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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, 13 August 13
AUSTRALIA NEWCASTLE COAL EXPORTS JUMP 30.61 PERCENT ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 30.61 per cent week on week to 2.95 million mt for ...
Monday, 12 August 13
GBCE SUCCESSFUL IN UPGRADING LOW RANK INDONESIAN COAL ON INDUSTRIAL SCALE
COALspot.com : GB Clean Energy Ltd. (GBCE) has annoused that, the company has successfully upgraded 2,426 tonnes of low rank 4,018 kcal NAR Ind ...
Monday, 12 August 13
INDIA - SAFE SHIPMENT OF IRON ORE FINES FROM INDIAN PORTS - WEST OF ENGLAND P&I CLUB
As Members may be aware, in 2009 two ships, the ‘Asian Forest’ and the ‘Black Rose’, capsized and sank following the liquefa ...
Sunday, 11 August 13
INDONESIAN COAL SWAPS : FLAT ON DAY
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average Q4 2013 delivery flat on day due to holidays in Indonesia, Malaysia & ...
Sunday, 11 August 13
SUPRAMAX FREIGHT RATES FROM INDONESIA TO INDIA CONTINUED TO BE SOFT - VISTAAR
COALspot.com : The freight market was soft this week with all indices down , the reason could be long weekend holidays in Indonesia, Singapore and M ...
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- Intertek Mineral Services - Indonesia
- Semirara Mining Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Bharathi Cement Corporation - India
- Heidelberg Cement - Germany
- Maheswari Brothers Coal Limited - India
- Malabar Cements Ltd - India
- Madhucon Powers Ltd - India
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- Riau Bara Harum - Indonesia
- GAC Shipping (India) Pvt Ltd
- Australian Coal Association
- Toyota Tsusho Corporation, Japan
- Directorate Of Revenue Intelligence - India
- Edison Trading Spa - Italy
- Bhoruka Overseas - Indonesia
- Mintek Dendrill Indonesia
- Global Coal Blending Company Limited - Australia
- Metalloyd Limited - United Kingdom
- Banpu Public Company Limited - Thailand
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- Chamber of Mines of South Africa
- Renaissance Capital - South Africa
- Mercator Lines Limited - India
- Romanian Commodities Exchange
- Indian Oil Corporation Limited
- Energy Development Corp, Philippines
- Jaiprakash Power Ventures ltd
- Vijayanagar Sugar Pvt Ltd - India
- Lanco Infratech Ltd - India
- Aditya Birla Group - India
- Thiess Contractors Indonesia
- Therma Luzon, Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Parliament of New Zealand
- PNOC Exploration Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Australian Commodity Traders Exchange
- Siam City Cement PLC, Thailand
- Kaltim Prima Coal - Indonesia
- Vedanta Resources Plc - India
- Wood Mackenzie - Singapore
- Bhatia International Limited - India
- Electricity Generating Authority of Thailand
- Goldman Sachs - Singapore
- Larsen & Toubro Limited - India
- Standard Chartered Bank - UAE
- Mercuria Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Semirara Mining and Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Orica Mining Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Interocean Group of Companies - India
- Marubeni Corporation - India
- London Commodity Brokers - England
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Price Waterhouse Coopers - Russia
- TNB Fuel Sdn Bhd - Malaysia
- IHS Mccloskey Coal Group - USA
- Tamil Nadu electricity Board
- Ind-Barath Power Infra Limited - India
- Eastern Energy - Thailand
- Independent Power Producers Association of India
- New Zealand Coal & Carbon
- Bulk Trading Sa - Switzerland
- Global Green Power PLC Corporation, Philippines
- SMG Consultants - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Formosa Plastics Group - Taiwan
- Jindal Steel & Power Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- San Jose City I Power Corp, Philippines
- Power Finance Corporation Ltd., India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement - Thailand
- Simpson Spence & Young - Indonesia
- Pendopo Energi Batubara - Indonesia
- GVK Power & Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Parry Sugars Refinery, India
- White Energy Company Limited
- Kideco Jaya Agung - Indonesia
- Sojitz Corporation - Japan
- Commonwealth Bank - Australia
- Anglo American - United Kingdom
- Ministry of Finance - Indonesia
- TeaM Sual Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Xindia Steels Limited - India
- Coalindo Energy - Indonesia
- ASAPP Information Group - India
- Singapore Mercantile Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Indika Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Dalmia Cement Bharat India
- CIMB Investment Bank - Malaysia
- The State Trading Corporation of India Ltd
- Samtan Co., Ltd - South Korea
- Manunggal Multi Energi - Indonesia
- VISA Power Limited - India
- Eastern Coal Council - USA
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- Economic Council, Georgia
- Indian Energy Exchange, India
- Kumho Petrochemical, South Korea
- European Bulk Services B.V. - Netherlands
- Aboitiz Power Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Deloitte Consulting - India
- Latin American Coal - Colombia
- Wilmar Investment Holdings
- Binh Thuan Hamico - Vietnam
- Gujarat Sidhee Cement - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PTC India Limited - India
- SN Aboitiz Power Inc, Philippines
- Videocon Industries ltd - India
- MS Steel International - UAE
- Krishnapatnam Port Company Ltd. - India
- Central Java Power - Indonesia
- Electricity Authority, New Zealand
- Energy Link Ltd, New Zealand
- International Coal Ventures Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Coal and Oil Company - UAE
- Karbindo Abesyapradhi - Indoneisa
- India Bulls Power Limited - India
- Meralco Power Generation, Philippines
- Oldendorff Carriers - Singapore
- Karaikal Port Pvt Ltd - India
- Attock Cement Pakistan Limited
- Cement Manufacturers Association - India
- Baramulti Group, Indonesia
- PowerSource Philippines DevCo
- Ambuja Cements Ltd - India
- Global Business Power Corporation, Philippines
- ICICI Bank Limited - India
- Thai Mozambique Logistica
- LBH Netherlands Bv - Netherlands
- Straits Asia Resources Limited - Singapore
- Salva Resources Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Bangladesh Power Developement Board
- Sakthi Sugars Limited - India
- Essar Steel Hazira Ltd - India
- Chettinad Cement Corporation Ltd - India
- South Luzon Thermal Energy Corporation
- Kohat Cement Company Ltd. - Pakistan
- Vizag Seaport Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- The University of Queensland
- Borneo Indobara - Indonesia
- Bhushan Steel Limited - India
- Grasim Industreis Ltd - India
- IEA Clean Coal Centre - UK
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Mines - Canada
- McConnell Dowell - Australia
- Medco Energi Mining Internasional
- Uttam Galva Steels Limited - India
- Makarim & Taira - Indonesia
- Agrawal Coal Company - India
- The Treasury - Australian Government
- Planning Commission, India
- GMR Energy Limited - India
- Sarangani Energy Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Ministry of Transport, Egypt
- Rio Tinto Coal - Australia
- Merrill Lynch Commodities Europe
- Rashtriya Ispat Nigam Limited - India
- Georgia Ports Authority, United States
- Jorong Barutama Greston.PT - Indonesia
- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- Minerals Council of Australia
- Star Paper Mills Limited - India
- AsiaOL BioFuels Corp., Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Australia Pty. Ltd.
- Coastal Gujarat Power Limited - India
- Tata Chemicals Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sical Logistics Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bukit Baiduri Energy - Indonesia
- Mjunction Services Limited - India
- Indonesian Coal Mining Association
- SMC Global Power, Philippines
- Meenaskhi Energy Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Indogreen Group - Indonesia
- Port Waratah Coal Services - Australia
- Iligan Light & Power Inc, Philippines
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