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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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Thursday, 17 October 13
CHINA'S COAL IMPORTS DOWN 9.4% TO 25.96 MMT IN AUGUST
COALspot.com: China's August Imported coal volumes down 9.4% m-m but up 27% y-y, BNP said in its latest China Coal & Power report released on 1 ...
Wednesday, 16 October 13
NEW STRATEGIES AND OPPORTUNITIES IN A RAPIDLY EVOLVING COAL INDUSTRY
The 12th Annual Coal Markets assumes even more significance as the industry seeks more market information, inputs on trade strategies, supply and de ...
Wednesday, 16 October 13
CAPES: RATES DROPPED; PANAMAX: ADVANCED - INTERMODAL
After a month and a half of straight weekly positive closings, the BDI has finished the week in the red. Monday started slow as holidays in the East ...
Wednesday, 16 October 13
WILL THIS LATEST DRY BULK MARKET UPTREND PROVE TO BE AS LONG-LIVED OR JUST ANOTHER MOMENTARY SPIKE? - CHRISTOS MANZTIOS
COALspot.com: So here we are again facing the same old question: Will this latest market uptrend prove to be as long-lived as all owners hope or jus ...
Wednesday, 16 October 13
KOSEP TO IMPORT 0.49 MILLION TONS OF 4600 NAR COAL FOR JAN - FEB '14
COALspot.com - Korea South-East Power Co., a Korean generator and distributor of electricity on behalf of five Korean Gencos intends to procure 490, ...
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- Bhatia International Limited - India
- The State Trading Corporation of India Ltd
- Aboitiz Power Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coalindo Energy - Indonesia
- Renaissance Capital - South Africa
- Georgia Ports Authority, United States
- Price Waterhouse Coopers - Russia
- Port Waratah Coal Services - Australia
- Uttam Galva Steels Limited - India
- SMC Global Power, Philippines
- London Commodity Brokers - England
- Madhucon Powers Ltd - India
- PNOC Exploration Corporation - Philippines
- PTC India Limited - India
- Kartika Selabumi Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- Thai Mozambique Logistica
- Holcim Trading Pte Ltd - Singapore
- Parliament of New Zealand
- Siam City Cement PLC, Thailand
- Bukit Baiduri Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Carbofer General Trading SA - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sakthi Sugars Limited - India
- Indian Energy Exchange, India
- Videocon Industries ltd - India
- McConnell Dowell - Australia
- Heidelberg Cement - Germany
- Singapore Mercantile Exchange
- Merrill Lynch Commodities Europe
- Indika Energy - Indonesia
- Mjunction Services Limited - India
- Central Electricity Authority - India
- Vizag Seaport Private Limited - India
- Petron Corporation, Philippines
- Australian Coal Association
- Coastal Gujarat Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Marubeni Corporation - India
- Ministry of Finance - Indonesia
- Eastern Coal Council - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Commonwealth Bank - Australia
- Bangladesh Power Developement Board
- Essar Steel Hazira Ltd - India
- Bharathi Cement Corporation - India
- Chettinad Cement Corporation Ltd - India
- Coal and Oil Company - UAE
- Anglo American - United Kingdom
- Aditya Birla Group - India
- Sinarmas Energy and Mining - Indonesia
- Larsen & Toubro Limited - India
- Metalloyd Limited - United Kingdom
- Sical Logistics Limited - India
- Vedanta Resources Plc - India
- Economic Council, Georgia
- SMG Consultants - Indonesia
- Ind-Barath Power Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Bulk Trading Sa - Switzerland
- Neyveli Lignite Corporation Ltd, - India
- Intertek Mineral Services - Indonesia
- Latin American Coal - Colombia
- Tamil Nadu electricity Board
- TNB Fuel Sdn Bhd - Malaysia
- Energy Development Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Global Coal Blending Company Limited - Australia
- New Zealand Coal & Carbon
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- Maharashtra Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Directorate Of Revenue Intelligence - India
- Karaikal Port Pvt Ltd - India
- MS Steel International - UAE
- ICICI Bank Limited - India
- Edison Trading Spa - Italy
