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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, 17 November 14
SKULD ISSUES URGENT NOTICE ON BANKRUPTCY OF OW BUNKER A/S
Further to the Association’s advices of 7 November 2014, more information has come to light with respect to the potential impact and scale of ...
Monday, 17 November 14
INDONESIAN COAL PRICE REFERENCE CONTINUES FREE FALL; SLUMPS TO 69-MONTH LOW
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down the coal bench mark price once again in November. HBA for t ...
Monday, 17 November 14
API 5 FOB NEWCASTLE COAL SWAP FOR Q1' 15 DELIVERY CLOSED AT $ 52.75
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery has decreased US$ 1.77 (-3.25%) month over month and US$ 0.02 (-0.04%) day ...
Monday, 17 November 14
SOUTH CHINA COAL SWAP SLIGHTLY INCREASED WEEK OVER WEEK
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery has decreased US$ 1.73 (-2.67%) month over month and US$ 0.10 (-0.16%) da ...
Sunday, 16 November 14
THE BDI LOST 12.59% WEEK ON WEEK; THE BCI LOST 19.95%
COALspot.com: The BDI fell 12.59 percent to 1256 point week on week on Friday 14 November. All the segments were also most down this week. The cape ...
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- Ministry of Transport, Egypt
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- VISA Power Limited - India
- ICICI Bank Limited - India
- Sakthi Sugars Limited - India
- Wilmar Investment Holdings
- Siam City Cement PLC, Thailand
- Indian Energy Exchange, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Posco Energy - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Banpu Public Company Limited - Thailand
- Siam City Cement - Thailand
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Aboitiz Power Corporation - Philippines
- Power Finance Corporation Ltd., India
- Ambuja Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Directorate General of MIneral and Coal - Indonesia
- SMG Consultants - Indonesia
- Manunggal Multi Energi - Indonesia
- Global Business Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Interocean Group of Companies - India
- Asmin Koalindo Tuhup - Indonesia
- Price Waterhouse Coopers - Russia
- Pendopo Energi Batubara - Indonesia
- Sarangani Energy Corporation, Philippines
- Tata Chemicals Ltd - India
- Grasim Industreis Ltd - India
- Star Paper Mills Limited - India
- Attock Cement Pakistan Limited
- International Coal Ventures Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- SN Aboitiz Power Inc, Philippines
- Anglo American - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- Kaltim Prima Coal - Indonesia
- Bhatia International Limited - India
- Alfred C Toepfer International GmbH - Germany
- Lanco Infratech Ltd - India
- Madhucon Powers Ltd - India
- Ministry of Finance - Indonesia
- Maheswari Brothers Coal Limited - India
- Mintek Dendrill Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Aditya Birla Group - India
- Semirara Mining Corp, Philippines
- Romanian Commodities Exchange
- Latin American Coal - Colombia
- Thai Mozambique Logistica
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Planning Commission, India
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- Petron Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Central Java Power - Indonesia
- Gujarat Electricity Regulatory Commission - India
- The University of Queensland
- Sical Logistics Limited - India
- San Jose City I Power Corp, Philippines
- Savvy Resources Ltd - HongKong
- Essar Steel Hazira Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- AsiaOL BioFuels Corp., Philippines
- Gujarat Sidhee Cement - India
- Uttam Galva Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Oldendorff Carriers - Singapore
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- Dalmia Cement Bharat India
- Rio Tinto Coal - Australia
- PTC India Limited - India
- India Bulls Power Limited - India
- GMR Energy Limited - India
- Singapore Mercantile Exchange
- Renaissance Capital - South Africa
- Sojitz Corporation - Japan
- Videocon Industries ltd - India
- Simpson Spence & Young - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Mercuria Energy - Indonesia
- Salva Resources Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Bhushan Steel Limited - India
- Borneo Indobara - Indonesia
- Bharathi Cement Corporation - India
- Jaiprakash Power Ventures ltd
- Karaikal Port Pvt Ltd - India
- SMC Global Power, Philippines
- Trasteel International SA, Italy
- Pipit Mutiara Jaya. PT, Indonesia
- New Zealand Coal & Carbon
- Deloitte Consulting - India
- GVK Power & Infra Limited - India
- Australian Commodity Traders Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Medco Energi Mining Internasional
- TeaM Sual Corporation - Philippines
- Riau Bara Harum - Indonesia
- Energy Development Corp, Philippines
- Formosa Plastics Group - Taiwan
- Ind-Barath Power Infra Limited - India
- Energy Link Ltd, New Zealand
- Coal and Oil Company - UAE
- Georgia Ports Authority, United States
- Commonwealth Bank - Australia
- Billiton Holdings Pty Ltd - Australia
- Eastern Energy - Thailand
- Larsen & Toubro Limited - India
- Baramulti Group, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- South Luzon Thermal Energy Corporation
- Samtan Co., Ltd - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Economic Council, Georgia
- Antam Resourcindo - Indonesia
- Global Coal Blending Company Limited - Australia
- Leighton Contractors Pty Ltd - Australia
- Mjunction Services Limited - India
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- ASAPP Information Group - India
- PNOC Exploration Corporation - Philippines
- Australian Coal Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Mining Services - Indonesia
- Bangladesh Power Developement Board
- European Bulk Services B.V. - Netherlands
- MS Steel International - UAE
- CIMB Investment Bank - Malaysia
- Electricity Authority, New Zealand
- Standard Chartered Bank - UAE
- Barasentosa Lestari - Indonesia
- Indika Energy - Indonesia
- Xindia Steels Limited - India
- Vedanta Resources Plc - India
- Indonesian Coal Mining Association
- Kumho Petrochemical, South Korea
- Directorate Of Revenue Intelligence - India
- Neyveli Lignite Corporation Ltd, - India
- Bukit Asam (Persero) Tbk - Indonesia
- The Treasury - Australian Government
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- Africa Commodities Group - South Africa
- PowerSource Philippines DevCo
- Parry Sugars Refinery, India
- Malabar Cements Ltd - India
- Indian Oil Corporation Limited
- Coalindo Energy - Indonesia
- Independent Power Producers Association of India
- Indo Tambangraya Megah - Indonesia
- Kobexindo Tractors - Indoneisa
- Vizag Seaport Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Therma Luzon, Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- Chamber of Mines of South Africa
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- Altura Mining Limited, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- White Energy Company Limited
- Merrill Lynch Commodities Europe
- Coastal Gujarat Power Limited - India
- Indogreen Group - Indonesia
- Port Waratah Coal Services - Australia
- Electricity Generating Authority of Thailand
- Bhoruka Overseas - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Binh Thuan Hamico - Vietnam
- Global Green Power PLC Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Mines - Canada
- Agrawal Coal Company - India
- Kohat Cement Company Ltd. - Pakistan
- Jindal Steel & Power Ltd - India
- Parliament of New Zealand
- Minerals Council of Australia
- Cement Manufacturers Association - India
- Rashtriya Ispat Nigam Limited - India
- Makarim & Taira - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Straits Asia Resources Limited - Singapore
- Chettinad Cement Corporation Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Thiess Contractors Indonesia
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- London Commodity Brokers - England
- Tamil Nadu electricity Board
- Intertek Mineral Services - Indonesia
- Edison Trading Spa - Italy
- Eastern Coal Council - USA
- Goldman Sachs - Singapore
- Toyota Tsusho Corporation, Japan
- Bulk Trading Sa - Switzerland
- Gujarat Mineral Development Corp Ltd - India
- Central Electricity Authority - India
- Marubeni Corporation - India
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