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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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- Orica Australia Pty. Ltd.
- ASAPP Information Group - India
- Bukit Baiduri Energy - Indonesia
- Aditya Birla Group - India
- LBH Netherlands Bv - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- Wood Mackenzie - Singapore
- Salva Resources Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- Ambuja Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- Karaikal Port Pvt Ltd - India
- Videocon Industries ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- European Bulk Services B.V. - Netherlands
- Aboitiz Power Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Transport, Egypt
- Mercator Lines Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Thai Mozambique Logistica
- Krishnapatnam Port Company Ltd. - India
- TeaM Sual Corporation - Philippines
- Rio Tinto Coal - Australia
- Gujarat Mineral Development Corp Ltd - India
- PNOC Exploration Corporation - Philippines
- Malabar Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Uttam Galva Steels Limited - India
- New Zealand Coal & Carbon
- Trasteel International SA, Italy
- McConnell Dowell - Australia
- Straits Asia Resources Limited - Singapore
- Bhatia International Limited - India
- Kideco Jaya Agung - Indonesia
- Chamber of Mines of South Africa
- Essar Steel Hazira Ltd - India
- Planning Commission, India
- Meralco Power Generation, Philippines
- IHS Mccloskey Coal Group - USA
- Carbofer General Trading SA - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Australian Coal Association
- Eastern Energy - Thailand
- Metalloyd Limited - United Kingdom
- Savvy Resources Ltd - HongKong
- Indonesian Coal Mining Association
- Anglo American - United Kingdom
- CIMB Investment Bank - Malaysia
- White Energy Company Limited
- ICICI Bank Limited - India
- The State Trading Corporation of India Ltd
- Maheswari Brothers Coal Limited - India
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement - Thailand
- Australian Commodity Traders Exchange
- Merrill Lynch Commodities Europe
- Power Finance Corporation Ltd., India
- Petron Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- Sical Logistics Limited - India
- Formosa Plastics Group - Taiwan
- Semirara Mining and Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Electricity Authority, New Zealand
- PowerSource Philippines DevCo
- Marubeni Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Goldman Sachs - Singapore
- Altura Mining Limited, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Coal and Oil Company - UAE
- Central Java Power - Indonesia
- Banpu Public Company Limited - Thailand
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Bangladesh Power Developement Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhushan Steel Limited - India
- Port Waratah Coal Services - Australia
- Kaltim Prima Coal - Indonesia
- Georgia Ports Authority, United States
- London Commodity Brokers - England
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- Bulk Trading Sa - Switzerland
- Antam Resourcindo - Indonesia
- MS Steel International - UAE
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- Manunggal Multi Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- SMG Consultants - Indonesia
- Cement Manufacturers Association - India
- Riau Bara Harum - Indonesia
- Globalindo Alam Lestari - Indonesia
- Independent Power Producers Association of India
- Eastern Coal Council - USA
- Vedanta Resources Plc - India
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- Agrawal Coal Company - India
- The University of Queensland
- Indika Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Maharashtra Electricity Regulatory Commission - India
- PTC India Limited - India
- Jaiprakash Power Ventures ltd
- Sree Jayajothi Cements Limited - India
- Sindya Power Generating Company Private Ltd
- Semirara Mining Corp, Philippines
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- Bhoruka Overseas - Indonesia
- CNBM International Corporation - China
- Tamil Nadu electricity Board
- Bukit Makmur.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Central Electricity Authority - India
- Orica Mining Services - Indonesia
- Indian Energy Exchange, India
- Oldendorff Carriers - Singapore
- Grasim Industreis Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Edison Trading Spa - Italy
- Global Business Power Corporation, Philippines
- India Bulls Power Limited - India
- Sakthi Sugars Limited - India
- SMC Global Power, Philippines
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Economic Council, Georgia
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Jindal Steel & Power Ltd - India
- Baramulti Group, Indonesia
- Minerals Council of Australia
- Mercuria Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Larsen & Toubro Limited - India
- Gujarat Sidhee Cement - India
- Toyota Tsusho Corporation, Japan
- Ceylon Electricity Board - Sri Lanka
- Borneo Indobara - Indonesia
- Coalindo Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Sojitz Corporation - Japan
- Electricity Generating Authority of Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Price Waterhouse Coopers - Russia
- The Treasury - Australian Government
- Energy Development Corp, Philippines
- Makarim & Taira - Indonesia
- Latin American Coal - Colombia
- Interocean Group of Companies - India
- Mintek Dendrill Indonesia
- Renaissance Capital - South Africa
- Global Coal Blending Company Limited - Australia
- Cigading International Bulk Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Indogreen Group - Indonesia
- Xindia Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Iligan Light & Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- Gujarat Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Ministry of Mines - Canada
- Kapuas Tunggal Persada - Indonesia
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Commonwealth Bank - Australia
- Simpson Spence & Young - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kartika Selabumi Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Timah Investasi Mineral - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Singapore Mercantile Exchange
- Chettinad Cement Corporation Ltd - India
- Posco Energy - South Korea
- Thiess Contractors Indonesia
- Energy Link Ltd, New Zealand
- VISA Power Limited - India
- Attock Cement Pakistan Limited
- GAC Shipping (India) Pvt Ltd
- Medco Energi Mining Internasional
- Coastal Gujarat Power Limited - India
- Romanian Commodities Exchange
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