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