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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, 09 April 14
DRY BULK MARKET STRUGGLED THROUGHOUT THE WEEK - INTERMODAL
The Dry Bulk market struggled throughout the week but the poor performance across the board didn't allow for any positive reversal, pushing ...
Tuesday, 08 April 14
PORT OF NEWCASTLE SHIPPED 2.90 MMT OF POWER PLANT AND SEMI-SOFT COKING COAL IN A WEEK
COALspot.com: In the week ended 07:00 hours 7 April 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensla ...
Tuesday, 08 April 14
RBCT SHIPPED 53.79% MORE COAL IN MARCH 2014
COALspot.com: South Africa's Richards Bay Coal Terminal (RBCT) the single largest export coal terminal in the world, shipped 6.90 million to ...
Tuesday, 08 April 14
APRIL 2014 INDONESIAN COAL PRICE REFERENCE DROPS TO LOWEST SINCE JANUARY 2010
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia has revised down again the coal bench mark price by US$ 2.20 / MT to ...
Tuesday, 08 April 14
TALKING ABOUT A ONE-HORSE RACE - GEORGE LAZARIDIS
Ever since the onslaught of the financial crisis, China along with the other BRIICs, have played a pivotal role in supporting global economic gr ...
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- Karaikal Port Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Ministry of Transport, Egypt
- TNB Fuel Sdn Bhd - Malaysia
- Coalindo Energy - Indonesia
- Thai Mozambique Logistica
- Romanian Commodities Exchange
- The State Trading Corporation of India Ltd
- Merrill Lynch Commodities Europe
- Bank of Tokyo Mitsubishi UFJ Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- PTC India Limited - India
- Mercator Lines Limited - India
- Kaltim Prima Coal - Indonesia
- Vizag Seaport Private Limited - India
- London Commodity Brokers - England
- Billiton Holdings Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Borneo Indobara - Indonesia
- Price Waterhouse Coopers - Russia
- New Zealand Coal & Carbon
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- Sakthi Sugars Limited - India
- Vedanta Resources Plc - India
- Port Waratah Coal Services - Australia
- Wood Mackenzie - Singapore
- Minerals Council of Australia
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Posco Energy - South Korea
- Global Green Power PLC Corporation, Philippines
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- McConnell Dowell - Australia
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- Indian Oil Corporation Limited
- Medco Energi Mining Internasional
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- Bharathi Cement Corporation - India
- Ministry of Mines - Canada
- Australian Coal Association
- Sarangani Energy Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Cement Manufacturers Association - India
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- Renaissance Capital - South Africa
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- Kohat Cement Company Ltd. - Pakistan
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- Kumho Petrochemical, South Korea
- Indian Energy Exchange, India
- Energy Link Ltd, New Zealand
- Mintek Dendrill Indonesia
- Standard Chartered Bank - UAE
- Jindal Steel & Power Ltd - India
- Heidelberg Cement - Germany
- Maheswari Brothers Coal Limited - India
- Ceylon Electricity Board - Sri Lanka
- Indogreen Group - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Coal and Oil Company - UAE
- Semirara Mining Corp, Philippines
- Metalloyd Limited - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Holcim Trading Pte Ltd - Singapore
- Gujarat Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Australian Commodity Traders Exchange
- GMR Energy Limited - India
- Planning Commission, India
- Eastern Energy - Thailand
- Trasteel International SA, Italy
- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- Tata Chemicals Ltd - India
- Baramulti Group, Indonesia
- Sojitz Corporation - Japan
- Sinarmas Energy and Mining - Indonesia
- Singapore Mercantile Exchange
- Independent Power Producers Association of India
- San Jose City I Power Corp, Philippines
- Commonwealth Bank - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Mjunction Services Limited - India
- Larsen & Toubro Limited - India
- Indonesian Coal Mining Association
- Goldman Sachs - Singapore
- Sical Logistics Limited - India
- MS Steel International - UAE
- Madhucon Powers Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Makarim & Taira - Indonesia
- European Bulk Services B.V. - Netherlands
- India Bulls Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Bukit Makmur.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Oldendorff Carriers - Singapore
- ASAPP Information Group - India
- International Coal Ventures Pvt Ltd - India
- SMG Consultants - Indonesia
- South Luzon Thermal Energy Corporation
- Central Java Power - Indonesia
- CNBM International Corporation - China
- OPG Power Generation Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- VISA Power Limited - India
- The University of Queensland
- Savvy Resources Ltd - HongKong
- Bayan Resources Tbk. - Indonesia
- Jaiprakash Power Ventures ltd
- Banpu Public Company Limited - Thailand
- Rio Tinto Coal - Australia
- Miang Besar Coal Terminal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Sidhee Cement - India
- Meenaskhi Energy Private Limited - India
- Meralco Power Generation, Philippines
- Parliament of New Zealand
- SN Aboitiz Power Inc, Philippines
- Malabar Cements Ltd - India
- Altura Mining Limited, Indonesia
- Tamil Nadu electricity Board
- Karbindo Abesyapradhi - Indoneisa
- Economic Council, Georgia
- Bukit Baiduri Energy - Indonesia
- Parry Sugars Refinery, India
- Asmin Koalindo Tuhup - Indonesia
- Barasentosa Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Sindya Power Generating Company Private Ltd
- SMC Global Power, Philippines
- IHS Mccloskey Coal Group - USA
- Coastal Gujarat Power Limited - India
- Latin American Coal - Colombia
- Ind-Barath Power Infra Limited - India
- Power Finance Corporation Ltd., India
- Pendopo Energi Batubara - Indonesia
- Wilmar Investment Holdings
- Interocean Group of Companies - India
- PetroVietnam Power Coal Import and Supply Company
- TeaM Sual Corporation - Philippines
- Anglo American - United Kingdom
- IEA Clean Coal Centre - UK
- Antam Resourcindo - Indonesia
- ICICI Bank Limited - India
- Orica Mining Services - Indonesia
- Indika Energy - Indonesia
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- Deloitte Consulting - India
- Iligan Light & Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- Ministry of Finance - Indonesia
- CIMB Investment Bank - Malaysia
- Toyota Tsusho Corporation, Japan
- Electricity Authority, New Zealand
- Dalmia Cement Bharat India
- Bulk Trading Sa - Switzerland
- Marubeni Corporation - India
- Mercuria Energy - Indonesia
- Ambuja Cements Ltd - India
- Africa Commodities Group - South Africa
- Uttam Galva Steels Limited - India
- Riau Bara Harum - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- Chamber of Mines of South Africa
- Siam City Cement - Thailand
- Salva Resources Pvt Ltd - India
- Agrawal Coal Company - India
- Thiess Contractors Indonesia
- Electricity Generating Authority of Thailand
- Global Coal Blending Company Limited - Australia
- Attock Cement Pakistan Limited
- Petron Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- The Treasury - Australian Government
- Directorate General of MIneral and Coal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Development Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Bhushan Steel Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Videocon Industries ltd - India
- Siam City Cement PLC, Thailand
- Semirara Mining and Power Corporation, Philippines
- Central Electricity Authority - India
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