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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, 20 July 15
CFR SOUTH CHINA COAL SWAPS GAIN WEEK OVER WEEK
COALspot.com: API 8 CFR South China Coal swap for Q3’ 2015 delivery declined US$ 1.18 (2.27%) per MT month over month.
A commodity swap ...
Sunday, 19 July 15
BDI GAINED AND CROSSED 1000 MARK THIS WEEK
COALspot.com: The BDI gained and crossed 1000 mark after many months this Friday. The BDI was up almost 20 pct and closed 1048 points on 17 July 20 ...
Saturday, 18 July 15
INTERVIEW : FRANZ ESCALANTE, CHIEF OF INFORMATION SYSTEMS, MINERA CHINALCO, PERU
We are interested in the technology of Autonomous trucks, the new-generation trucks are not remote controlled, they are truly autonomous - Franz Es ...
Friday, 17 July 15
COAL PRODUCTION IN THE U.S. INCREASES SHARPLY FOR THE WEEK ENDING JULY 11
COALspot.com – United States the second largest coal producer in the world has produced approximately totaled an estimated 16.4 million short ...
Friday, 17 July 15
INDONESIAN POWER-STATION COAL SWAPS DECLINE CONTINUES THIS PAST WEEK
COALspot.com: Indonesian coal swap for delivery Q3 2015 declined month on month and week over week, this past week.
The Q3 swap was declined $ ...
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- Pendopo Energi Batubara - Indonesia
- Ind-Barath Power Infra Limited - India
- Central Electricity Authority - India
- Bharathi Cement Corporation - India
- Bhatia International Limited - India
- The State Trading Corporation of India Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Essar Steel Hazira Ltd - India
- Directorate Of Revenue Intelligence - India
- Heidelberg Cement - Germany
- Electricity Authority, New Zealand
- Bhoruka Overseas - Indonesia
- Africa Commodities Group - South Africa
- GVK Power & Infra Limited - India
- Altura Mining Limited, Indonesia
- Samtan Co., Ltd - South Korea
- Ministry of Mines - Canada
- Planning Commission, India
- Meralco Power Generation, Philippines
- Intertek Mineral Services - Indonesia
- Medco Energi Mining Internasional
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Riau Bara Harum - Indonesia
- TeaM Sual Corporation - Philippines
- Renaissance Capital - South Africa
- Cement Manufacturers Association - India
- Kepco SPC Power Corporation, Philippines
- Mjunction Services Limited - India
- Orica Australia Pty. Ltd.
- Carbofer General Trading SA - India
- Mintek Dendrill Indonesia
- Minerals Council of Australia
- Rio Tinto Coal - Australia
- Bhushan Steel Limited - India
- South Luzon Thermal Energy Corporation
- Romanian Commodities Exchange
- London Commodity Brokers - England
- Larsen & Toubro Limited - India
- Binh Thuan Hamico - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- Kaltim Prima Coal - Indonesia
- Kumho Petrochemical, South Korea
- GAC Shipping (India) Pvt Ltd
- CIMB Investment Bank - Malaysia
- Ministry of Transport, Egypt
- IEA Clean Coal Centre - UK
- Therma Luzon, Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- India Bulls Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- McConnell Dowell - Australia
- Coalindo Energy - Indonesia
- MS Steel International - UAE
- Iligan Light & Power Inc, Philippines
- Australian Commodity Traders Exchange
- Indonesian Coal Mining Association
- Global Green Power PLC Corporation, Philippines
- Singapore Mercantile Exchange
- Sree Jayajothi Cements Limited - India
- Antam Resourcindo - Indonesia
- Global Business Power Corporation, Philippines
- Xindia Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Anglo American - United Kingdom
- Savvy Resources Ltd - HongKong
- Vedanta Resources Plc - India
- Goldman Sachs - Singapore
- Edison Trading Spa - Italy
- Ceylon Electricity Board - Sri Lanka
- Uttam Galva Steels Limited - India
- ICICI Bank Limited - India
- AsiaOL BioFuels Corp., Philippines
- Kobexindo Tractors - Indoneisa
- Energy Development Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- Indo Tambangraya Megah - Indonesia
- GMR Energy Limited - India
- Eastern Energy - Thailand
- Salva Resources Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- Thai Mozambique Logistica
