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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, 15 March 16
PORT OF NEWCASTLE SHIPPED 12.78 MMT OF COAL IN FEBRUARY 2016
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port has shipped AU$1,110.5 mi ...
Tuesday, 15 March 16
ADARO ENERGY LOWERED ITS COAL CASH COST BY 16% TO US$ 27.98 PER TONE IN 2015
Difficult Coal Market Condition Persists in 2015, Adaro Lowers Costs, Reduces Capital Spending and Maintains Solid Liquidity.
PT Adaro E ...
Monday, 14 March 16
THE CS 50 INDEX ROSE $0.16 OR, 0.41% TO $38.82 A TON
COALspot.com: Average 5000 GAR coal index of Indonesian origin rose 0.41 percent week over week to averaging $38.82 per ton on this past Friday, ac ...
Monday, 14 March 16
THE BALTIC EXCHANGE CONTINUED TO ROSE THIS PAST WEEK
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities continued to rise this week helped by higher rates for pa ...
Saturday, 12 March 16
PLN, COAL COMPANIES IN TALKS ABOUT PRICES - THE JAKARTA POST
Following a study that predicted that Indonesia would struggle to provide coal for its power stations in the near future, the government will facil ...
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- Riau Bara Harum - Indonesia
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- LBH Netherlands Bv - Netherlands
- Jindal Steel & Power Ltd - India
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- Price Waterhouse Coopers - Russia
- Georgia Ports Authority, United States
- Gujarat Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Vizag Seaport Private Limited - India
- Savvy Resources Ltd - HongKong
- Manunggal Multi Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Billiton Holdings Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- Baramulti Group, Indonesia
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- Mjunction Services Limited - India
- Australian Coal Association
- Bukit Makmur.PT - Indonesia
- PTC India Limited - India
- Global Green Power PLC Corporation, Philippines
- Tamil Nadu electricity Board
- Chettinad Cement Corporation Ltd - India
- GMR Energy Limited - India
- Economic Council, Georgia
- Commonwealth Bank - Australia
- Vedanta Resources Plc - India
- Semirara Mining Corp, Philippines
- Sojitz Corporation - Japan
- SMC Global Power, Philippines
- Deloitte Consulting - India
- Videocon Industries ltd - India
- Meralco Power Generation, Philippines
- Bukit Baiduri Energy - Indonesia
- Antam Resourcindo - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Commodity Traders Exchange
- Bhatia International Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Coal Council - USA
- Cement Manufacturers Association - India
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- Globalindo Alam Lestari - Indonesia
- Medco Energi Mining Internasional
- Mintek Dendrill Indonesia
- Bhoruka Overseas - Indonesia
- Bharathi Cement Corporation - India
- Therma Luzon, Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Latin American Coal - Colombia
- Minerals Council of Australia
- IHS Mccloskey Coal Group - USA
- GN Power Mariveles Coal Plant, Philippines
- Sical Logistics Limited - India
- Thai Mozambique Logistica
- Sindya Power Generating Company Private Ltd
- Krishnapatnam Port Company Ltd. - India
- White Energy Company Limited
- Madhucon Powers Ltd - India
- Simpson Spence & Young - Indonesia
- PNOC Exploration Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Bulk Trading Sa - Switzerland
- VISA Power Limited - India
- Romanian Commodities Exchange
- Planning Commission, India
- Indonesian Coal Mining Association
- Maheswari Brothers Coal Limited - India
- Banpu Public Company Limited - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- San Jose City I Power Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Kalimantan Lumbung Energi - Indonesia
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Bangladesh Power Developement Board
- Coastal Gujarat Power Limited - India
- Formosa Plastics Group - Taiwan
- ICICI Bank Limited - India
- Africa Commodities Group - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Timah Investasi Mineral - Indoneisa
- Interocean Group of Companies - India
- Energy Link Ltd, New Zealand
- Salva Resources Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Larsen & Toubro Limited - India
- Jaiprakash Power Ventures ltd
- Toyota Tsusho Corporation, Japan
- PowerSource Philippines DevCo
- GAC Shipping (India) Pvt Ltd
- Intertek Mineral Services - Indonesia
- Indian Oil Corporation Limited
- Uttam Galva Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Energy - Thailand
- Indian Energy Exchange, India
- Goldman Sachs - Singapore
- Tata Chemicals Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- The Treasury - Australian Government
- Bhushan Steel Limited - India
- Iligan Light & Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Holcim Trading Pte Ltd - Singapore
- Directorate Of Revenue Intelligence - India
- Karaikal Port Pvt Ltd - India
- India Bulls Power Limited - India
- SMG Consultants - Indonesia
- Pendopo Energi Batubara - Indonesia
- Trasteel International SA, Italy
- Global Business Power Corporation, Philippines
- Central Java Power - Indonesia
- Dalmia Cement Bharat India
- GVK Power & Infra Limited - India
- Thiess Contractors Indonesia
- Alfred C Toepfer International GmbH - Germany
- Agrawal Coal Company - India
- Singapore Mercantile Exchange
- IEA Clean Coal Centre - UK
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- South Luzon Thermal Energy Corporation
- Sakthi Sugars Limited - India
- Siam City Cement - Thailand
- Meenaskhi Energy Private Limited - India
- Ind-Barath Power Infra Limited - India
- Grasim Industreis Ltd - India
- Essar Steel Hazira Ltd - India
- Kideco Jaya Agung - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Heidelberg Cement - Germany
- Binh Thuan Hamico - Vietnam
- OPG Power Generation Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Ministry of Transport, Egypt
- Straits Asia Resources Limited - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Ministry of Mines - Canada
- Semirara Mining and Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Miang Besar Coal Terminal - Indonesia
- Lanco Infratech Ltd - India
- Sarangani Energy Corporation, Philippines
- Altura Mining Limited, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Kepco SPC Power Corporation, Philippines
- Malabar Cements Ltd - India
- Anglo American - United Kingdom
- Marubeni Corporation - India
- Xindia Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Electricity Generating Authority of Thailand
- Indo Tambangraya Megah - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Mercator Lines Limited - India
- Cigading International Bulk Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Neyveli Lignite Corporation Ltd, - India
- Rio Tinto Coal - Australia
- ASAPP Information Group - India
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- Maharashtra Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Indogreen Group - Indonesia
- Posco Energy - South Korea
- Kaltim Prima Coal - Indonesia
- Coalindo Energy - Indonesia
- Central Electricity Authority - India
- Global Coal Blending Company Limited - Australia
- Bayan Resources Tbk. - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Sree Jayajothi Cements Limited - India
- Siam City Cement PLC, Thailand
- Parry Sugars Refinery, India
- The University of Queensland
- Offshore Bulk Terminal Pte Ltd, Singapore
- TeaM Sual Corporation - Philippines
- Standard Chartered Bank - UAE
- Indika Energy - Indonesia
- Parliament of New Zealand
- Ceylon Electricity Board - Sri Lanka
- London Commodity Brokers - England
- Attock Cement Pakistan Limited
- Wood Mackenzie - Singapore
- Energy Development Corp, Philippines
- Makarim & Taira - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Kumho Petrochemical, South Korea
- MS Steel International - UAE
- Carbofer General Trading SA - India
- Orica Mining Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Ministry of Finance - Indonesia
- Independent Power Producers Association of India
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