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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, 09 July 13
NEWCASTLE COAL EXPORTS JUMP 27.53% ON WEEK TO 2.97 MILLION MT
COALspot.com - Newcastle Coal exports up 27.53% to 2.97 million tons W-o-W.
Newcastle port in Australia has loaded 2,974,715 tons of coal for the ...
Tuesday, 09 July 13
CAPESIZE: SHOT UP; PANAMAXES: NOT SO LUCK; SUPRAS: SLIGHTLY BETTER; HANDIES: SOFT - INTERMODAL
COALspot.com : June 2013 Recap
A renewed Capesize market this month (June 2013) was the cause for much of the overall noteworthy performanc ...
Tuesday, 09 July 13
THE 11TH DEEP COAL PROCESSING FORUM 2013
Press Release : The 11th Deep Coal Processing Forum 2013 will be held in November Beijing China.
CDMC Events is pleased to announce that 11 ...
Monday, 08 July 13
ECO-FRIENDLY COAL FOR CHINA - VALUE FOR THE ENVIRONMENT AND VALUE FOR THE POWER GENERATOR - BY: LINDSAY JUNIPER
COALspot.com : January 2013 saw an episode of extreme particulate pollution in Beijing 35 times worse than the safe level recommended by the World H ...
Sunday, 07 July 13
FREIGHT MARKET IS EXPECTED TO BE SOFT TO STABLE NEXT WEEK- VISTAAR
COALspot.com - The freight market softened for the week ended 5 July 2013, and experienced a decline in all sectors, including BDI. Bulk dry Index d ...
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- Aboitiz Power Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Sical Logistics Limited - India
- Leighton Contractors Pty Ltd - Australia
- Edison Trading Spa - Italy
- Semirara Mining and Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- PowerSource Philippines DevCo
- Offshore Bulk Terminal Pte Ltd, Singapore
- Borneo Indobara - Indonesia
- Central Electricity Authority - India
- Grasim Industreis Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- CNBM International Corporation - China
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement - Thailand
- IHS Mccloskey Coal Group - USA
- Bhushan Steel Limited - India
- Sojitz Corporation - Japan
- Savvy Resources Ltd - HongKong
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Australian Coal Association
- Trasteel International SA, Italy
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Semirara Mining Corp, Philippines
- Sindya Power Generating Company Private Ltd
- New Zealand Coal & Carbon
- Lanco Infratech Ltd - India
- Videocon Industries ltd - India
- Coastal Gujarat Power Limited - India
- VISA Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Renaissance Capital - South Africa
- Riau Bara Harum - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Indian Oil Corporation Limited
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Australian Commodity Traders Exchange
- Ministry of Finance - Indonesia
- Altura Mining Limited, Indonesia
- Coal and Oil Company - UAE
- Kaltim Prima Coal - Indonesia
- Attock Cement Pakistan Limited
- Thiess Contractors Indonesia
- Deloitte Consulting - India
- Gujarat Sidhee Cement - India
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- The University of Queensland
- AsiaOL BioFuels Corp., Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- Agrawal Coal Company - India
- Kartika Selabumi Mining - Indonesia
- Orica Australia Pty. Ltd.
- Banpu Public Company Limited - Thailand
- Tamil Nadu electricity Board
- Bhoruka Overseas - Indonesia
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Bangladesh Power Developement Board
- Mintek Dendrill Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Malabar Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- Marubeni Corporation - India
- Vizag Seaport Private Limited - India
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Latin American Coal - Colombia
- Barasentosa Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Timah Investasi Mineral - Indoneisa
- Metalloyd Limited - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
- Mercuria Energy - Indonesia
- Planning Commission, India
- Rio Tinto Coal - Australia
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
- San Jose City I Power Corp, Philippines
- Bulk Trading Sa - Switzerland
- Chamber of Mines of South Africa
- Global Business Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- Parliament of New Zealand
- Jindal Steel & Power Ltd - India
- Power Finance Corporation Ltd., India
- Bhatia International Limited - India
- TeaM Sual Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Generating Authority of Thailand
- Price Waterhouse Coopers - Russia
- Xindia Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Wilmar Investment Holdings
- OPG Power Generation Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Independent Power Producers Association of India
- South Luzon Thermal Energy Corporation
- GVK Power & Infra Limited - India
- Bukit Makmur.PT - Indonesia
- The Treasury - Australian Government
- Energy Development Corp, Philippines
- Heidelberg Cement - Germany
- GAC Shipping (India) Pvt Ltd
- Pendopo Energi Batubara - Indonesia
- ICICI Bank Limited - India
- PTC India Limited - India
- Medco Energi Mining Internasional
- IEA Clean Coal Centre - UK
- Maheswari Brothers Coal Limited - India
- Binh Thuan Hamico - Vietnam
- Port Waratah Coal Services - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Therma Luzon, Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- Dalmia Cement Bharat India
- LBH Netherlands Bv - Netherlands
- Kumho Petrochemical, South Korea
- Aditya Birla Group - India
- Sarangani Energy Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Uttam Galva Steels Limited - India
- Wood Mackenzie - Singapore
- Straits Asia Resources Limited - Singapore
- Bharathi Cement Corporation - India
- ASAPP Information Group - India
- Kepco SPC Power Corporation, Philippines
- Indogreen Group - Indonesia
- Simpson Spence & Young - Indonesia
- White Energy Company Limited
- Bukit Baiduri Energy - Indonesia
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- European Bulk Services B.V. - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Posco Energy - South Korea
- Goldman Sachs - Singapore
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Larsen & Toubro Limited - India
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Star Paper Mills Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Baramulti Group, Indonesia
- Vedanta Resources Plc - India
- Parry Sugars Refinery, India
- Ambuja Cements Ltd - India
- SMG Consultants - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Georgia Ports Authority, United States
- Africa Commodities Group - South Africa
- Indonesian Coal Mining Association
- Jaiprakash Power Ventures ltd
- Mjunction Services Limited - India
- Holcim Trading Pte Ltd - Singapore
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Bank of Tokyo Mitsubishi UFJ Ltd
- CIMB Investment Bank - Malaysia
- International Coal Ventures Pvt Ltd - India
- London Commodity Brokers - England
- Indika Energy - Indonesia
- Minerals Council of Australia
- Indian Energy Exchange, India
- PNOC Exploration Corporation - Philippines
- Ministry of Transport, Egypt
- The State Trading Corporation of India Ltd
- Eastern Coal Council - USA
- Kohat Cement Company Ltd. - Pakistan
- GMR Energy Limited - India
- Merrill Lynch Commodities Europe
- Cement Manufacturers Association - India
- Directorate Of Revenue Intelligence - India
- Siam City Cement PLC, Thailand
- Carbofer General Trading SA - India
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