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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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Monday, 22 July 13
INDO COAL SWAP FOR AUGUST 13 DELIVERY GAINED ON WEEK BUT LOST ON DAY AND MONTH
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average August 2013 delivery slightly up on week but fell on day and month on Fri ...
Friday, 19 July 13
U.S.COAL PRODUCTION TOTALED APPROXIMATELY 19.60 MMST WEEK ENDED JULY 13
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 19.60 million short tons (mmst) of ...
Friday, 19 July 13
TNPL IS LOOKING FOR 300 K MT OF 6000 GAD COAL FOR FIVE MONTH
COALspot.com - Tamil Nadu Newsprint & Papers Ltd. , an Indian paper maker, is seeking 300,000 metric tons ± 5% (In 5 shipments about 60,0 ...
Thursday, 18 July 13
3RD ANNUAL FLOATING TERMINALS, INDONESIA
Commercial applications for offshore transshipment facilities
Floating Terminal solutions are increasingly being deployed by miners, independent ...
Thursday, 18 July 13
THE CAPE MARKET APPEARS TO BE HOLDING FIRM - FEARNLEYS AS
Handy
In the Pacific, market maintained similar levels during the week. There is several Indo coal orders in the market, ships passing Singapore fi ...
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- Sarangani Energy Corporation, Philippines
- Power Finance Corporation Ltd., India
- Asmin Koalindo Tuhup - Indonesia
- Indonesian Coal Mining Association
- Planning Commission, India
- Global Coal Blending Company Limited - Australia
- Romanian Commodities Exchange
- Indogreen Group - Indonesia
- The State Trading Corporation of India Ltd
- Eastern Energy - Thailand
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Ambuja Cements Ltd - India
- Thai Mozambique Logistica
- Siam City Cement - Thailand
- The Treasury - Australian Government
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- Petron Corporation, Philippines
- Bangladesh Power Developement Board
- Gujarat Mineral Development Corp Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Indian Energy Exchange, India
- Bhoruka Overseas - Indonesia
- Rio Tinto Coal - Australia
- Goldman Sachs - Singapore
- TeaM Sual Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- GAC Shipping (India) Pvt Ltd
- Commonwealth Bank - Australia
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Posco Energy - South Korea
- Central Electricity Authority - India
- Sojitz Corporation - Japan
- Neyveli Lignite Corporation Ltd, - India
- Kepco SPC Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Antam Resourcindo - Indonesia
- Baramulti Group, Indonesia
- Bharathi Cement Corporation - India
- Bukit Baiduri Energy - Indonesia
- SMC Global Power, Philippines
- Billiton Holdings Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ICICI Bank Limited - India
- San Jose City I Power Corp, Philippines
- White Energy Company Limited
- Bulk Trading Sa - Switzerland
- Pendopo Energi Batubara - Indonesia
- Iligan Light & Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Xindia Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- India Bulls Power Limited - India
- VISA Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kaltim Prima Coal - Indonesia
- Anglo American - United Kingdom
- Australian Coal Association
- Kohat Cement Company Ltd. - Pakistan
- New Zealand Coal & Carbon
- Leighton Contractors Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Cigading International Bulk Terminal - Indonesia
- Larsen & Toubro Limited - India
- Aditya Birla Group - India
- McConnell Dowell - Australia
- International Coal Ventures Pvt Ltd - India
- Electricity Generating Authority of Thailand
- AsiaOL BioFuels Corp., Philippines
- Gujarat Sidhee Cement - India
- Cement Manufacturers Association - India
- Savvy Resources Ltd - HongKong
- Jaiprakash Power Ventures ltd
- GMR Energy Limited - India
- Price Waterhouse Coopers - Russia
- The University of Queensland
- Deloitte Consulting - India
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Chamber of Mines of South Africa
- Attock Cement Pakistan Limited
- TNB Fuel Sdn Bhd - Malaysia
- Formosa Plastics Group - Taiwan
- Ministry of Transport, Egypt
- Standard Chartered Bank - UAE
- Agrawal Coal Company - India
- Videocon Industries ltd - India
- Coastal Gujarat Power Limited - India
- Kumho Petrochemical, South Korea
- Kideco Jaya Agung - Indonesia
- Minerals Council of Australia
- Karaikal Port Pvt Ltd - India
- Star Paper Mills Limited - India
- Salva Resources Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mjunction Services Limited - India
- Wilmar Investment Holdings
- Essar Steel Hazira Ltd - India
- European Bulk Services B.V. - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- OPG Power Generation Pvt Ltd - India
- Economic Council, Georgia
- IHS Mccloskey Coal Group - USA
- Madhucon Powers Ltd - India
- Jindal Steel & Power Ltd - India
- SMG Consultants - Indonesia
- Parry Sugars Refinery, India
- Parliament of New Zealand
- London Commodity Brokers - England
- Heidelberg Cement - Germany
- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- Samtan Co., Ltd - South Korea
- Manunggal Multi Energi - Indonesia
- Merrill Lynch Commodities Europe
- Edison Trading Spa - Italy
- Carbofer General Trading SA - India
- Kalimantan Lumbung Energi - Indonesia
- Electricity Authority, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Trasteel International SA, Italy
- Port Waratah Coal Services - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Georgia Ports Authority, United States
- Lanco Infratech Ltd - India
- Ministry of Mines - Canada
- Oldendorff Carriers - Singapore
- Tata Chemicals Ltd - India
- LBH Netherlands Bv - Netherlands
- Indian Oil Corporation Limited
- Coalindo Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Latin American Coal - Colombia
- Africa Commodities Group - South Africa
- Energy Development Corp, Philippines
- Renaissance Capital - South Africa
- Krishnapatnam Port Company Ltd. - India
- Borneo Indobara - Indonesia
- PowerSource Philippines DevCo
- Grasim Industreis Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Bhushan Steel Limited - India
- Ceylon Electricity Board - Sri Lanka
- Global Business Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Marubeni Corporation - India
- Makarim & Taira - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- MS Steel International - UAE
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Metalloyd Limited - United Kingdom
- Malabar Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Central Java Power - Indonesia
- South Luzon Thermal Energy Corporation
- Meenaskhi Energy Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Uttam Galva Steels Limited - India
- Siam City Cement PLC, Thailand
- Ministry of Finance - Indonesia
- Dalmia Cement Bharat India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Simpson Spence & Young - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sical Logistics Limited - India
- Binh Thuan Hamico - Vietnam
- Singapore Mercantile Exchange
- Kobexindo Tractors - Indoneisa
- Therma Luzon, Inc, Philippines
- Thiess Contractors Indonesia
- Holcim Trading Pte Ltd - Singapore
- Wood Mackenzie - Singapore
- CIMB Investment Bank - Malaysia
- Indika Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sindya Power Generating Company Private Ltd
- Australian Commodity Traders Exchange
- Barasentosa Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Mercuria Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Tamil Nadu electricity Board
- Eastern Coal Council - USA
- Intertek Mineral Services - Indonesia
- Orica Mining Services - Indonesia
- Independent Power Producers Association of India
- Kartika Selabumi Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Sakthi Sugars Limited - India
- ASAPP Information Group - India
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- Directorate Of Revenue Intelligence - India
- Medco Energi Mining Internasional
- Mercator Lines Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- PTC India Limited - India
- Sree Jayajothi Cements Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maheswari Brothers Coal Limited - India
- Timah Investasi Mineral - Indoneisa
- Interocean Group of Companies - India
- Straits Asia Resources Limited - Singapore
- Vizag Seaport Private Limited - India
- Energy Link Ltd, New Zealand
- GVK Power & Infra Limited - India
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