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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, 23 April 14
KOMIPO INVITES BIDS FOR LOW VOLATILE BITUMINOUS COAL
COALspot.com : Korea Midland Power Co., Ltd. has invited bids through International open bidding for 90,000 Metric Tons (MT) of low volatile bit ...
Tuesday, 22 April 14
INDONESIAN MARCH COAL EXPORT VOLUME SURGE 9.12% TO 35.54 MMT
COALspot.com: Indonesia, one of the world's largest coal producer and the global largest multi grade coal exporter shipped around $1.9 ...
Tuesday, 22 April 14
NEWCASTLE WEEKLY COAL EXPORTS FELL 13.33% THIS PAST WEEK
COALspot.com: In the week ended 07:00 hours 21 April 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensl ...
Monday, 21 April 14
Q1'15 SUB-BIT FOB INDONESIA COAL SWAP SHOWING A POSITIVE TREND
COALspot.com: Indonesian coal swaps for average Q2’ 2014 gain on month and on week according to AsiaClear OTC coal swap's reports rele ...
Monday, 21 April 14
Q4 2014 AND Q1 2015 COAL SWAPS CLOSED MARGINALLY HIGHER COMPARED TO Q2 PRICES
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 deliveries gained 0.87 percent month on month and closed at US$ 76.15 per mt as ...
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- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Finance - Indonesia
- Heidelberg Cement - Germany
- Jorong Barutama Greston.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Tamil Nadu electricity Board
- Energy Development Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Altura Mining Limited, Indonesia
- Mercator Lines Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Commodity Traders Exchange
- Global Green Power PLC Corporation, Philippines
- Star Paper Mills Limited - India
- Semirara Mining Corp, Philippines
- Interocean Group of Companies - India
- Intertek Mineral Services - Indonesia
- Wood Mackenzie - Singapore
- Dalmia Cement Bharat India
- Medco Energi Mining Internasional
- GN Power Mariveles Coal Plant, Philippines
- PowerSource Philippines DevCo
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhatia International Limited - India
- Leighton Contractors Pty Ltd - Australia
- Malabar Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Meralco Power Generation, Philippines
- Renaissance Capital - South Africa
- Attock Cement Pakistan Limited
- Indian Energy Exchange, India
- CNBM International Corporation - China
- Simpson Spence & Young - Indonesia
- European Bulk Services B.V. - Netherlands
- Minerals Council of Australia
- OPG Power Generation Pvt Ltd - India
- IEA Clean Coal Centre - UK
- PetroVietnam Power Coal Import and Supply Company
- PTC India Limited - India
- Latin American Coal - Colombia
- San Jose City I Power Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Jaiprakash Power Ventures ltd
- International Coal Ventures Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- GAC Shipping (India) Pvt Ltd
- Maheswari Brothers Coal Limited - India
- Energy Link Ltd, New Zealand
- Indika Energy - Indonesia
- Thai Mozambique Logistica
- Africa Commodities Group - South Africa
- Indonesian Coal Mining Association
- Lanco Infratech Ltd - India
- The University of Queensland
- Aditya Birla Group - India
- Salva Resources Pvt Ltd - India
- Goldman Sachs - Singapore
- Essar Steel Hazira Ltd - India
- McConnell Dowell - Australia
- Bangladesh Power Developement Board
- CIMB Investment Bank - Malaysia
- Meenaskhi Energy Private Limited - India
- The State Trading Corporation of India Ltd
- IHS Mccloskey Coal Group - USA
- Bharathi Cement Corporation - India
- Sarangani Energy Corporation, Philippines
- Port Waratah Coal Services - Australia
- ASAPP Information Group - India
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bayan Resources Tbk. - Indonesia
- Orica Australia Pty. Ltd.
