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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, 26 May 15
MINING ASSOCIATION PERHAPI PUSHES FOR 35,000 MEGAWATT ELECTRICITY PROGRAM - JG
The Indonesian Mining Professionals Association, or Perhapi, has announced its support for a 35,000-megawatt national electricity program, saying i ...
Tuesday, 26 May 15
FOB INDONESIA COAL SWAP; UP WEEK OVER WEEK
COALspot.com: Indonesian coal swap for delivery Q3 2015 gains week over week and lost month on month, this past week.
The Q3 swap was declined ...
Monday, 25 May 15
FOB NEWCASTLE COAL SWAP Q1'16 CLOSED LOWER THAN Q3'15 CLOSING
COALspot.com: API 5 FOB Newcastle Coal swap for Q3’ 2015 delivery gained US$ 0.92 per MT (2.07%) month over month and US$ 0.70 week on week. ...
Monday, 25 May 15
CFR SOUTH CHINA COAL SWAP : Q3, Q4'15 & Q1'16 INCREASED M-O-M AND W-O-W
COALspot.com: API 8 CFR South China Coal swap for Q3’ 2015 delivery up US$ 1.55 (3.09%) per MT month over month and US$ 0.72 (1.41%) pe ...
Sunday, 24 May 15
INDONESIA TO INDIA PANAMAX CHARTER RATES WERE RATING AT AROUND US$ 5500
COALspot.com: The freight market softened in all segments this past week.
The BDI was dropped 7.57 percent week over week and closed at 586 po ...
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- Binh Thuan Hamico - Vietnam
- Madhucon Powers Ltd - India
- TeaM Sual Corporation - Philippines
- Economic Council, Georgia
- Jaiprakash Power Ventures ltd
- Chettinad Cement Corporation Ltd - India
- Carbofer General Trading SA - India
- Altura Mining Limited, Indonesia
- Semirara Mining Corp, Philippines
- Price Waterhouse Coopers - Russia
- Kapuas Tunggal Persada - Indonesia
- Australian Commodity Traders Exchange
- GMR Energy Limited - India
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- Siam City Cement PLC, Thailand
- Energy Development Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Indogreen Group - Indonesia
- Globalindo Alam Lestari - Indonesia
- Barasentosa Lestari - Indonesia
- Coalindo Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Wood Mackenzie - Singapore
- Cigading International Bulk Terminal - Indonesia
- Thiess Contractors Indonesia
- SN Aboitiz Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
- London Commodity Brokers - England
- Minerals Council of Australia
- Parry Sugars Refinery, India
- Billiton Holdings Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- SMG Consultants - Indonesia
- Chamber of Mines of South Africa
- Africa Commodities Group - South Africa
- Borneo Indobara - Indonesia
- Sical Logistics Limited - India
- Bhushan Steel Limited - India
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
- Ministry of Finance - Indonesia
- Orica Australia Pty. Ltd.
- Ambuja Cements Ltd - India
- Electricity Authority, New Zealand
- Vedanta Resources Plc - India
- Energy Link Ltd, New Zealand
- Independent Power Producers Association of India
- Metalloyd Limited - United Kingdom
- Tata Chemicals Ltd - India
- Wilmar Investment Holdings
- Georgia Ports Authority, United States
- Pendopo Energi Batubara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coastal Gujarat Power Limited - India
- Antam Resourcindo - Indonesia
- San Jose City I Power Corp, Philippines
- Central Electricity Authority - India
- White Energy Company Limited
- Romanian Commodities Exchange
- Indo Tambangraya Megah - Indonesia
- Bhatia International Limited - India
- OPG Power Generation Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- ICICI Bank Limited - India
- Indonesian Coal Mining Association
- Directorate General of MIneral and Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Dalmia Cement Bharat India
- Trasteel International SA, Italy
- Simpson Spence & Young - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Parliament of New Zealand
- GAC Shipping (India) Pvt Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kumho Petrochemical, South Korea
- Eastern Coal Council - USA
- Commonwealth Bank - Australia
- IEA Clean Coal Centre - UK
- Kartika Selabumi Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Mintek Dendrill Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mercator Lines Limited - India
- VISA Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Marubeni Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Transport, Egypt
- Meenaskhi Energy Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Oldendorff Carriers - Singapore
- Kaltim Prima Coal - Indonesia
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- Bangladesh Power Developement Board
- Planning Commission, India
- Baramulti Group, Indonesia
- Makarim & Taira - Indonesia
- ASAPP Information Group - India
- Gujarat Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Salva Resources Pvt Ltd - India
- Posco Energy - South Korea
- Formosa Plastics Group - Taiwan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Vijayanagar Sugar Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Maheswari Brothers Coal Limited - India
- Sree Jayajothi Cements Limited - India
- Agrawal Coal Company - India
- Maharashtra Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- PowerSource Philippines DevCo
- Global Business Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Petron Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- McConnell Dowell - Australia
- Xindia Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Mercuria Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Electricity Generating Authority of Thailand
- LBH Netherlands Bv - Netherlands
- Tamil Nadu electricity Board
- Star Paper Mills Limited - India
- Intertek Mineral Services - Indonesia
- Eastern Energy - Thailand
- Ind-Barath Power Infra Limited - India
- Straits Asia Resources Limited - Singapore
- Central Java Power - Indonesia
- MS Steel International - UAE
- Vizag Seaport Private Limited - India
- Singapore Mercantile Exchange
- Asmin Koalindo Tuhup - Indonesia
- Anglo American - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Coal and Oil Company - UAE
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Uttam Galva Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Lanco Infratech Ltd - India
- PNOC Exploration Corporation - Philippines
- Jindal Steel & Power Ltd - India
- SMC Global Power, Philippines
- Global Green Power PLC Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- New Zealand Coal & Carbon
- Savvy Resources Ltd - HongKong
- Larsen & Toubro Limited - India
- Gujarat Sidhee Cement - India
- Sakthi Sugars Limited - India
- The University of Queensland
- Australian Coal Association
- Grasim Industreis Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Videocon Industries ltd - India
- India Bulls Power Limited - India
- IHS Mccloskey Coal Group - USA
- Bhoruka Overseas - Indonesia
- Essar Steel Hazira Ltd - India
- Attock Cement Pakistan Limited
- Medco Energi Mining Internasional
- The State Trading Corporation of India Ltd
- Merrill Lynch Commodities Europe
- Global Coal Blending Company Limited - Australia
- Standard Chartered Bank - UAE
- Bulk Trading Sa - Switzerland
- Indian Energy Exchange, India
- Indika Energy - Indonesia
- Mjunction Services Limited - India
- Kideco Jaya Agung - Indonesia
- PTC India Limited - India
- Sojitz Corporation - Japan
- Aboitiz Power Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Malabar Cements Ltd - India
- Riau Bara Harum - Indonesia
- Meralco Power Generation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Banpu Public Company Limited - Thailand
- Heidelberg Cement - Germany
- Toyota Tsusho Corporation, Japan
- Neyveli Lignite Corporation Ltd, - India
- Bharathi Cement Corporation - India
- GVK Power & Infra Limited - India
- Interocean Group of Companies - India
- Karaikal Port Pvt Ltd - India
- Latin American Coal - Colombia
- Rashtriya Ispat Nigam Limited - India
- Sarangani Energy Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- The Treasury - Australian Government
- Ceylon Electricity Board - Sri Lanka
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Oil Corporation Limited
- Rio Tinto Coal - Australia
- European Bulk Services B.V. - Netherlands
- Orica Mining Services - Indonesia
- Deloitte Consulting - India
- Ministry of Mines - Canada
- Thai Mozambique Logistica
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