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