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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, 16 April 14
Q1 2014 : TERMS OF FREIGHT RATES THE PERFORMANCE IN THE DRY BULK MARKET HAS NOT MET THE HIGH EXPECTATIONS - INTERMODAL
This year the dates for the celebration of Easter will coincide for the Orthodox and the Catholic, so we are already seeing most people in the m ...
Tuesday, 15 April 14
NEWCASTLE SHIPPED MORE COAL WEEK ON WEEK
COALspot.com: In the week ended 07:00 hours 14 April 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensl ...
Monday, 14 April 14
SUB-BIT FOB INDO COAL SWAP FOR Q1' 15 DELIVERY CLOSED AT US$ 60.12 PER MT
COALspot.com: Indonesian coal swaps for average Q4’ 2014 gain on month and on week according to AsiaClear OTC coal swap's reports rele ...
Monday, 14 April 14
INDONESIA'S Q1 COAL PRODUCTION LITTLE CHANGED EVEN WITH PRICE DROP - INVESTOR DAILY
Indonesia’s coal production by volume in the first quarter remained little changed from the same period last year despite the decline in t ...
Monday, 14 April 14
API 8 CFR SOUTH CHINA COAL SWAPS GAIN FOR THE MONTH & WEEK
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 deliveries gained 4.61 percent month on month and closed at US$ 76.18 per mt as ...
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- Gujarat Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Standard Chartered Bank - UAE
- Global Green Power PLC Corporation, Philippines
- Indian Energy Exchange, India
- Sree Jayajothi Cements Limited - India
- White Energy Company Limited
- OPG Power Generation Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Edison Trading Spa - Italy
- Krishnapatnam Port Company Ltd. - India
- Jaiprakash Power Ventures ltd
- Mintek Dendrill Indonesia
- Attock Cement Pakistan Limited
- Uttam Galva Steels Limited - India
- Thiess Contractors Indonesia
- Minerals Council of Australia
- Interocean Group of Companies - India
- Kideco Jaya Agung - Indonesia
- Deloitte Consulting - India
- Posco Energy - South Korea
- Carbofer General Trading SA - India
- Globalindo Alam Lestari - Indonesia
- McConnell Dowell - Australia
- Sindya Power Generating Company Private Ltd
- Renaissance Capital - South Africa
- Rio Tinto Coal - Australia
- Siam City Cement PLC, Thailand
- Price Waterhouse Coopers - Russia
- Port Waratah Coal Services - Australia
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Leighton Contractors Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Mercator Lines Limited - India
- CNBM International Corporation - China
- Altura Mining Limited, Indonesia
- Sojitz Corporation - Japan
- Intertek Mineral Services - Indonesia
- Ministry of Transport, Egypt
- Kumho Petrochemical, South Korea
- CIMB Investment Bank - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- PTC India Limited - India
- Holcim Trading Pte Ltd - Singapore
- Mjunction Services Limited - India
- Kartika Selabumi Mining - Indonesia
- Oldendorff Carriers - Singapore
- Merrill Lynch Commodities Europe
- Parry Sugars Refinery, India
- IHS Mccloskey Coal Group - USA
- Bhoruka Overseas - Indonesia
- Orica Mining Services - Indonesia
- SMG Consultants - Indonesia
- Cement Manufacturers Association - India
- Riau Bara Harum - Indonesia
- Samtan Co., Ltd - South Korea
- Directorate Of Revenue Intelligence - India
- Maharashtra Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Bhushan Steel Limited - India
- Bukit Makmur.PT - Indonesia
- Energy Development Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- MS Steel International - UAE
- Trasteel International SA, Italy
- Latin American Coal - Colombia
- Mercuria Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Romanian Commodities Exchange
- Australian Commodity Traders Exchange
- Asmin Koalindo Tuhup - Indonesia
- India Bulls Power Limited - India
- South Luzon Thermal Energy Corporation
- SMC Global Power, Philippines
- Indonesian Coal Mining Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Link Ltd, New Zealand
- Indian Oil Corporation Limited
- Parliament of New Zealand
- Videocon Industries ltd - India
- Formosa Plastics Group - Taiwan
