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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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Wednesday, 12 June 13
INDONESIAN COAL PRICE REFERENCE SLIDES TO 2013 LOW
COALspot.com - Indonesian Coal Price Reference continues to take its lumps this month, dropping about 0.54 % and hitting a 2013 low. The Indonesian ...
Tuesday, 11 June 13
COAL: NO SIGN OF RECOVERY - GABRIELLA
COALspot.com: We attended the 19th Annual Coaltrans Asia Conference, where we found most of the speakers were not very optimistic on the outlook for ...
Tuesday, 11 June 13
NEWCASTLE PORT SHIPPED MORE COAL WEEK ENDED 11 JUNE 2013
COALspot.com - Newcastle port in Australia has loaded 3,104,509 tons of coal for the week ended 0700 hours 11 June 2013, Newcastle Port Corp. ...
Tuesday, 11 June 13
OUTLOOK FOR CAPESIZES LOOKS GRIM, DESPITE FALLING IRON ORE PRICES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Things aren't looking all that rosy for the dry bulk market, despite a stronger volume of iron ore imports during the months of March and April, as ...
Sunday, 09 June 13
CFR SOUTH CHINA COAL SWAP IS UNDER PRESSURE
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average July 2013 delivery have lost 0.03 percent week on week but gained 0.07 pe ...
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- Miang Besar Coal Terminal - Indonesia
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- Kideco Jaya Agung - Indonesia
- Straits Asia Resources Limited - Singapore
- Coastal Gujarat Power Limited - India
- Edison Trading Spa - Italy
- Siam City Cement - Thailand
- Chamber of Mines of South Africa
- Semirara Mining and Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- SMG Consultants - Indonesia
- South Luzon Thermal Energy Corporation
- Orica Australia Pty. Ltd.
- Carbofer General Trading SA - India
- Australian Commodity Traders Exchange
- Riau Bara Harum - Indonesia
- Chettinad Cement Corporation Ltd - India
- The University of Queensland
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- Kepco SPC Power Corporation, Philippines
- India Bulls Power Limited - India
- Cement Manufacturers Association - India
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- Global Business Power Corporation, Philippines
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- Videocon Industries ltd - India
- Meralco Power Generation, Philippines
- International Coal Ventures Pvt Ltd - India
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- Bahari Cakrawala Sebuku - Indonesia
- Sarangani Energy Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
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- Jaiprakash Power Ventures ltd
- Kumho Petrochemical, South Korea
- Gujarat Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Parliament of New Zealand
- Bangladesh Power Developement Board
- GAC Shipping (India) Pvt Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- New Zealand Coal & Carbon
- Kalimantan Lumbung Energi - Indonesia
- Bulk Trading Sa - Switzerland
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Transport, Egypt
- The State Trading Corporation of India Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asmin Koalindo Tuhup - Indonesia
- Romanian Commodities Exchange
- Savvy Resources Ltd - HongKong
- Jorong Barutama Greston.PT - Indonesia
- Interocean Group of Companies - India
- Commonwealth Bank - Australia
- Bukit Makmur.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Madhucon Powers Ltd - India
- Mercator Lines Limited - India
- Wood Mackenzie - Singapore
- ICICI Bank Limited - India
- Kartika Selabumi Mining - Indonesia
- Independent Power Producers Association of India
- Sical Logistics Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- Lanco Infratech Ltd - India
- MS Steel International - UAE
- London Commodity Brokers - England
- Siam City Cement PLC, Thailand
- Altura Mining Limited, Indonesia
- Semirara Mining Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- Indian Energy Exchange, India
- Trasteel International SA, Italy
- Bhatia International Limited - India
- Orica Mining Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- GVK Power & Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- Timah Investasi Mineral - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Samtan Co., Ltd - South Korea
- PNOC Exploration Corporation - Philippines
- Minerals Council of Australia
- Cigading International Bulk Terminal - Indonesia
- Medco Energi Mining Internasional
- Binh Thuan Hamico - Vietnam
- Bhushan Steel Limited - India
- Globalindo Alam Lestari - Indonesia
- Barasentosa Lestari - Indonesia
- SMC Global Power, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Malabar Cements Ltd - India
- Power Finance Corporation Ltd., India
- TeaM Sual Corporation - Philippines
- Mintek Dendrill Indonesia
- Metalloyd Limited - United Kingdom
- Latin American Coal - Colombia
- CNBM International Corporation - China
- PetroVietnam Power Coal Import and Supply Company
- Eastern Energy - Thailand
- Posco Energy - South Korea
- Global Green Power PLC Corporation, Philippines
- Economic Council, Georgia
- Borneo Indobara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Rashtriya Ispat Nigam Limited - India
- PTC India Limited - India
- European Bulk Services B.V. - Netherlands
- Sojitz Corporation - Japan
- McConnell Dowell - Australia
- Karbindo Abesyapradhi - Indoneisa
- Price Waterhouse Coopers - Russia
- Ministry of Finance - Indonesia
- Star Paper Mills Limited - India
- Indonesian Coal Mining Association
- Banpu Public Company Limited - Thailand
- Intertek Mineral Services - Indonesia
- Singapore Mercantile Exchange
- Africa Commodities Group - South Africa
- Simpson Spence & Young - Indonesia
- Manunggal Multi Energi - Indonesia
- Rio Tinto Coal - Australia
- Pendopo Energi Batubara - Indonesia
- Thai Mozambique Logistica
- Goldman Sachs - Singapore
- VISA Power Limited - India
- Xindia Steels Limited - India
- Indika Energy - Indonesia
- Renaissance Capital - South Africa
- San Jose City I Power Corp, Philippines
- Standard Chartered Bank - UAE
- Energy Link Ltd, New Zealand
- Bayan Resources Tbk. - Indonesia
- Sakthi Sugars Limited - India
- Central Electricity Authority - India
- Tamil Nadu electricity Board
- OPG Power Generation Pvt Ltd - India
- Anglo American - United Kingdom
- Iligan Light & Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Electricity Generating Authority of Thailand
- The Treasury - Australian Government
- Formosa Plastics Group - Taiwan
- Georgia Ports Authority, United States
- Agrawal Coal Company - India
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Vedanta Resources Plc - India
- Ambuja Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Australian Coal Association
- Holcim Trading Pte Ltd - Singapore
- Energy Development Corp, Philippines
- Oldendorff Carriers - Singapore
- LBH Netherlands Bv - Netherlands
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- Vizag Seaport Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jindal Steel & Power Ltd - India
- Aditya Birla Group - India
- Attock Cement Pakistan Limited
- Coalindo Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Gujarat Sidhee Cement - India
- Vijayanagar Sugar Pvt Ltd - India
- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- Port Waratah Coal Services - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Sindya Power Generating Company Private Ltd
- Salva Resources Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Uttam Galva Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Toyota Tsusho Corporation, Japan
- Thiess Contractors Indonesia
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Mjunction Services Limited - India
- Electricity Authority, New Zealand
- Merrill Lynch Commodities Europe
- Planning Commission, India
- Baramulti Group, Indonesia
- SN Aboitiz Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Central Java Power - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kobexindo Tractors - Indoneisa
- Kaltim Prima Coal - Indonesia
- Ministry of Mines - Canada
- Gujarat Mineral Development Corp Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- Heidelberg Cement - Germany
- Bhoruka Overseas - Indonesia
- Antam Resourcindo - Indonesia
- Larsen & Toubro Limited - India
- White Energy Company Limited
- Parry Sugars Refinery, India
- Makarim & Taira - Indonesia
- Grasim Industreis Ltd - India
- Wilmar Investment Holdings
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