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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, 15 October 13
CHINA COAL IMPORTS TO KEEP GROWING IN THE YEARS TO COME, ALBEIT AT A SLOWER RATE - EVA TZIMA / NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest monthly report, shipbroker Intermodal highlighted the growing role of coal in the energy mix. According to Intermodal's research anal ...
Tuesday, 15 October 13
NEWCASTLE PORT SHIPPED 6.50% MORE COAL W-O-W
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 6.50 per cent week on week to 3.19 million mt for ...
Monday, 14 October 13
MEMR OF INDONESIA SETS THE COAL'S SPOT PRICE AT US$ 76.61 FOR OCT'13 DELIVERY
COALspot. com - The Indonesian government has revised down government declared coal bench mark price by US$ 0.28/ MT to US$ 76.61 for October 2013 d ...
Monday, 14 October 13
CARBON POLICIES UNLIKELY TO PREVENT A COAL-FUELLED WORLD - WOOD MACKENZIE
China will propel coal growth but US, Europe and Asia will sustain global demand.
At the World Energy Congress (WEC) today Wood Mackenzie's Pres ...
Sunday, 13 October 13
Q4'13 DELIVERY SUB-BIT INDO COAL SWAP FALLS SEVEN STRAIGHT WEEK
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery fell 1.72 percept month on month on Friday 11 October 201 ...
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- IHS Mccloskey Coal Group - USA
- Orica Australia Pty. Ltd.
- Electricity Authority, New Zealand
- Ambuja Cements Ltd - India
- Attock Cement Pakistan Limited
- European Bulk Services B.V. - Netherlands
- Ministry of Finance - Indonesia
- India Bulls Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karaikal Port Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Cement Manufacturers Association - India
- LBH Netherlands Bv - Netherlands
- Semirara Mining Corp, Philippines
- Savvy Resources Ltd - HongKong
- Kohat Cement Company Ltd. - Pakistan
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- Bayan Resources Tbk. - Indonesia
- Coalindo Energy - Indonesia
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- Merrill Lynch Commodities Europe
- Anglo American - United Kingdom
- Kaltim Prima Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Baramulti Group, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ceylon Electricity Board - Sri Lanka
- OPG Power Generation Pvt Ltd - India
- Meralco Power Generation, Philippines
- CIMB Investment Bank - Malaysia
- Central Java Power - Indonesia
- PTC India Limited - India
- Jaiprakash Power Ventures ltd
- Rio Tinto Coal - Australia
- Thiess Contractors Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PNOC Exploration Corporation - Philippines
- Singapore Mercantile Exchange
- International Coal Ventures Pvt Ltd - India
- Indogreen Group - Indonesia
- Bhatia International Limited - India
- Manunggal Multi Energi - Indonesia
- Parliament of New Zealand
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- Siam City Cement - Thailand
- Binh Thuan Hamico - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Oldendorff Carriers - Singapore
- Semirara Mining and Power Corporation, Philippines
- Thai Mozambique Logistica
- Neyveli Lignite Corporation Ltd, - India
- Kapuas Tunggal Persada - Indonesia
- SMC Global Power, Philippines
- Grasim Industreis Ltd - India
- Central Electricity Authority - India
- Orica Mining Services - Indonesia
- Energy Development Corp, Philippines
- Coastal Gujarat Power Limited - India
- Port Waratah Coal Services - Australia
- Goldman Sachs - Singapore
- Global Green Power PLC Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Indonesian Coal Mining Association
- Cigading International Bulk Terminal - Indonesia
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- Malabar Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Carbofer General Trading SA - India
- Indian Oil Corporation Limited
- Therma Luzon, Inc, Philippines
- Mjunction Services Limited - India
- Global Business Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Dalmia Cement Bharat India
- The University of Queensland
- Karbindo Abesyapradhi - Indoneisa
- VISA Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Uttam Galva Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Metalloyd Limited - United Kingdom
- Sindya Power Generating Company Private Ltd
- Pendopo Energi Batubara - Indonesia
- Formosa Plastics Group - Taiwan
- Sojitz Corporation - Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- Independent Power Producers Association of India
- Barasentosa Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Interocean Group of Companies - India
- The State Trading Corporation of India Ltd
- IEA Clean Coal Centre - UK
- Kepco SPC Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Salva Resources Pvt Ltd - India
- ASAPP Information Group - India
- Directorate Of Revenue Intelligence - India
- SN Aboitiz Power Inc, Philippines
- Mercator Lines Limited - India
- Posco Energy - South Korea
- Agrawal Coal Company - India
- Georgia Ports Authority, United States
- Planning Commission, India
- Electricity Generating Authority of Thailand
- Indika Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Bulk Trading Sa - Switzerland
- Madhucon Powers Ltd - India
- Larsen & Toubro Limited - India
- GVK Power & Infra Limited - India
- Heidelberg Cement - Germany
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- Parry Sugars Refinery, India
- Ind-Barath Power Infra Limited - India
- Romanian Commodities Exchange
- Energy Link Ltd, New Zealand
- Wilmar Investment Holdings
- Medco Energi Mining Internasional
- Coal and Oil Company - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- Holcim Trading Pte Ltd - Singapore
- London Commodity Brokers - England
- White Energy Company Limited
- Alfred C Toepfer International GmbH - Germany
- Krishnapatnam Port Company Ltd. - India
- ICICI Bank Limited - India
- Videocon Industries ltd - India
- Kideco Jaya Agung - Indonesia
- Iligan Light & Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Star Paper Mills Limited - India
- Latin American Coal - Colombia
- Straits Asia Resources Limited - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Banpu Public Company Limited - Thailand
- Sarangani Energy Corporation, Philippines
- Mercuria Energy - Indonesia
- Trasteel International SA, Italy
- Power Finance Corporation Ltd., India
- Kumho Petrochemical, South Korea
- Australian Coal Association
- Edison Trading Spa - Italy
- Timah Investasi Mineral - Indoneisa
- CNBM International Corporation - China
- Vijayanagar Sugar Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Indian Energy Exchange, India
- Kalimantan Lumbung Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Borneo Indobara - Indonesia
- Economic Council, Georgia
- Chettinad Cement Corporation Ltd - India
- Bhushan Steel Limited - India
- Marubeni Corporation - India
- The Treasury - Australian Government
- Kartika Selabumi Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Riau Bara Harum - Indonesia
- Bukit Baiduri Energy - Indonesia
- Petron Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Wood Mackenzie - Singapore
- SMG Consultants - Indonesia
- PowerSource Philippines DevCo
- Siam City Cement PLC, Thailand
- Samtan Co., Ltd - South Korea
- Sree Jayajothi Cements Limited - India
- Indo Tambangraya Megah - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Minerals Council of Australia
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- Africa Commodities Group - South Africa
- New Zealand Coal & Carbon
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kobexindo Tractors - Indoneisa
- Tamil Nadu electricity Board
- GMR Energy Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Chamber of Mines of South Africa
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Deloitte Consulting - India
- Lanco Infratech Ltd - India
- Altura Mining Limited, Indonesia
- Gujarat Sidhee Cement - India
- Australian Commodity Traders Exchange
- Aditya Birla Group - India
- Vizag Seaport Private Limited - India
- Vedanta Resources Plc - India
- Gujarat Electricity Regulatory Commission - India
- MS Steel International - UAE
- Toyota Tsusho Corporation, Japan
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