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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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Tuesday, 29 October 13
NEWCASTLE PORT SHIPPED 12.29 PER CENT MORE COAL W-W
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 12.29 per cent week on week to 3.61 million mt for ...
Monday, 28 October 13
API 8 CFR SOUTH CHINA COAL FOR Q3'14 DELIVERY LOST ON D-D,W-W & M-M
COALspot.com : API 8 CFR South China Coal swaps for average Q4 2013 delivery fell 0.22 percept M-M on Friday 25 October 2013. The CFR South China Co ...
Monday, 28 October 13
COAL SWAP FOR Q3' 2014 DELIVERY LOST ON D-D, W-W AND M-M
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery gained 0.46 percept month on month on Friday 25 October 2 ...
Saturday, 26 October 13
PANAMAX CHARTER RATES FROM INDONESIA TO INDIA STAY FIRM - SOLYM
COALspot.com: The freight market showed tendency of softness with Cape and Panamax futures and physical soft.
The BDI was down by 12 pct week end ...
Saturday, 26 October 13
DRY BULK MARKET KEEPS ON RETREATING, BUT NEW BUILDING ORDERS KEEP ON PILING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market kept on retreating this week, with the industry's benchmark, the Baltic Dry Index (BDI) falling to 1,708 points, down 78 on the ...
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- Directorate Of Revenue Intelligence - India
- TeaM Sual Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Latin American Coal - Colombia
- India Bulls Power Limited - India
- Marubeni Corporation - India
- International Coal Ventures Pvt Ltd - India
- Attock Cement Pakistan Limited
- Malabar Cements Ltd - India
- Thiess Contractors Indonesia
- Merrill Lynch Commodities Europe
- Kobexindo Tractors - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Mines - Canada
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Ministry of Transport, Egypt
- Maheswari Brothers Coal Limited - India
- Metalloyd Limited - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- SMG Consultants - Indonesia
- Rio Tinto Coal - Australia
- Ministry of Finance - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kideco Jaya Agung - Indonesia
- Savvy Resources Ltd - HongKong
- Cigading International Bulk Terminal - Indonesia
- Baramulti Group, Indonesia
- Lanco Infratech Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Sojitz Corporation - Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- IEA Clean Coal Centre - UK
- Jindal Steel & Power Ltd - India
- Posco Energy - South Korea
- Bukit Makmur.PT - Indonesia
- PTC India Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- McConnell Dowell - Australia
- Uttam Galva Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- GAC Shipping (India) Pvt Ltd
- Interocean Group of Companies - India
- Sarangani Energy Corporation, Philippines
- Indogreen Group - Indonesia
- Leighton Contractors Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Coal and Oil Company - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Australian Coal Association
- Romanian Commodities Exchange
- Intertek Mineral Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Bharathi Cement Corporation - India
- Bayan Resources Tbk. - Indonesia
- The State Trading Corporation of India Ltd
- White Energy Company Limited
- Anglo American - United Kingdom
- Mercator Lines Limited - India
- Bhoruka Overseas - Indonesia
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- Straits Asia Resources Limited - Singapore
- Ind-Barath Power Infra Limited - India
- Antam Resourcindo - Indonesia
- Global Coal Blending Company Limited - Australia
- Makarim & Taira - Indonesia
- Karaikal Port Pvt Ltd - India
- Mjunction Services Limited - India
- Pendopo Energi Batubara - Indonesia
- Tata Chemicals Ltd - India
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Oldendorff Carriers - Singapore
- Deloitte Consulting - India
- Carbofer General Trading SA - India
- Ceylon Electricity Board - Sri Lanka
- Formosa Plastics Group - Taiwan
- Orica Australia Pty. Ltd.
- Banpu Public Company Limited - Thailand
- Thai Mozambique Logistica
- Kaltim Prima Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Bulk Trading Sa - Switzerland
- Bangladesh Power Developement Board
- GVK Power & Infra Limited - India
- Standard Chartered Bank - UAE
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- ASAPP Information Group - India
- Manunggal Multi Energi - Indonesia
- Parry Sugars Refinery, India
- Bahari Cakrawala Sebuku - Indonesia
- Larsen & Toubro Limited - India
- IHS Mccloskey Coal Group - USA
- Independent Power Producers Association of India
- Samtan Co., Ltd - South Korea
- Orica Mining Services - Indonesia
- Parliament of New Zealand
- Therma Luzon, Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Asmin Koalindo Tuhup - Indonesia
- Barasentosa Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- Jaiprakash Power Ventures ltd
- Ambuja Cements Ltd - India
- Indian Oil Corporation Limited
- OPG Power Generation Pvt Ltd - India
- Sakthi Sugars Limited - India
- MS Steel International - UAE
- Star Paper Mills Limited - India
- Medco Energi Mining Internasional
- Energy Development Corp, Philippines
- New Zealand Coal & Carbon
- Gujarat Electricity Regulatory Commission - India
- The University of Queensland
- Central Java Power - Indonesia
- Electricity Authority, New Zealand
- Minerals Council of Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining Corp, Philippines
- Videocon Industries ltd - India
- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
- Port Waratah Coal Services - Australia
- Singapore Mercantile Exchange
- Aditya Birla Group - India
- Wood Mackenzie - Singapore
- Meralco Power Generation, Philippines
- Central Electricity Authority - India
- Indonesian Coal Mining Association
- Sical Logistics Limited - India
- Maharashtra Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Georgia Ports Authority, United States
- SMC Global Power, Philippines
- Chettinad Cement Corporation Ltd - India
- PNOC Exploration Corporation - Philippines
- Indika Energy - Indonesia
- Planning Commission, India
- Renaissance Capital - South Africa
- Holcim Trading Pte Ltd - Singapore
- Petron Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Dalmia Cement Bharat India
- Jorong Barutama Greston.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- GMR Energy Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Xindia Steels Limited - India
- Salva Resources Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Power Finance Corporation Ltd., India
- Borneo Indobara - Indonesia
- CNBM International Corporation - China
- Indo Tambangraya Megah - Indonesia
- Mercuria Energy - Indonesia
- Kumho Petrochemical, South Korea
- Siam City Cement - Thailand
- ICICI Bank Limited - India
- Bhatia International Limited - India
- Economic Council, Georgia
- Mintek Dendrill Indonesia
- Madhucon Powers Ltd - India
- Simpson Spence & Young - Indonesia
- Vedanta Resources Plc - India
- Riau Bara Harum - Indonesia
- Billiton Holdings Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- Pipit Mutiara Jaya. PT, Indonesia
- Goldman Sachs - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Grasim Industreis Ltd - India
- Bukit Baiduri Energy - Indonesia
- Commonwealth Bank - Australia
- Electricity Generating Authority of Thailand
- Agrawal Coal Company - India
- London Commodity Brokers - England
- Altura Mining Limited, Indonesia
- Tamil Nadu electricity Board
- Kapuas Tunggal Persada - Indonesia
- Cement Manufacturers Association - India
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- Trasteel International SA, Italy
- Gujarat Sidhee Cement - India
- Edison Trading Spa - Italy
- Essar Steel Hazira Ltd - India
- Australian Commodity Traders Exchange
- Heidelberg Cement - Germany
- Coastal Gujarat Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Eastern Energy - Thailand
- Kepco SPC Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Chamber of Mines of South Africa
- Wilmar Investment Holdings
- GN Power Mariveles Coal Plant, Philippines
- Binh Thuan Hamico - Vietnam
- Sree Jayajothi Cements Limited - India
- Price Waterhouse Coopers - Russia
- Krishnapatnam Port Company Ltd. - India
- Global Green Power PLC Corporation, Philippines
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