- Cigading International Bulk Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Business Power Corporation, Philippines
- Sojitz Corporation - Japan
- Thiess Contractors Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- PNOC Exploration Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- SMG Consultants - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Romanian Commodities Exchange
- Eastern Coal Council - USA
- Eastern Energy - Thailand
- Globalindo Alam Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Independent Power Producers Association of India
- Bukit Asam (Persero) Tbk - Indonesia
- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- Agrawal Coal Company - India
- Mjunction Services Limited - India
- India Bulls Power Limited - India
- Planning Commission, India
- Ambuja Cements Ltd - India
- Central Electricity Authority - India
- Bukit Baiduri Energy - Indonesia
- Kumho Petrochemical, South Korea
- South Luzon Thermal Energy Corporation
- Grasim Industreis Ltd - India
- Toyota Tsusho Corporation, Japan
- Australian Coal Association
- Riau Bara Harum - Indonesia
- Karaikal Port Pvt Ltd - India
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Bhushan Steel Limited - India
- Parliament of New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Tata Chemicals Ltd - India
- VISA Power Limited - India
- Trasteel International SA, Italy
- Manunggal Multi Energi - Indonesia
- Xindia Steels Limited - India
- Coastal Gujarat Power Limited - India
- Gujarat Sidhee Cement - India
- Sindya Power Generating Company Private Ltd
- Billiton Holdings Pty Ltd - Australia
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- Coal and Oil Company - UAE
- Therma Luzon, Inc, Philippines
- Deloitte Consulting - India
- Central Java Power - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Standard Chartered Bank - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sakthi Sugars Limited - India
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- Neyveli Lignite Corporation Ltd, - India
- Kartika Selabumi Mining - Indonesia
- Georgia Ports Authority, United States
- Indian Oil Corporation Limited
- Savvy Resources Ltd - HongKong
- New Zealand Coal & Carbon
- Chamber of Mines of South Africa
- Binh Thuan Hamico - Vietnam
- Metalloyd Limited - United Kingdom
- Indo Tambangraya Megah - Indonesia
- London Commodity Brokers - England
- Kepco SPC Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Barasentosa Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Siam City Cement PLC, Thailand
- AsiaOL BioFuels Corp., Philippines
- Kaltim Prima Coal - Indonesia
- Mintek Dendrill Indonesia
- Electricity Generating Authority of Thailand
- Merrill Lynch Commodities Europe
- Banpu Public Company Limited - Thailand
- Vedanta Resources Plc - India
- Iligan Light & Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Chettinad Cement Corporation Ltd - India
- Bhoruka Overseas - Indonesia
- ICICI Bank Limited - India
- Ministry of Transport, Egypt
- Kobexindo Tractors - Indoneisa
- White Energy Company Limited
- Antam Resourcindo - Indonesia
- Sree Jayajothi Cements Limited - India
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- Carbofer General Trading SA - India
- Karbindo Abesyapradhi - Indoneisa
- Sical Logistics Limited - India
- GMR Energy Limited - India
- SMC Global Power, Philippines
- Kideco Jaya Agung - Indonesia
- Vizag Seaport Private Limited - India
- Anglo American - United Kingdom
- Oldendorff Carriers - Singapore
- Ind-Barath Power Infra Limited - India
- Electricity Authority, New Zealand
- Baramulti Group, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Economic Council, Georgia
- Formosa Plastics Group - Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Coalindo Energy - Indonesia
- Posco Energy - South Korea
- Ministry of Mines - Canada
- Marubeni Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Singapore Mercantile Exchange
- Cement Manufacturers Association - India
- Indogreen Group - Indonesia
- Timah Investasi Mineral - Indoneisa
- Madhucon Powers Ltd - India
- SN Aboitiz Power Inc, Philippines
- Wilmar Investment Holdings
- Uttam Galva Steels Limited - India
- Larsen & Toubro Limited - India
- Borneo Indobara - Indonesia
- Videocon Industries ltd - India
- Makarim & Taira - Indonesia
- Petron Corporation, Philippines
- Rio Tinto Coal - Australia
- Krishnapatnam Port Company Ltd. - India
- Directorate Of Revenue Intelligence - India
- Siam City Cement - Thailand
- Orica Mining Services - Indonesia
- Mercuria Energy - Indonesia
- LBH Netherlands Bv - Netherlands
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