - India
- Maharashtra Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Banpu Public Company Limited - Thailand
- Bhushan Steel Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Sinarmas Energy and Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Price Waterhouse Coopers - Russia
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Independent Power Producers Association of India
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Makarim & Taira - Indonesia
- Planning Commission, India
- Essar Steel Hazira Ltd - India
- Tamil Nadu electricity Board
- Straits Asia Resources Limited - Singapore
- Rio Tinto Coal - Australia
- ICICI Bank Limited - India
- Thiess Contractors Indonesia
- Wood Mackenzie - Singapore
- OPG Power Generation Pvt Ltd - India
- Electricity Generating Authority of Thailand
- New Zealand Coal & Carbon
- Krishnapatnam Port Company Ltd. - India
- Carbofer General Trading SA - India
- Xindia Steels Limited - India
- Goldman Sachs - Singapore
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- Meenaskhi Energy Private Limited - India
- Aboitiz Power Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Antam Resourcindo - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sindya Power Generating Company Private Ltd
- Grasim Industreis Ltd - India
- CIMB Investment Bank - Malaysia
- Ind-Barath Power Infra Limited - India
- Orica Australia Pty. Ltd.
- Jorong Barutama Greston.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Mjunction Services Limited - India
- Mercator Lines Limited - India
- Malabar Cements Ltd - India
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- Borneo Indobara - Indonesia
- Sical Logistics Limited - India
- Deloitte Consulting - India
- GMR Energy Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Baramulti Group, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Interocean Group of Companies - India
- AsiaOL BioFuels Corp., Philippines
- Australian Coal Association
- Port Waratah Coal Services - Australia
- Orica Mining Services - Indonesia
- Jaiprakash Power Ventures ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- McConnell Dowell - Australia
- Singapore Mercantile Exchange
- Latin American Coal - Colombia
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- Offshore Bulk Terminal Pte Ltd, Singapore
- Alfred C Toepfer International GmbH - Germany
- Simpson Spence & Young - Indonesia
- Wilmar Investment Holdings
- Star Paper Mills Limited - India
- Ambuja Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Anglo American - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Globalindo Alam Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- Power Finance Corporation Ltd., India
- Bukit Asam (Persero) Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Tata Chemicals Ltd - India
- Ministry of Finance - Indonesia
- Attock Cement Pakistan Limited
- Ceylon Electricity Board - Sri Lanka
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Timah Investasi Mineral - Indoneisa
- Siam City Cement - Thailand
- Manunggal Multi Energi - Indonesia
- Posco Energy - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Green Power PLC Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Africa Commodities Group - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Renaissance Capital - South Africa
- The State Trading Corporation of India Ltd
- GAC Shipping (India) Pvt Ltd
- Maheswari Brothers Coal Limited - India
- Videocon Industries ltd - India
- Global Business Power Corporation, Philippines
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