- The University of Queensland
- PNOC Exploration Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Georgia Ports Authority, United States
- Tata Chemicals Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- Bangladesh Power Developement Board
- Star Paper Mills Limited - India
- Formosa Plastics Group - Taiwan
- Simpson Spence & Young - Indonesia
- Price Waterhouse Coopers - Russia
- Indogreen Group - Indonesia
- Parry Sugars Refinery, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercuria Energy - Indonesia
- Merrill Lynch Commodities Europe
- TNB Fuel Sdn Bhd - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Aditya Birla Group - India
- Sinarmas Energy and Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- PTC India Limited - India
- Sojitz Corporation - Japan
- Videocon Industries ltd - India
- Eastern Coal Council - USA
- Leighton Contractors Pty Ltd - Australia
- Independent Power Producers Association of India
- Krishnapatnam Port Company Ltd. - India
- Dalmia Cement Bharat India
- Billiton Holdings Pty Ltd - Australia
- Latin American Coal - Colombia
- Manunggal Multi Energi - Indonesia
- PowerSource Philippines DevCo
- Chettinad Cement Corporation Ltd - India
- The Treasury - Australian Government
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- Barasentosa Lestari - Indonesia
- Standard Chartered Bank - UAE
- Malabar Cements Ltd - India
- Power Finance Corporation Ltd., India
- Kapuas Tunggal Persada - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Alfred C Toepfer International GmbH - Germany
- Bukit Baiduri Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Toyota Tsusho Corporation, Japan
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Kartika Selabumi Mining - Indonesia
- Sarangani Energy Corporation, Philippines
- VISA Power Limited - India
- Tamil Nadu electricity Board
- Parliament of New Zealand
- Gujarat Sidhee Cement - India
- Metalloyd Limited - United Kingdom
- Electricity Generating Authority of Thailand
- Coastal Gujarat Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Kideco Jaya Agung - Indonesia
- Posco Energy - South Korea
- Directorate General of MIneral and Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- CNBM International Corporation - China
- Orica Mining Services - Indonesia
- Jaiprakash Power Ventures ltd
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Oldendorff Carriers - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Wood Mackenzie - Singapore
- Sical Logistics Limited - India
- Energy Link Ltd, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Vizag Seaport Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement - Thailand
- Indika Energy - Indonesia
- Indian Energy Exchange, India
- Attock Cement Pakistan Limited
- Holcim Trading Pte Ltd - Singapore
- Agrawal Coal Company - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- LBH Netherlands Bv - Netherlands
- New Zealand Coal & Carbon
- Ministry of Finance - Indonesia
- Sindya Power Generating Company Private Ltd
- Commonwealth Bank - Australia
- Petron Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- White Energy Company Limited
- Interocean Group of Companies - India
- Thiess Contractors Indonesia
- Madhucon Powers Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Ambuja Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Borneo Indobara - Indonesia
- Jindal Steel & Power Ltd - India
- International Coal Ventures Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Makarim & Taira - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Port Waratah Coal Services - Australia
- Deloitte Consulting - India
- Indian Oil Corporation Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- Coal and Oil Company - UAE
- Chamber of Mines of South Africa
- Trasteel International SA, Italy
- Rashtriya Ispat Nigam Limited - India
- SMC Global Power, Philippines
- Maheswari Brothers Coal Limited - India
- SMG Consultants - Indonesia
- Wilmar Investment Holdings
- Marubeni Corporation - India
- Baramulti Group, Indonesia
- European Bulk Services B.V. - Netherlands
- Bulk Trading Sa - Switzerland
- Economic Council, Georgia
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