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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, 29 September 14
INDONESIAN COAL EXPORT VOLUME FALL IN AUGUST
COALspot.com: Indonesia, one of the world's largest coal producers and the global leading multi grade coal exporter shipped around $1.50 ...
Monday, 29 September 14
INDONESIAN COAL SWAPS LOST WEEK ON WEEK AND MONTH OVER MONTH
COALspot.com: Indonesian coal swaps for average November 2014 flat day on day and lost US$ 0.85 (-1.66%) per mt week on week. The swap also lost US ...
Monday, 29 September 14
CFR SOUTH CHINA COAL LOST AROUND 5% MONTH ON MONTH
COALspot.com: API 8 CFR South China Coal swap for delivery in November 2014 decreased US$ 3.55 (-5.10%) month over month and flat week over week.
...
Sunday, 28 September 14
FREIGHT RATES FROM INDONESIA TO INDIA IS EXPECTED TO BE FIRM NEXT WEEK - CAPT. REDDY
COALspot.com: The freight market shows a bit weak trend this week.
The BDI was lost 2.42% week on week and closed at 1049 points on 26 Se ...
Sunday, 28 September 14
BERAU AGREES DEAL WITH GOVT, MINING AREA REDUCED - THE JAKARTA POST
Coal miner PT Berau Coal, a subsidiary of Jakarta-listed PT Berau Coal Energy (BRAU), has signed a memorandum of understanding (MoU) with the gover ...
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- Bukit Baiduri Energy - Indonesia
- ICICI Bank Limited - India
- Mjunction Services Limited - India
- Savvy Resources Ltd - HongKong
- Port Waratah Coal Services - Australia
- Jindal Steel & Power Ltd - India
- IHS Mccloskey Coal Group - USA
- Anglo American - United Kingdom
- Jaiprakash Power Ventures ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhatia International Limited - India
- Minerals Council of Australia
- Parliament of New Zealand
- Trasteel International SA, Italy
- Sojitz Corporation - Japan
- Eastern Energy - Thailand
- Energy Link Ltd, New Zealand
- The State Trading Corporation of India Ltd
- Bhoruka Overseas - Indonesia
- International Coal Ventures Pvt Ltd - India
- New Zealand Coal & Carbon
- Karaikal Port Pvt Ltd - India
- Mercator Lines Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kartika Selabumi Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- ASAPP Information Group - India
- Semirara Mining Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Goldman Sachs - Singapore
- Orica Australia Pty. Ltd.
- Australian Commodity Traders Exchange
- Romanian Commodities Exchange
- Renaissance Capital - South Africa
- Maharashtra Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Planning Commission, India
- Carbofer General Trading SA - India
- Cement Manufacturers Association - India
- Uttam Galva Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Xindia Steels Limited - India
- Economic Council, Georgia
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- Ceylon Electricity Board - Sri Lanka
- Heidelberg Cement - Germany
- The Treasury - Australian Government
- TeaM Sual Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Siam City Cement - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Generating Authority of Thailand
- Manunggal Multi Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Pendopo Energi Batubara - Indonesia
- Antam Resourcindo - Indonesia
- Medco Energi Mining Internasional
- IEA Clean Coal Centre - UK
- Sical Logistics Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Bhushan Steel Limited - India
- Kepco SPC Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- SMG Consultants - Indonesia
- Rio Tinto Coal - Australia
- Oldendorff Carriers - Singapore
- Alfred C Toepfer International GmbH - Germany
- Bukit Makmur.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bangladesh Power Developement Board
- White Energy Company Limited
- Thai Mozambique Logistica
- Australian Coal Association
- Bayan Resources Tbk. - Indonesia
- Riau Bara Harum - Indonesia
- Bharathi Cement Corporation - India
- Standard Chartered Bank - UAE
- Gujarat Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Ambuja Cements Ltd - India
- Central Electricity Authority - India
- Indonesian Coal Mining Association
- Timah Investasi Mineral - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- Coastal Gujarat Power Limited - India
- Straits Asia Resources Limited - Singapore
- PTC India Limited - India
- Salva Resources Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Leighton Contractors Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Videocon Industries ltd - India
- Binh Thuan Hamico - Vietnam
- VISA Power Limited - India
- Meralco Power Generation, Philippines
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- Petron Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- India Bulls Power Limited - India
- Independent Power Producers Association of India
- Africa Commodities Group - South Africa
- Therma Luzon, Inc, Philippines
- Attock Cement Pakistan Limited
- Larsen & Toubro Limited - India
- Ministry of Mines - Canada
- Ind-Barath Power Infra Limited - India
- CIMB Investment Bank - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Posco Energy - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Iligan Light & Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Coalindo Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- GMR Energy Limited - India
- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
- Gujarat Sidhee Cement - India
- Vedanta Resources Plc - India
- Coal and Oil Company - UAE
- MS Steel International - UAE
- Madhucon Powers Ltd - India
- Marubeni Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Georgia Ports Authority, United States
- Borneo Indobara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Mercuria Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Kohat Cement Company Ltd. - Pakistan
- Jorong Barutama Greston.PT - Indonesia
- GVK Power & Infra Limited - India
- Indogreen Group - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Deloitte Consulting - India
- McConnell Dowell - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meenaskhi Energy Private Limited - India
- Star Paper Mills Limited - India
- PNOC Exploration Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Thiess Contractors Indonesia
- Interocean Group of Companies - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Transport, Egypt
- Pipit Mutiara Jaya. PT, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Electricity Authority, New Zealand
- Sakthi Sugars Limited - India
- Altura Mining Limited, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Agrawal Coal Company - India
- Edison Trading Spa - Italy
- Global Green Power PLC Corporation, Philippines
- Indika Energy - Indonesia
- Mintek Dendrill Indonesia
- Tamil Nadu electricity Board
- Central Java Power - Indonesia
- LBH Netherlands Bv - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement PLC, Thailand
- European Bulk Services B.V. - Netherlands
- Barasentosa Lestari - Indonesia
- Wood Mackenzie - Singapore
- Energy Development Corp, Philippines
- Merrill Lynch Commodities Europe
- Malabar Cements Ltd - India
- Tata Chemicals Ltd - India
- Simpson Spence & Young - Indonesia
- Kaltim Prima Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Finance - Indonesia
- Intertek Mineral Services - Indonesia
- Global Business Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Eastern Coal Council - USA
- San Jose City I Power Corp, Philippines
- Power Finance Corporation Ltd., India
- Semirara Mining and Power Corporation, Philippines
- The University of Queensland
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
- Aditya Birla Group - India
- Aboitiz Power Corporation - Philippines
- Wilmar Investment Holdings
- Lanco Infratech Ltd - India
- London Commodity Brokers - England
- Vizag Seaport Private Limited - India
- Banpu Public Company Limited - Thailand
- Sree Jayajothi Cements Limited - India
- CNBM International Corporation - China
- Holcim Trading Pte Ltd - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Essar Steel Hazira Ltd - India
- Makarim & Taira - Indonesia
- PowerSource Philippines DevCo
- Singapore Mercantile Exchange
- Indo Tambangraya Megah - Indonesia
- Dalmia Cement Bharat India
- Global Coal Blending Company Limited - Australia
- Metalloyd Limited - United Kingdom
- Commonwealth Bank - Australia
- Baramulti Group, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Latin American Coal - Colombia
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