- GAC Shipping (India) Pvt Ltd
- Gujarat Sidhee Cement - India
- Savvy Resources Ltd - HongKong
- Simpson Spence & Young - Indonesia
- TeaM Sual Corporation - Philippines
- Grasim Industreis Ltd - India
- Banpu Public Company Limited - Thailand
- Ind-Barath Power Infra Limited - India
- Semirara Mining Corp, Philippines
- Vizag Seaport Private Limited - India
- Power Finance Corporation Ltd., India
- Larsen & Toubro Limited - India
- Jindal Steel & Power Ltd - India
- IEA Clean Coal Centre - UK
- Eastern Coal Council - USA
- Manunggal Multi Energi - Indonesia
- ASAPP Information Group - India
- Dalmia Cement Bharat India
- PNOC Exploration Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Salva Resources Pvt Ltd - India
- Economic Council, Georgia
- Antam Resourcindo - Indonesia
- ICICI Bank Limited - India
- Africa Commodities Group - South Africa
- Orica Australia Pty. Ltd.
- Xindia Steels Limited - India
- European Bulk Services B.V. - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Malabar Cements Ltd - India
- Wilmar Investment Holdings
- Star Paper Mills Limited - India
- Makarim & Taira - Indonesia
- Independent Power Producers Association of India
- Binh Thuan Hamico - Vietnam
- Bukit Baiduri Energy - Indonesia
- Madhucon Powers Ltd - India
- Sical Logistics Limited - India
- Meenaskhi Energy Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- Rashtriya Ispat Nigam Limited - India
- Anglo American - United Kingdom
- Karaikal Port Pvt Ltd - India
- Sakthi Sugars Limited - India
- Pendopo Energi Batubara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Business Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bangladesh Power Developement Board
- GVK Power & Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- London Commodity Brokers - England
- Coastal Gujarat Power Limited - India
- Barasentosa Lestari - Indonesia
- Central Java Power - Indonesia
- Bhatia International Limited - India
- Kaltim Prima Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Wood Mackenzie - Singapore
- Electricity Authority, New Zealand
- Bharathi Cement Corporation - India
- Aboitiz Power Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Eastern Energy - Thailand
- Toyota Tsusho Corporation, Japan
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- VISA Power Limited - India
- Thai Mozambique Logistica
- Ministry of Finance - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Vedanta Resources Plc - India
- Petron Corporation, Philippines
- Marubeni Corporation - India
- Heidelberg Cement - Germany
- Maheswari Brothers Coal Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Straits Asia Resources Limited - Singapore
- Meralco Power Generation, Philippines
- Indika Energy - Indonesia
- Coalindo Energy - Indonesia
- Tamil Nadu electricity Board
- Kobexindo Tractors - Indoneisa
- Coal and Oil Company - UAE
- Ministry of Mines - Canada
- Vijayanagar Sugar Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Medco Energi Mining Internasional
- San Jose City I Power Corp, Philippines
- The Treasury - Australian Government
- Timah Investasi Mineral - Indoneisa
- Siam City Cement - Thailand
- Essar Steel Hazira Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- Ambuja Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Lanco Infratech Ltd - India
- The State Trading Corporation of India Ltd
- Agrawal Coal Company - India
- Electricity Generating Authority of Thailand
- Alfred C Toepfer International GmbH - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Baramulti Group, Indonesia
- Australian Coal Association
- Sarangani Energy Corporation, Philippines
- Central Electricity Authority - India
- Metalloyd Limited - United Kingdom
- New Zealand Coal & Carbon
- Chamber of Mines of South Africa
- Indogreen Group - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- GMR Energy Limited - India
- Borneo Indobara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Tata Chemicals Ltd - India
- Planning Commission, India
- The University of Queensland
- Ceylon Electricity Board - Sri Lanka
- Singapore Mercantile Exchange
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