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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, 11 March 13
SUB-BIT FOB INDONESIA COAL SWAPS FELL 1.41 PERCENT W-W
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q2’ 2013 delivery has lost 1.41percent and CFR South China coal shipment ...
Sunday, 10 March 13
INDIA - INDONESIA SUPRAMAX FREIGHT : FIRM TREND
COALspot.com – This week freight market was raised and remained firm in all segments.
The BDI was up by 6.70 pct closed at 843 points, ...
Sunday, 10 March 13
INDONESIA'S FORESTRY DEPARTMENT IS TO INCREASE BORROW-TO-USE PERMITS (IJIN PINJAM PAKAI) FEE SOON
COALspot.com : Indonesia to increase borrows-to-use permit fees by 33.33 percent. The government of Indonesia is planning to increase the state&rsqu ...
Friday, 08 March 13
EKO SANTOSO BUDIANTO APPOINTED AS PRESDIENT DIRECTOR OF BERAU COAL ENERGY
COALspot.com - PT Berau Coal Energy has appointed Eko Santoso Budianto as new president director, replacing Rosan Roeslani. Berau’s extraordin ...
Friday, 08 March 13
INDONESIAN HBA UP FOR FIVE CONSECUTIVE MONTHS
COALspot.com - The Indonesian government has declared bench mark price for coal has moved upwards in March 2013.
The monthly coal reference ...
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- Metalloyd Limited - United Kingdom
- Meralco Power Generation, Philippines
- Trasteel International SA, Italy
- Bayan Resources Tbk. - Indonesia
- Manunggal Multi Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bhoruka Overseas - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Mercuria Energy - Indonesia
- Star Paper Mills Limited - India
- Chamber of Mines of South Africa
- ICICI Bank Limited - India
- Kaltim Prima Coal - Indonesia
- TeaM Sual Corporation - Philippines
- Central Java Power - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Wilmar Investment Holdings
- Power Finance Corporation Ltd., India
- Bukit Baiduri Energy - Indonesia
- Grasim Industreis Ltd - India
- IEA Clean Coal Centre - UK
- Mjunction Services Limited - India
- Mercator Lines Limited - India
- Directorate Of Revenue Intelligence - India
- Australian Commodity Traders Exchange
- White Energy Company Limited
- Timah Investasi Mineral - Indoneisa
- The Treasury - Australian Government
- PNOC Exploration Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- GMR Energy Limited - India
- Eastern Energy - Thailand
- San Jose City I Power Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Global Business Power Corporation, Philippines
- Romanian Commodities Exchange
- Heidelberg Cement - Germany
- Commonwealth Bank - Australia
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- Latin American Coal - Colombia
- Cement Manufacturers Association - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sree Jayajothi Cements Limited - India
- GVK Power & Infra Limited - India
- Parry Sugars Refinery, India
- PetroVietnam Power Coal Import and Supply Company
- Rio Tinto Coal - Australia
- Therma Luzon, Inc, Philippines
- Sakthi Sugars Limited - India
- Riau Bara Harum - Indonesia
- Iligan Light & Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- SMG Consultants - Indonesia
- GAC Shipping (India) Pvt Ltd
- Leighton Contractors Pty Ltd - Australia
- Dalmia Cement Bharat India
- Vedanta Resources Plc - India
- Vizag Seaport Private Limited - India
- Samtan Co., Ltd - South Korea
- Lanco Infratech Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Transport, Egypt
- Chettinad Cement Corporation Ltd - India
- IHS Mccloskey Coal Group - USA
- Gujarat Mineral Development Corp Ltd - India
- Wood Mackenzie - Singapore
- Georgia Ports Authority, United States
- MS Steel International - UAE
- Globalindo Alam Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Coalindo Energy - Indonesia
- Petron Corporation, Philippines
- Gujarat Sidhee Cement - India
- Miang Besar Coal Terminal - Indonesia
- Indian Energy Exchange, India
- TNB Fuel Sdn Bhd - Malaysia
- Meenaskhi Energy Private Limited - India
- Intertek Mineral Services - Indonesia
- Tamil Nadu electricity Board
- Indo Tambangraya Megah - Indonesia
- European Bulk Services B.V. - Netherlands
- New Zealand Coal & Carbon
