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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, 20 January 15
INDIA TO SURPASS THE UNITED STATES AND BECOME THE SECOND-LARGEST COAL CONSUMER IN THE WORLD BY 2019 - IMF
COALspot.com: In 2013, coal added more primary energy than any other fuel and was the fastest-growing fossil fuel, enhancing its position as the se ...
Tuesday, 20 January 15
INDONESIAN COAL OUTPUT SEEN RISING, DESPITE FALL IN ITS PRICE
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 declined month on month and week over week, but Indonesian Coal Output Seen Rising. T ...
Tuesday, 20 January 15
NEWCASTLE COAL SWAP FOR Q1' 2015 DELIVERY DECLINED 2.83% M-O-M
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery declined US$ 1.45 per MT (-2.83%) month over month and US$ 0.50 (-0.99%) we ...
Monday, 19 January 15
HBA FALL TO FRESH LOWS; COAL OVERSUPPLY WILL CONTINUE TO PUSH PRICE DOWN
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down Indonesian coal bench mark price this month to US$ 63.84. T ...
Monday, 19 January 15
CFR SOUTH CHINA COAL SWAPS REMAIN WEAK
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery declined US$ 3.37 (-5.63%) per MT month over month and US$ 0.74 (-1.29%) ...
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- Thiess Contractors Indonesia
- Bhushan Steel Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Jindal Steel & Power Ltd - India
- Global Business Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Makarim & Taira - Indonesia
- Sindya Power Generating Company Private Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Generating Authority of Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Commodity Traders Exchange
- Pendopo Energi Batubara - Indonesia
- Electricity Authority, New Zealand
- Anglo American - United Kingdom
- South Luzon Thermal Energy Corporation
- SMC Global Power, Philippines
- Sical Logistics Limited - India
- Bangladesh Power Developement Board
- Savvy Resources Ltd - HongKong
- Karaikal Port Pvt Ltd - India
- Lanco Infratech Ltd - India
- Barasentosa Lestari - Indonesia
- Attock Cement Pakistan Limited
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Indian Energy Exchange, India
- LBH Netherlands Bv - Netherlands
- Eastern Coal Council - USA
- GAC Shipping (India) Pvt Ltd
- Alfred C Toepfer International GmbH - Germany
- Grasim Industreis Ltd - India
- Bukit Makmur.PT - Indonesia
- Trasteel International SA, Italy
- Asmin Koalindo Tuhup - Indonesia
- Carbofer General Trading SA - India
- Sojitz Corporation - Japan
- Medco Energi Mining Internasional
- Bulk Trading Sa - Switzerland
- Formosa Plastics Group - Taiwan
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- Krishnapatnam Port Company Ltd. - India
- Timah Investasi Mineral - Indoneisa
- Maheswari Brothers Coal Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement - Thailand
- Baramulti Group, Indonesia
- Agrawal Coal Company - India
- Salva Resources Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Marubeni Corporation - India
- Price Waterhouse Coopers - Russia
- Meenaskhi Energy Private Limited - India
- Rio Tinto Coal - Australia
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- Holcim Trading Pte Ltd - Singapore
- Indo Tambangraya Megah - Indonesia
- Larsen & Toubro Limited - India
- VISA Power Limited - India
- Kumho Petrochemical, South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Minerals Council of Australia
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Ambuja Cements Ltd - India
- Commonwealth Bank - Australia
- Kobexindo Tractors - Indoneisa
- Siam City Cement PLC, Thailand
- Indonesian Coal Mining Association
- Pipit Mutiara Jaya. PT, Indonesia
- Thai Mozambique Logistica
- Bukit Asam (Persero) Tbk - Indonesia
- Mintek Dendrill Indonesia
- Parry Sugars Refinery, India
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- IHS Mccloskey Coal Group - USA
- PTC India Limited - India
- Merrill Lynch Commodities Europe
- Tata Chemicals Ltd - India
- London Commodity Brokers - England
- Sree Jayajothi Cements Limited - India
- Borneo Indobara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Xindia Steels Limited - India
- Romanian Commodities Exchange
- PowerSource Philippines DevCo
- Wood Mackenzie - Singapore
- Directorate Of Revenue Intelligence - India
- Gujarat Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Global Coal Blending Company Limited - Australia
- Orica Australia Pty. Ltd.
- Metalloyd Limited - United Kingdom
- Renaissance Capital - South Africa
- Ministry of Finance - Indonesia
- Ind-Barath Power Infra Limited - India
- Intertek Mineral Services - Indonesia
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMG Consultants - Indonesia
- Heidelberg Cement - Germany
- Goldman Sachs - Singapore
- Aditya Birla Group - India
- Vedanta Resources Plc - India
- Kideco Jaya Agung - Indonesia
- Semirara Mining Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Deloitte Consulting - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Malabar Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Coalindo Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- McConnell Dowell - Australia
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- GVK Power & Infra Limited - India
- The University of Queensland
- Jaiprakash Power Ventures ltd
- Straits Asia Resources Limited - Singapore
- Global Green Power PLC Corporation, Philippines
- Videocon Industries ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Semirara Mining and Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Mines - Canada
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- Altura Mining Limited, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Mercator Lines Limited - India
- Antam Resourcindo - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Georgia Ports Authority, United States
- Indian Oil Corporation Limited
- Mercuria Energy - Indonesia
- Independent Power Producers Association of India
- Samtan Co., Ltd - South Korea
- Mjunction Services Limited - India
- Coastal Gujarat Power Limited - India
- Cement Manufacturers Association - India
- Posco Energy - South Korea
- Aboitiz Power Corporation - Philippines
- GMR Energy Limited - India
- Sarangani Energy Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Australian Coal Association
- International Coal Ventures Pvt Ltd - India
- Bharathi Cement Corporation - India
- Simpson Spence & Young - Indonesia
- Billiton Holdings Pty Ltd - Australia
- White Energy Company Limited
- Leighton Contractors Pty Ltd - Australia
- Central Electricity Authority - India
- Vizag Seaport Private Limited - India
- MS Steel International - UAE
- Ministry of Transport, Egypt
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- Star Paper Mills Limited - India
- Globalindo Alam Lestari - Indonesia
- Indika Energy - Indonesia
- New Zealand Coal & Carbon
- Sakthi Sugars Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kalimantan Lumbung Energi - Indonesia
- CIMB Investment Bank - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Energy Link Ltd, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Petron Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Energy Development Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Kohat Cement Company Ltd. - Pakistan
- Latin American Coal - Colombia
- TeaM Sual Corporation - Philippines
- Parliament of New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Wilmar Investment Holdings
- Miang Besar Coal Terminal - Indonesia
- Singapore Mercantile Exchange
- The Treasury - Australian Government
- Madhucon Powers Ltd - India
- Riau Bara Harum - Indonesia
- Coal and Oil Company - UAE
- The State Trading Corporation of India Ltd
- Chamber of Mines of South Africa
- European Bulk Services B.V. - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Africa Commodities Group - South Africa
- Edison Trading Spa - Italy
- Kaltim Prima Coal - Indonesia
- Port Waratah Coal Services - Australia
- Essar Steel Hazira Ltd - India
- Dalmia Cement Bharat India
- Directorate General of MIneral and Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Interocean Group of Companies - India
- Planning Commission, India
- Uttam Galva Steels Limited - India
- Indogreen Group - Indonesia
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