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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, 02 February 15
INDONESIA'S ADARO ENERGY PRODUCED 56.21 MILLION TONNES OF COAL IN 2014; UP 8% Y-O-Y
COALspot.com: PT. Adaro Energy, Indonesia’s largest coal producer, has increased coal production by 8% to 56.21 million tonnes (Mt) from both ...
Monday, 02 February 15
API 8 CFR SOUTH CHINA COAL SWAP PICKS UP W-O-W
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery declined US$ 0.81 (-1.36%) per MT month over month and gained US$ 0.18&nb ...
Monday, 02 February 15
SOUTH KOREA'S KOMIPO INVITES BIDS FOR 280K MT OF SUB-BITUMINOUS COAL
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender to buy total 280,000 MT of Sub-bituminous coal coa ...
Sunday, 01 February 15
INDONESIA-TO-INDIA COAL FREIGHT RATES REMAIN WEAK NEXT WEEK
COALspot.com: The BDI continued its fall reached lowest levels since 1986 this week.
The BDI declined 15.55 pct to 608 points on Friday 30, Ja ...
Friday, 30 January 15
CONTANGO AND TANKERS - SKULD
KNOWLEDGE TO ELEVATE
Like an invitation to a dance, the word contango may have some people flustered, but for tanker owners this market phenome ...
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- Ministry of Finance - Indonesia
- Simpson Spence & Young - Indonesia
- Makarim & Taira - Indonesia
- Oldendorff Carriers - Singapore
- Billiton Holdings Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Iligan Light & Power Inc, Philippines
- Heidelberg Cement - Germany
- Independent Power Producers Association of India
- SMC Global Power, Philippines
- Banpu Public Company Limited - Thailand
- Australian Coal Association
- Pipit Mutiara Jaya. PT, Indonesia
- Kaltim Prima Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Miang Besar Coal Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- GMR Energy Limited - India
- Tata Chemicals Ltd - India
- International Coal Ventures Pvt Ltd - India
- Larsen & Toubro Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Mineral Development Corp Ltd - India
- Maheswari Brothers Coal Limited - India
- Eastern Energy - Thailand
- GAC Shipping (India) Pvt Ltd
- Attock Cement Pakistan Limited
- Aditya Birla Group - India
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- Dalmia Cement Bharat India
- Bhatia International Limited - India
- Uttam Galva Steels Limited - India
- Posco Energy - South Korea
- Bulk Trading Sa - Switzerland
- Barasentosa Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Central Electricity Authority - India
- Samtan Co., Ltd - South Korea
- CNBM International Corporation - China
- Marubeni Corporation - India
- Gujarat Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- The Treasury - Australian Government
- Indian Energy Exchange, India
- IHS Mccloskey Coal Group - USA
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Medco Energi Mining Internasional
- Vizag Seaport Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Indian Oil Corporation Limited
- Rio Tinto Coal - Australia
- ASAPP Information Group - India
- Sindya Power Generating Company Private Ltd
- Cigading International Bulk Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bharathi Cement Corporation - India
- Merrill Lynch Commodities Europe
- Wood Mackenzie - Singapore
- Alfred C Toepfer International GmbH - Germany
- Global Green Power PLC Corporation, Philippines
- Goldman Sachs - Singapore
- Indika Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Kumho Petrochemical, South Korea
- Straits Asia Resources Limited - Singapore
- Savvy Resources Ltd - HongKong
- Ministry of Mines - Canada
- Therma Luzon, Inc, Philippines
- Singapore Mercantile Exchange
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- Directorate Of Revenue Intelligence - India
- Kepco SPC Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- PNOC Exploration Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Commonwealth Bank - Australia
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Renaissance Capital - South Africa
- Madhucon Powers Ltd - India
- Altura Mining Limited, Indonesia
- Energy Link Ltd, New Zealand
- Thai Mozambique Logistica
- GN Power Mariveles Coal Plant, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Ambuja Cements Ltd - India
- Anglo American - United Kingdom
- White Energy Company Limited
- Chettinad Cement Corporation Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Wilmar Investment Holdings
- McConnell Dowell - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Port Waratah Coal Services - Australia
- Africa Commodities Group - South Africa
- PTC India Limited - India
- Leighton Contractors Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
- Formosa Plastics Group - Taiwan
- Interocean Group of Companies - India
- Deloitte Consulting - India
- Electricity Authority, New Zealand
- New Zealand Coal & Carbon
- Kobexindo Tractors - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Carbofer General Trading SA - India
- LBH Netherlands Bv - Netherlands
- Borneo Indobara - Indonesia
- Xindia Steels Limited - India
- Coalindo Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Romanian Commodities Exchange
- Intertek Mineral Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Antam Resourcindo - Indonesia
- ICICI Bank Limited - India
- Coastal Gujarat Power Limited - India
- Grasim Industreis Ltd - India
- Coal and Oil Company - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meralco Power Generation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Chamber of Mines of South Africa
- Thiess Contractors Indonesia
- The State Trading Corporation of India Ltd
- Sical Logistics Limited - India
- Cement Manufacturers Association - India
- Toyota Tsusho Corporation, Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bangladesh Power Developement Board
- Aboitiz Power Corporation - Philippines
- Mintek Dendrill Indonesia
- Jindal Steel & Power Ltd - India
- Ind-Barath Power Infra Limited - India
- Sojitz Corporation - Japan
- Karaikal Port Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- Neyveli Lignite Corporation Ltd, - India
- Orica Australia Pty. Ltd.
- Edison Trading Spa - Italy
- Planning Commission, India
- Orica Mining Services - Indonesia
- India Bulls Power Limited - India
- Metalloyd Limited - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Georgia Ports Authority, United States
- SN Aboitiz Power Inc, Philippines
- Siam City Cement - Thailand
- Sarangani Energy Corporation, Philippines
- Gujarat Sidhee Cement - India
- Malabar Cements Ltd - India
- San Jose City I Power Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
- Siam City Cement PLC, Thailand
- Bukit Baiduri Energy - Indonesia
- Mercuria Energy - Indonesia
- Petron Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Tamil Nadu electricity Board
- Indo Tambangraya Megah - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Videocon Industries ltd - India
- Parliament of New Zealand
- Binh Thuan Hamico - Vietnam
- GVK Power & Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Trasteel International SA, Italy
- Electricity Generating Authority of Thailand
- Star Paper Mills Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Baramulti Group, Indonesia
- Global Business Power Corporation, Philippines
- MS Steel International - UAE
- TeaM Sual Corporation - Philippines
- Semirara Mining Corp, Philippines
- Vedanta Resources Plc - India
- Power Finance Corporation Ltd., India
- PowerSource Philippines DevCo
- Minerals Council of Australia
- Jaiprakash Power Ventures ltd
- Petrochimia International Co. Ltd.- Taiwan
- Mercator Lines Limited - India
- Riau Bara Harum - Indonesia
- Parry Sugars Refinery, India
- Semirara Mining and Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Sakthi Sugars Limited - India
- European Bulk Services B.V. - Netherlands
- CIMB Investment Bank - Malaysia
- Mjunction Services Limited - India
- Central Java Power - Indonesia
- Salva Resources Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Indogreen Group - Indonesia
- Energy Development Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- London Commodity Brokers - England
- Australian Commodity Traders Exchange
- The University of Queensland
- Holcim Trading Pte Ltd - Singapore
- Bhoruka Overseas - Indonesia
- Standard Chartered Bank - UAE
- Eastern Coal Council - USA
- Lanco Infratech Ltd - India
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