- Vijayanagar Sugar Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Bhoruka Overseas - Indonesia
- San Jose City I Power Corp, Philippines
- Riau Bara Harum - Indonesia
- Formosa Plastics Group - Taiwan
- Kapuas Tunggal Persada - Indonesia
- Parry Sugars Refinery, India
- AsiaOL BioFuels Corp., Philippines
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- Malabar Cements Ltd - India
- Romanian Commodities Exchange
- Borneo Indobara - Indonesia
- Kideco Jaya Agung - Indonesia
- SN Aboitiz Power Inc, Philippines
- Goldman Sachs - Singapore
- Oldendorff Carriers - Singapore
- TeaM Sual Corporation - Philippines
- Ambuja Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Samtan Co., Ltd - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Mining Services - Indonesia
- Independent Power Producers Association of India
- Global Green Power PLC Corporation, Philippines
- Interocean Group of Companies - India
- Deloitte Consulting - India
- Timah Investasi Mineral - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Wilmar Investment Holdings
- Globalindo Alam Lestari - Indonesia
- Posco Energy - South Korea
- GN Power Mariveles Coal Plant, Philippines
- IHS Mccloskey Coal Group - USA
- Leighton Contractors Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Mines - Canada
- Electricity Generating Authority of Thailand
- Kobexindo Tractors - Indoneisa
- Siam City Cement - Thailand
- Alfred C Toepfer International GmbH - Germany
- Rashtriya Ispat Nigam Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asmin Koalindo Tuhup - Indonesia
- Grasim Industreis Ltd - India
- Gujarat Sidhee Cement - India
- Semirara Mining Corp, Philippines
- Planning Commission, India
- Agrawal Coal Company - India
- Simpson Spence & Young - Indonesia
- Baramulti Group, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Global Business Power Corporation, Philippines
- The University of Queensland
- Toyota Tsusho Corporation, Japan
- Kalimantan Lumbung Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Cement Manufacturers Association - India
- European Bulk Services B.V. - Netherlands
- Orica Australia Pty. Ltd.
- Energy Link Ltd, New Zealand
- Electricity Authority, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The Treasury - Australian Government
- Gujarat Mineral Development Corp Ltd - India
- Indian Oil Corporation Limited
- Iligan Light & Power Inc, Philippines
- Kumho Petrochemical, South Korea
- Thiess Contractors Indonesia
- Indo Tambangraya Megah - Indonesia
- ASAPP Information Group - India
- Cigading International Bulk Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Altura Mining Limited, Indonesia
- Central Java Power - Indonesia
- Maheswari Brothers Coal Limited - India
- Mintek Dendrill Indonesia
- Minerals Council of Australia
- CNBM International Corporation - China
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Makmur.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Eastern Energy - Thailand
- South Luzon Thermal Energy Corporation
- OPG Power Generation Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Xindia Steels Limited - India
- India Bulls Power Limited - India
- Lanco Infratech Ltd - India
- Indonesian Coal Mining Association
- Antam Resourcindo - Indonesia
- Rio Tinto Coal - Australia
- Indogreen Group - Indonesia
- PowerSource Philippines DevCo
- Ceylon Electricity Board - Sri Lanka
- Binh Thuan Hamico - Vietnam
- Kaltim Prima Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Bhushan Steel Limited - India
- Pendopo Energi Batubara - Indonesia
- White Energy Company Limited
- Africa Commodities Group - South Africa
- Chamber of Mines of South Africa
- Australian Commodity Traders Exchange
- Trasteel International SA, Italy
- Ministry of Transport, Egypt
- IEA Clean Coal Centre - UK
- Medco Energi Mining Internasional
- Billiton Holdings Pty Ltd - Australia
- VISA Power Limited - India
- Standard Chartered Bank - UAE
- Wood Mackenzie - Singapore
- Attock Cement Pakistan Limited
- CIMB Investment Bank - Malaysia
- Mercator Lines Limited - India
- Star Paper Mills Limited - India
- Sree Jayajothi Cements Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- Therma Luzon, Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- GVK Power & Infra Limited - India
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