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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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- Karaikal Port Pvt Ltd - India
- Thai Mozambique Logistica
- Attock Cement Pakistan Limited
- The State Trading Corporation of India Ltd
- Miang Besar Coal Terminal - Indonesia
- SMC Global Power, Philippines
- Heidelberg Cement - Germany
- Bayan Resources Tbk. - Indonesia
- Aditya Birla Group - India
- Gujarat Sidhee Cement - India
- Banpu Public Company Limited - Thailand
- Oldendorff Carriers - Singapore
- Indogreen Group - Indonesia
- Sical Logistics Limited - India
- IHS Mccloskey Coal Group - USA
- ICICI Bank Limited - India
- Georgia Ports Authority, United States
- Karbindo Abesyapradhi - Indoneisa
- Xindia Steels Limited - India
- Mjunction Services Limited - India
- Kideco Jaya Agung - Indonesia
- Bharathi Cement Corporation - India
- Lanco Infratech Ltd - India
- SN Aboitiz Power Inc, Philippines
- Trasteel International SA, Italy
- Manunggal Multi Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Ministry of Finance - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Latin American Coal - Colombia
- London Commodity Brokers - England
- Samtan Co., Ltd - South Korea
- Globalindo Alam Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Jaiprakash Power Ventures ltd
- Savvy Resources Ltd - HongKong
- Bhoruka Overseas - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Merrill Lynch Commodities Europe
- Directorate General of MIneral and Coal - Indonesia
- Parry Sugars Refinery, India
- Maheswari Brothers Coal Limited - India
- Electricity Authority, New Zealand
- Renaissance Capital - South Africa
- Petron Corporation, Philippines
- Mercator Lines Limited - India
- The Treasury - Australian Government
- Essar Steel Hazira Ltd - India
- Baramulti Group, Indonesia
- Price Waterhouse Coopers - Russia
- Kobexindo Tractors - Indoneisa
- Central Java Power - Indonesia
- White Energy Company Limited
- MS Steel International - UAE
- TeaM Sual Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Bangladesh Power Developement Board
- European Bulk Services B.V. - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement - Thailand
- Parliament of New Zealand
- Semirara Mining and Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Kartika Selabumi Mining - Indonesia
- Formosa Plastics Group - Taiwan
- San Jose City I Power Corp, Philippines
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Posco Energy - South Korea
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- Thiess Contractors Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Mineral Development Corp Ltd - India
- International Coal Ventures Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Star Paper Mills Limited - India
- Sakthi Sugars Limited - India
- Indian Oil Corporation Limited
- Medco Energi Mining Internasional
- Cement Manufacturers Association - India
- India Bulls Power Limited - India
- Therma Luzon, Inc, Philippines
- Anglo American - United Kingdom
- Vizag Seaport Private Limited - India
- Bulk Trading Sa - Switzerland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- PowerSource Philippines DevCo
- Madhucon Powers Ltd - India
- CNBM International Corporation - China
- Straits Asia Resources Limited - Singapore
- Simpson Spence & Young - Indonesia
- Meenaskhi Energy Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Independent Power Producers Association of India
- PNOC Exploration Corporation - Philippines
- Tata Chemicals Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Energy Development Corp, Philippines
- Bhushan Steel Limited - India
- PTC India Limited - India
- Coastal Gujarat Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Malabar Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- Commonwealth Bank - Australia
- Kepco SPC Power Corporation, Philippines
- Bhatia International Limited - India
- Riau Bara Harum - Indonesia
- Ambuja Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Indika Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- Kaltim Prima Coal - Indonesia
- Sojitz Corporation - Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Ministry of Mines - Canada
- Toyota Tsusho Corporation, Japan
- Singapore Mercantile Exchange
- Energy Link Ltd, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Mintek Dendrill Indonesia
- Chamber of Mines of South Africa
- Indian Energy Exchange, India
- Central Electricity Authority - India
- Makarim & Taira - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Timah Investasi Mineral - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- VISA Power Limited - India
- Vedanta Resources Plc - India
- GN Power Mariveles Coal Plant, Philippines
- Jindal Steel & Power Ltd - India
- Goldman Sachs - Singapore
- Wood Mackenzie - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Marubeni Corporation - India
- GMR Energy Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Economic Council, Georgia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Energy - Thailand
- Krishnapatnam Port Company Ltd. - India
- Bahari Cakrawala Sebuku - Indonesia
- Uttam Galva Steels Limited - India
- GVK Power & Infra Limited - India
- Standard Chartered Bank - UAE
- Coalindo Energy - Indonesia
- ASAPP Information Group - India
- Dalmia Cement Bharat India
- Meralco Power Generation, Philippines
- Australian Coal Association
- Agrawal Coal Company - India
- Orica Australia Pty. Ltd.
- Semirara Mining Corp, Philippines
- CIMB Investment Bank - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Tamil Nadu electricity Board
- Rio Tinto Coal - Australia
- Edison Trading Spa - Italy
- Indonesian Coal Mining Association
- Global Coal Blending Company Limited - Australia
- Altura Mining Limited, Indonesia
- Ministry of Transport, Egypt
- Minerals Council of Australia
- Grasim Industreis Ltd - India
- Directorate Of Revenue Intelligence - India
- Sarangani Energy Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Interocean Group of Companies - India
- Videocon Industries ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sinarmas Energy and Mining - Indonesia
- Larsen & Toubro Limited - India
- Planning Commission, India
- The University of Queensland
- Coal and Oil Company - UAE
- Aboitiz Power Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Deloitte Consulting - India
- Pendopo Energi Batubara - Indonesia
- SMG Consultants - Indonesia
- Carbofer General Trading SA - India
- Mercuria Energy - Indonesia
- Australian Commodity Traders Exchange
- IEA Clean Coal Centre - UK
- Wilmar Investment Holdings
- Eastern Coal Council - USA
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Rashtriya Ispat Nigam Limited - India
- New Zealand Coal & Carbon
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
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