- Ministry of Mines - Canada
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Coal and Oil Company - UAE
- AsiaOL BioFuels Corp., Philippines
- Aditya Birla Group - India
- Kartika Selabumi Mining - Indonesia
- McConnell Dowell - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Baramulti Group, Indonesia
- Holcim Trading Pte Ltd - Singapore
- CNBM International Corporation - China
- Maharashtra Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Cigading International Bulk Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- The University of Queensland
- Standard Chartered Bank - UAE
- Uttam Galva Steels Limited - India
- Maheswari Brothers Coal Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMC Global Power, Philippines
- Orica Mining Services - Indonesia
- Siam City Cement PLC, Thailand
- Bharathi Cement Corporation - India
- Minerals Council of Australia
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- The State Trading Corporation of India Ltd
- VISA Power Limited - India
- Bukit Makmur.PT - Indonesia
- Anglo American - United Kingdom
- Attock Cement Pakistan Limited
- Energy Link Ltd, New Zealand
- Central Electricity Authority - India
- Sical Logistics Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Posco Energy - South Korea
- Banpu Public Company Limited - Thailand
- Australian Coal Association
- Kohat Cement Company Ltd. - Pakistan
- Alfred C Toepfer International GmbH - Germany
- Economic Council, Georgia
- CIMB Investment Bank - Malaysia
- Bulk Trading Sa - Switzerland
- Rashtriya Ispat Nigam Limited - India
- Salva Resources Pvt Ltd - India
- Tata Chemicals Ltd - India
- Port Waratah Coal Services - Australia
- ASAPP Information Group - India
- International Coal Ventures Pvt Ltd - India
- Xindia Steels Limited - India
- Agrawal Coal Company - India
- Edison Trading Spa - Italy
- Renaissance Capital - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Singapore Mercantile Exchange
- Borneo Indobara - Indonesia
- Straits Asia Resources Limited - Singapore
- Ambuja Cements Ltd - India
- Antam Resourcindo - Indonesia
- Sindya Power Generating Company Private Ltd
- Electricity Authority, New Zealand
- Toyota Tsusho Corporation, Japan
- Goldman Sachs - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Pendopo Energi Batubara - Indonesia
- Deloitte Consulting - India
- Eastern Coal Council - USA
- Bhatia International Limited - India
- Indogreen Group - Indonesia
- Price Waterhouse Coopers - Russia
- Jaiprakash Power Ventures ltd
- Energy Development Corp, Philippines
- PowerSource Philippines DevCo
- Jindal Steel & Power Ltd - India
- Malabar Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Barasentosa Lestari - Indonesia
- Thiess Contractors Indonesia
- Ceylon Electricity Board - Sri Lanka
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Oil Corporation Limited
- Aboitiz Power Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- Semirara Mining Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Electricity Generating Authority of Thailand
- Simpson Spence & Young - Indonesia
- LBH Netherlands Bv - Netherlands
- Formosa Plastics Group - Taiwan
- Medco Energi Mining Internasional
- Sojitz Corporation - Japan
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- Mintek Dendrill Indonesia
- PTC India Limited - India
- Savvy Resources Ltd - HongKong
- Planning Commission, India
- Videocon Industries ltd - India
- Gujarat Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Orica Australia Pty. Ltd.
- India Bulls Power Limited - India
- Thai Mozambique Logistica
- Madhucon Powers Ltd - India
- Global Green Power PLC Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- Larsen & Toubro Limited - India
- Essar Steel Hazira Ltd - India
- Independent Power Producers Association of India
- Ministry of Finance - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indika Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Carbofer General Trading SA - India
- Bhushan Steel Limited - India
- Bangladesh Power Developement Board
- SN Aboitiz Power Inc, Philippines
- Marubeni Corporation - India
- Kepco SPC Power Corporation, Philippines
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