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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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Thursday, 03 March 16
BDI FURTHER STRENGTHENING; THE INCREASE IN RATES WAS NOT SUBSTANTIAL
COALspot.com: The BDI closed off on a positive note for a second week in a row, further strengthening the belief that the market might be bottoming ...
Thursday, 03 March 16
RIO TINTO COMPLETES SALE OF INTEREST IN BENGALLA JOINT VENTURE FOR US$616.7 MILLION
COALspot.com: Rio Tinto has completed the sale of its 40 per cent interest in the Bengalla coal Joint Venture in Australia to New Hope Corporation ...
Wednesday, 02 March 16
RE-EVALUATION OF MINING LICENSES CLEAN AND CLEAR STATUS IN INDONESIA
COALspot.com: In connection with the transfer of mining authority from Regents/Mayors to Governors1 and from Regents/Mayors and Governors to t ...
Wednesday, 02 March 16
OIL MY GOD.....!!!!
OIL my GOD….!!!!
The oil price “crash” that started in 2014 was caused by a glut of practically unwanted oil. Producers had be ...
Tuesday, 01 March 16
CS 42 (4200 GAR) COAL INDEX CLOSED AT US$ 27.11 A TON ON 26 FEBRUARY
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 0.31 percent week over week to averaging $38.77 per ton on this past Friday, ...
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- GVK Power & Infra Limited - India
- Indika Energy - Indonesia
- ASAPP Information Group - India
- Central Electricity Authority - India
- Miang Besar Coal Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Jaiprakash Power Ventures ltd
- Directorate Of Revenue Intelligence - India
- McConnell Dowell - Australia
- Rio Tinto Coal - Australia
- Indogreen Group - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bangladesh Power Developement Board
- Merrill Lynch Commodities Europe
- Metalloyd Limited - United Kingdom
- London Commodity Brokers - England
- IEA Clean Coal Centre - UK
- Georgia Ports Authority, United States
- Pendopo Energi Batubara - Indonesia
- Global Business Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Economic Council, Georgia
- Deloitte Consulting - India
- Aditya Birla Group - India
- Medco Energi Mining Internasional
- European Bulk Services B.V. - Netherlands
- Sakthi Sugars Limited - India
- Jindal Steel & Power Ltd - India
- Timah Investasi Mineral - Indoneisa
- Karaikal Port Pvt Ltd - India
- Commonwealth Bank - Australia
- Savvy Resources Ltd - HongKong
- Coastal Gujarat Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Thai Mozambique Logistica
- Riau Bara Harum - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- PNOC Exploration Corporation - Philippines
- Planning Commission, India
- IHS Mccloskey Coal Group - USA
- South Luzon Thermal Energy Corporation
- Posco Energy - South Korea
- Toyota Tsusho Corporation, Japan
- San Jose City I Power Corp, Philippines
- Ministry of Finance - Indonesia
- Makarim & Taira - Indonesia
- SMC Global Power, Philippines
- Iligan Light & Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Orica Australia Pty. Ltd.
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- Larsen & Toubro Limited - India
- The State Trading Corporation of India Ltd
- Dalmia Cement Bharat India
- Lanco Infratech Ltd - India
- Sical Logistics Limited - India
- Ministry of Transport, Egypt
- CNBM International Corporation - China
- OPG Power Generation Pvt Ltd - India
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Sojitz Corporation - Japan
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Antam Resourcindo - Indonesia
- Trasteel International SA, Italy
- Heidelberg Cement - Germany
- MS Steel International - UAE
- Gujarat Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Aboitiz Power Corporation - Philippines
- VISA Power Limited - India
- Indian Oil Corporation Limited
- Rashtriya Ispat Nigam Limited - India
- Coal and Oil Company - UAE
- Edison Trading Spa - Italy
- Anglo American - United Kingdom
- Mercator Lines Limited - India
- Marubeni Corporation - India
- Banpu Public Company Limited - Thailand
- Sree Jayajothi Cements Limited - India
- Bharathi Cement Corporation - India
- Ambuja Cements Ltd - India
- GMR Energy Limited - India
- Holcim Trading Pte Ltd - Singapore
- Maheswari Brothers Coal Limited - India
- Indonesian Coal Mining Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Therma Luzon, Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercuria Energy - Indonesia
- ICICI Bank Limited - India
- Chamber of Mines of South Africa
- Videocon Industries ltd - India
- LBH Netherlands Bv - Netherlands
- Manunggal Multi Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Parry Sugars Refinery, India
- Simpson Spence & Young - Indonesia
- Kideco Jaya Agung - Indonesia
- Baramulti Group, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bhatia International Limited - India
- India Bulls Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhushan Steel Limited - India
- Leighton Contractors Pty Ltd - Australia
- Carbofer General Trading SA - India
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Price Waterhouse Coopers - Russia
- The University of Queensland
- Interocean Group of Companies - India
- Kumho Petrochemical, South Korea
- Jorong Barutama Greston.PT - Indonesia
- SMG Consultants - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- Kepco SPC Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Siam City Cement - Thailand
- Central Java Power - Indonesia
- Grasim Industreis Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Africa Commodities Group - South Africa
- Renaissance Capital - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- Port Waratah Coal Services - Australia
- Vedanta Resources Plc - India
- Sindya Power Generating Company Private Ltd
- Minerals Council of Australia
- Semirara Mining and Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Samtan Co., Ltd - South Korea
- Ministry of Mines - Canada
- Energy Link Ltd, New Zealand
- Agrawal Coal Company - India
- The Treasury - Australian Government
- Power Finance Corporation Ltd., India
- PowerSource Philippines DevCo
- Globalindo Alam Lestari - Indonesia
- White Energy Company Limited
- Eastern Coal Council - USA
- Formosa Plastics Group - Taiwan
- Borneo Indobara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Oldendorff Carriers - Singapore
- Cement Manufacturers Association - India
- PTC India Limited - India
- Kartika Selabumi Mining - Indonesia
- Independent Power Producers Association of India
- Gujarat Sidhee Cement - India
- Madhucon Powers Ltd - India
- International Coal Ventures Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Orica Mining Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Singapore Mercantile Exchange
- Kaltim Prima Coal - Indonesia
- Tata Chemicals Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Attock Cement Pakistan Limited
- Malabar Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- GAC Shipping (India) Pvt Ltd
- Altura Mining Limited, Indonesia
- Straits Asia Resources Limited - Singapore
- Mintek Dendrill Indonesia
- Energy Development Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- Barasentosa Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Indian Energy Exchange, India
- New Zealand Coal & Carbon
- Coalindo Energy - Indonesia
- Eastern Energy - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Mjunction Services Limited - India
- Global Coal Blending Company Limited - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Salva Resources Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Goldman Sachs - Singapore
- Meralco Power Generation, Philippines
- Petron Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Thiess Contractors Indonesia
- Romanian Commodities Exchange
- Bayan Resources Tbk. - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Kobexindo Tractors - Indoneisa
- Tamil Nadu electricity Board
- Australian Commodity Traders Exchange
- Wood Mackenzie - Singapore
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