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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, 22 October 13
NEWCASTLE PORT SERVED 38 OCEAN GOING VESSELS IN A WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 0.64 per cent week on week to 3.21 million mt for ...
Tuesday, 22 October 13
KOWEPO INVITED BIDS FOR MULTI GRADE COAL
COALspot.com - Korea Western Power Co., Ltd. (KOWEPO), a Korean electricity generator intends to procure 240,000 tons of multi grade coal for its Ta ...
Monday, 21 October 13
SOUTH CHINA COAL SWAP FOR 2014 DELIVERIES SHOW A POSITIVE TREND
COALspot.com : API 8 CFR South China Coal swaps for average Q4 2013 delivery fell 0.02 percept M-M on Friday 18 October 2013. The CFR South China Co ...
Sunday, 20 October 13
Q3'14 SUB-BIT INDO COAL SWAP CLOSED AT $ 61.80 PMT W/E 18 OCT' 13
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery fell 0.93 percept month on month on Friday 18 October 201 ...
Saturday, 19 October 13
NICKEL ORE SHIPMENTS KEEP SUPRAMAX CHARTER RATES STEADY - CAPT. REDDY
COALspot.com : The futures freight market continued to go down which was reflected in the physical markets as well.
The BDI continued to be soft ...
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- Sindya Power Generating Company Private Ltd
- International Coal Ventures Pvt Ltd - India
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Medco Energi Mining Internasional
- Semirara Mining and Power Corporation, Philippines
- Ambuja Cements Ltd - India
- MS Steel International - UAE
- Bayan Resources Tbk. - Indonesia
- Bangladesh Power Developement Board
- Port Waratah Coal Services - Australia
- Ministry of Mines - Canada
- Toyota Tsusho Corporation, Japan
- Bhatia International Limited - India
- IHS Mccloskey Coal Group - USA
- Carbofer General Trading SA - India
- Tamil Nadu electricity Board
- Central Electricity Authority - India
- Jaiprakash Power Ventures ltd
- Economic Council, Georgia
- Karaikal Port Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Merrill Lynch Commodities Europe
- Lanco Infratech Ltd - India
- Baramulti Group, Indonesia
- McConnell Dowell - Australia
- Rashtriya Ispat Nigam Limited - India
- Attock Cement Pakistan Limited
- Kalimantan Lumbung Energi - Indonesia
- White Energy Company Limited
- Africa Commodities Group - South Africa
- Banpu Public Company Limited - Thailand
- New Zealand Coal & Carbon
- Riau Bara Harum - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kideco Jaya Agung - Indonesia
- Semirara Mining Corp, Philippines
- Minerals Council of Australia
- Petron Corporation, Philippines
- Independent Power Producers Association of India
- Cement Manufacturers Association - India
- Malabar Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Wood Mackenzie - Singapore
- ASAPP Information Group - India
- Georgia Ports Authority, United States
- Mercuria Energy - Indonesia
- PTC India Limited - India
- Central Java Power - Indonesia
- Binh Thuan Hamico - Vietnam
- San Jose City I Power Corp, Philippines
- Bharathi Cement Corporation - India
- Energy Link Ltd, New Zealand
- Edison Trading Spa - Italy
- Rio Tinto Coal - Australia
- Power Finance Corporation Ltd., India
- Orica Mining Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kaltim Prima Coal - Indonesia
- Electricity Generating Authority of Thailand
- Coalindo Energy - Indonesia
- VISA Power Limited - India
- Altura Mining Limited, Indonesia
- Goldman Sachs - Singapore
- GVK Power & Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Makarim & Taira - Indonesia
- Kobexindo Tractors - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Videocon Industries ltd - India
- Orica Australia Pty. Ltd.
- Romanian Commodities Exchange
- Aditya Birla Group - India
- South Luzon Thermal Energy Corporation
- Latin American Coal - Colombia
- Chamber of Mines of South Africa
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- Energy Development Corp, Philippines
- Larsen & Toubro Limited - India
- Parry Sugars Refinery, India
- Grasim Industreis Ltd - India
- Kartika Selabumi Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Kohat Cement Company Ltd. - Pakistan
- ICICI Bank Limited - India
- Alfred C Toepfer International GmbH - Germany
- GAC Shipping (India) Pvt Ltd
- Trasteel International SA, Italy
- Australian Commodity Traders Exchange
- Meenaskhi Energy Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- Parliament of New Zealand
- Maheswari Brothers Coal Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Marubeni Corporation - India
- Commonwealth Bank - Australia
- Vizag Seaport Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Intertek Mineral Services - Indonesia
- Posco Energy - South Korea
- TeaM Sual Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Star Paper Mills Limited - India
- Anglo American - United Kingdom
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- Indika Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Coastal Gujarat Power Limited - India
- Sical Logistics Limited - India
- Coal and Oil Company - UAE
- Indonesian Coal Mining Association
- Karbindo Abesyapradhi - Indoneisa
- SMG Consultants - Indonesia
- Electricity Authority, New Zealand
- Straits Asia Resources Limited - Singapore
- Global Coal Blending Company Limited - Australia
- Eastern Energy - Thailand
- Chettinad Cement Corporation Ltd - India
- Oldendorff Carriers - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Interocean Group of Companies - India
- London Commodity Brokers - England
- PowerSource Philippines DevCo
- Globalindo Alam Lestari - Indonesia
- Standard Chartered Bank - UAE
- Holcim Trading Pte Ltd - Singapore
- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- AsiaOL BioFuels Corp., Philippines
- Jorong Barutama Greston.PT - Indonesia
- Samtan Co., Ltd - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Simpson Spence & Young - Indonesia
- Ind-Barath Power Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Indo Tambangraya Megah - Indonesia
- Deloitte Consulting - India
- Salva Resources Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Kumho Petrochemical, South Korea
- Mercator Lines Limited - India
- Meralco Power Generation, Philippines
- The State Trading Corporation of India Ltd
- Australian Coal Association
- Siam City Cement - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- Barasentosa Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Savvy Resources Ltd - HongKong
- Global Green Power PLC Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asmin Koalindo Tuhup - Indonesia
- Iligan Light & Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Ministry of Transport, Egypt
- Xindia Steels Limited - India
- Planning Commission, India
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- CIMB Investment Bank - Malaysia
- Jindal Steel & Power Ltd - India
- Heidelberg Cement - Germany
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- IEA Clean Coal Centre - UK
- Dalmia Cement Bharat India
- GMR Energy Limited - India
- Eastern Coal Council - USA
- Sojitz Corporation - Japan
- Renaissance Capital - South Africa
- Mintek Dendrill Indonesia
- Madhucon Powers Ltd - India
- Sakthi Sugars Limited - India
- Thiess Contractors Indonesia
- Sree Jayajothi Cements Limited - India
- Thai Mozambique Logistica
- CNBM International Corporation - China
- India Bulls Power Limited - India
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- Global Business Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Sidhee Cement - India
- Ministry of Finance - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indogreen Group - Indonesia
- Manunggal Multi Energi - Indonesia
- Uttam Galva Steels Limited - India
- The University of Queensland
- Metalloyd Limited - United Kingdom
- Singapore Mercantile Exchange
- Kapuas Tunggal Persada - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- Bukit Makmur.PT - Indonesia
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