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