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