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