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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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Wednesday, 03 September 14
KOREA MIDLAND POWER CO. LTD INVITES BIDS FOR 1 MMT OF BITUMINOUS & SUB-BITUMINOUS COAL FOR BORYEONG POWER PLANT
COALspot.com: KOMIPO again in the market for 1 million tons of 5700 NAR and 4600 NAR coal for Jan – March 2015. South Korean state-owned util ...
Wednesday, 03 September 14
CFR S.CHINA COAL SWAP FOR JAN 2015 DELIVERY CLOSED AT $ 68.30 PMT; DOWN 2.43% W-O-W
COALspot.com: API 8 CFR South China Coal swap for delivery in October 2014 decreased US$ 0.95 (-1.39%) day on day and US$ 1.40 (-2.03%) week on wee ...
Tuesday, 02 September 14
BERAU COAL HAS AWARDED A CONTRACT EXTENSION TO BUMA FOR 647 MLN BCM OVERBURDEN REMOVAL
COALspot.com: PT Delta Dunia Makmur Tbk (“DOID”) has announced that its primary operating subsidiary, PT Bukit Makmur Mandiri Utama (&l ...
Monday, 01 September 14
GLOBALCOAL WELCOMES TWO NEW MARKET MEMBERS
COALspot.com: globalCOAL® announced today that two Market Members have joined its trading community. Both new Market Members are from the India ...
Sunday, 31 August 14
COAL FREIGHT RATES INTO INDIA FROM INDONESIA FIRM
COALspot.com: The freight market continued to firm this week. BDI up 5.42 percent week ended 29 August and closed at 1147 points while the Ca ...
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- Global Business Power Corporation, Philippines
- Videocon Industries ltd - India
- Electricity Generating Authority of Thailand
- TeaM Sual Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Jaiprakash Power Ventures ltd
- Kumho Petrochemical, South Korea
- Altura Mining Limited, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- Sinarmas Energy and Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Kideco Jaya Agung - Indonesia
- Miang Besar Coal Terminal - Indonesia
- MS Steel International - UAE
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Gujarat Sidhee Cement - India
- Parry Sugars Refinery, India
- Central Electricity Authority - India
- Toyota Tsusho Corporation, Japan
- Ministry of Finance - Indonesia
- London Commodity Brokers - England
- Karbindo Abesyapradhi - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Latin American Coal - Colombia
- Power Finance Corporation Ltd., India
- San Jose City I Power Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Meenaskhi Energy Private Limited - India
- Agrawal Coal Company - India
- The Treasury - Australian Government
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- Indonesian Coal Mining Association
- Pendopo Energi Batubara - Indonesia
- Wood Mackenzie - Singapore
- Kepco SPC Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Sojitz Corporation - Japan
- Larsen & Toubro Limited - India
- Uttam Galva Steels Limited - India
- Trasteel International SA, Italy
- Orica Australia Pty. Ltd.
- Posco Energy - South Korea
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- Bhatia International Limited - India
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- Electricity Authority, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bangladesh Power Developement Board
- Star Paper Mills Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coastal Gujarat Power Limited - India
- International Coal Ventures Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
- Merrill Lynch Commodities Europe
- Billiton Holdings Pty Ltd - Australia
- India Bulls Power Limited - India
- Marubeni Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- Global Green Power PLC Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Anglo American - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Orica Mining Services - Indonesia
- Indian Oil Corporation Limited
- Cement Manufacturers Association - India
- PNOC Exploration Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- GN Power Mariveles Coal Plant, Philippines
- VISA Power Limited - India
- SMC Global Power, Philippines
- Leighton Contractors Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Bharathi Cement Corporation - India
- IEA Clean Coal Centre - UK
- Bukit Baiduri Energy - Indonesia
- Ministry of Mines - Canada
- Africa Commodities Group - South Africa
- Borneo Indobara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Lanco Infratech Ltd - India
- CNBM International Corporation - China
- Mjunction Services Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Romanian Commodities Exchange
- Mercuria Energy - Indonesia
- Eastern Coal Council - USA
- Kartika Selabumi Mining - Indonesia
- Ambuja Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Xindia Steels Limited - India
- Australian Coal Association
- Metalloyd Limited - United Kingdom
- Medco Energi Mining Internasional
- Madhucon Powers Ltd - India
- Planning Commission, India
- Tamil Nadu electricity Board
- Edison Trading Spa - Italy
- Energy Link Ltd, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- Parliament of New Zealand
- White Energy Company Limited
- The State Trading Corporation of India Ltd
- PTC India Limited - India
- Attock Cement Pakistan Limited
- Thiess Contractors Indonesia
- Salva Resources Pvt Ltd - India
- Goldman Sachs - Singapore
- Barasentosa Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Directorate Of Revenue Intelligence - India
- Standard Chartered Bank - UAE
- Bayan Resources Tbk. - Indonesia
- Independent Power Producers Association of India
- LBH Netherlands Bv - Netherlands
- McConnell Dowell - Australia
- Bulk Trading Sa - Switzerland
- Minerals Council of Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Price Waterhouse Coopers - Russia
- Straits Asia Resources Limited - Singapore
- Manunggal Multi Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Aditya Birla Group - India
- Chettinad Cement Corporation Ltd - India
- Kaltim Prima Coal - Indonesia
- Tata Chemicals Ltd - India
- Indogreen Group - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Malabar Cements Ltd - India
- Ministry of Transport, Egypt
- Petron Corporation, Philippines
- Semirara Mining Corp, Philippines
- Bhushan Steel Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- PowerSource Philippines DevCo
- Georgia Ports Authority, United States
- Holcim Trading Pte Ltd - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Coal and Oil Company - UAE
- Ceylon Electricity Board - Sri Lanka
- TNB Fuel Sdn Bhd - Malaysia
- Banpu Public Company Limited - Thailand
- Siam City Cement - Thailand
- Renaissance Capital - South Africa
- Vizag Seaport Private Limited - India
- Interocean Group of Companies - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Directorate General of MIneral and Coal - Indonesia
- SMG Consultants - Indonesia
- Carbofer General Trading SA - India
- ICICI Bank Limited - India
- Coalindo Energy - Indonesia
- Rio Tinto Coal - Australia
- Globalindo Alam Lestari - Indonesia
- Siam City Cement PLC, Thailand
- GMR Energy Limited - India
- Baramulti Group, Indonesia
- CIMB Investment Bank - Malaysia
- ASAPP Information Group - India
- Australian Commodity Traders Exchange
- Bhoruka Overseas - Indonesia
- Savvy Resources Ltd - HongKong
- Therma Luzon, Inc, Philippines
- Commonwealth Bank - Australia
- Deloitte Consulting - India
- Thai Mozambique Logistica
- Sarangani Energy Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Singapore Mercantile Exchange
- Vedanta Resources Plc - India
- Antam Resourcindo - Indonesia
- Grasim Industreis Ltd - India
- The University of Queensland
- Asmin Koalindo Tuhup - Indonesia
- Kobexindo Tractors - Indoneisa
- Meralco Power Generation, Philippines
- Chamber of Mines of South Africa
- Sical Logistics Limited - India
- Gujarat Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Java Power - Indonesia
- Oldendorff Carriers - Singapore
- Indo Tambangraya Megah - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kapuas Tunggal Persada - Indonesia
- Mercator Lines Limited - India
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Energy Development Corp, Philippines
- Sakthi Sugars Limited - India
- Riau Bara Harum - Indonesia
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- Karaikal Port Pvt Ltd - India
- Mintek Dendrill Indonesia
- OPG Power Generation Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
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