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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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Sunday, 30 August 20
PANAMAX - THIS WEEK THE DEMAND HAS PICKED UP, BUT THE TONNAGE LIST IS INCREASING DAY BY DAY - FEARNLEYS
Cape Size
More or less flat from previous week, with cape rates moving from US$ 19,500 to 18,900 on average. West Australia however being more ...
Saturday, 29 August 20
COAL INDIA'S FUEL SUPPLY TO POWER SECTOR DROPS ABOUT 20% IN APR-JUL: PTI
State-owned Coal India”s fuel supply to the power sector registered a decline of 19.5 per cent to 126.30 million tonnes (MT) in the April-Jul ...
Saturday, 29 August 20
SOUTH KOREAN BROKERAGE FIRM KOREA INVESTMENT & SECURITIES TO STOP ALL COAL BUSINESS - KOREA HERALD
South Korean brokerage firm Korea Investment & Securities has decided to stop its investments in coal, in line with the Moon Jae-in administrat ...
Thursday, 27 August 20
KOREAN GENCOS INVITED BIDS FOR TOTAL 985,000 TONS OF BITUMINOUS COAL FOR NOVEMBER 2020 LOADING
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO) on behalf of EWP, KOSPO, KOSEP and KOWEPO has issued an international tender for total 985,000 ...
Thursday, 27 August 20
SOUTHEAST ASIAN NATIONS SET REGION-WIDE RENEWABLE ENERGY GOAL OF 23 PERCENT BY 2025 - ASEAN POST
The Association of Southeast Asian Nations (ASEAN) has set an ambitious target of securing 23 percent of its primary energy from renewable so ...
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- Timah Investasi Mineral - Indoneisa
- Siam City Cement PLC, Thailand
- Thiess Contractors Indonesia
- The State Trading Corporation of India Ltd
- Georgia Ports Authority, United States
- Chettinad Cement Corporation Ltd - India
- TeaM Sual Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- New Zealand Coal & Carbon
- Bayan Resources Tbk. - Indonesia
- Economic Council, Georgia
- Edison Trading Spa - Italy
- Gujarat Mineral Development Corp Ltd - India
- Vizag Seaport Private Limited - India
- CIMB Investment Bank - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Sinarmas Energy and Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Singapore Mercantile Exchange
- GN Power Mariveles Coal Plant, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Link Ltd, New Zealand
- Makarim & Taira - Indonesia
- Videocon Industries ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Minerals Council of Australia
- Anglo American - United Kingdom
- Metalloyd Limited - United Kingdom
- South Luzon Thermal Energy Corporation
- Sical Logistics Limited - India
- Indo Tambangraya Megah - Indonesia
- PNOC Exploration Corporation - Philippines
- Eastern Coal Council - USA
- SMG Consultants - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bangladesh Power Developement Board
- Global Coal Blending Company Limited - Australia
- Borneo Indobara - Indonesia
- Latin American Coal - Colombia
- PowerSource Philippines DevCo
- Indian Oil Corporation Limited
- Antam Resourcindo - Indonesia
- MS Steel International - UAE
- Orica Australia Pty. Ltd.
- Commonwealth Bank - Australia
- White Energy Company Limited
- GMR Energy Limited - India
- Larsen & Toubro Limited - India
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Salva Resources Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Ind-Barath Power Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Savvy Resources Ltd - HongKong
- ASAPP Information Group - India
- IHS Mccloskey Coal Group - USA
- Mjunction Services Limited - India
- Global Business Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Karbindo Abesyapradhi - Indoneisa
- Agrawal Coal Company - India
- VISA Power Limited - India
- Marubeni Corporation - India
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Coastal Gujarat Power Limited - India
- Wood Mackenzie - Singapore
- Bhatia International Limited - India
- Australian Coal Association
- India Bulls Power Limited - India
- Attock Cement Pakistan Limited
- Semirara Mining Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Price Waterhouse Coopers - Russia
- Australian Commodity Traders Exchange
- Romanian Commodities Exchange
- Renaissance Capital - South Africa
- The University of Queensland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- Sindya Power Generating Company Private Ltd
- IEA Clean Coal Centre - UK
- Vedanta Resources Plc - India
- Sarangani Energy Corporation, Philippines
- Medco Energi Mining Internasional
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- Bukit Baiduri Energy - Indonesia
- The Treasury - Australian Government
- Coal and Oil Company - UAE
- GAC Shipping (India) Pvt Ltd
- Mercuria Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GVK Power & Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sakthi Sugars Limited - India
- Baramulti Group, Indonesia
- Ambuja Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Wilmar Investment Holdings
- Bhushan Steel Limited - India
- Samtan Co., Ltd - South Korea
- Eastern Energy - Thailand
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Interocean Group of Companies - India
- Deloitte Consulting - India
- Aditya Birla Group - India
- Gujarat Sidhee Cement - India
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Kalimantan Lumbung Energi - Indonesia
- Trasteel International SA, Italy
- Electricity Authority, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Star Paper Mills Limited - India
- Jaiprakash Power Ventures ltd
- Grasim Industreis Ltd - India
- Sojitz Corporation - Japan
- Maheswari Brothers Coal Limited - India
- Energy Development Corp, Philippines
- SMC Global Power, Philippines
- Central Java Power - Indonesia
- Dalmia Cement Bharat India
- Riau Bara Harum - Indonesia
- Indonesian Coal Mining Association
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- Oldendorff Carriers - Singapore
- LBH Netherlands Bv - Netherlands
- Indian Energy Exchange, India
- Essar Steel Hazira Ltd - India
- Siam City Cement - Thailand
- Posco Energy - South Korea
- Banpu Public Company Limited - Thailand
- Formosa Plastics Group - Taiwan
- Therma Luzon, Inc, Philippines
- Power Finance Corporation Ltd., India
- Carbofer General Trading SA - India
- Pendopo Energi Batubara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- London Commodity Brokers - England
- Kepco SPC Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Manunggal Multi Energi - Indonesia
- Tamil Nadu electricity Board
- Malabar Cements Ltd - India
- Central Electricity Authority - India
- Ministry of Transport, Egypt
- Mercator Lines Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Parry Sugars Refinery, India
- Ministry of Finance - Indonesia
- Coalindo Energy - Indonesia
- Mintek Dendrill Indonesia
- Kaltim Prima Coal - Indonesia
- Bharathi Cement Corporation - India
- Chamber of Mines of South Africa
- Indika Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Lanco Infratech Ltd - India
- San Jose City I Power Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- Tata Chemicals Ltd - India
- Kideco Jaya Agung - Indonesia
- Madhucon Powers Ltd - India
- European Bulk Services B.V. - Netherlands
- Orica Mining Services - Indonesia
- Intertek Mineral Services - Indonesia
- Meralco Power Generation, Philippines
- Rio Tinto Coal - Australia
- Iligan Light & Power Inc, Philippines
- PTC India Limited - India
- Cement Manufacturers Association - India
- Sree Jayajothi Cements Limited - India
- Aboitiz Power Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Planning Commission, India
- Electricity Generating Authority of Thailand
- Altura Mining Limited, Indonesia
- Heidelberg Cement - Germany
- Goldman Sachs - Singapore
- PetroVietnam Power Coal Import and Supply Company
- McConnell Dowell - Australia
- SN Aboitiz Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Kartika Selabumi Mining - Indonesia
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Thai Mozambique Logistica
- Directorate Of Revenue Intelligence - India
- CNBM International Corporation - China
- Kobexindo Tractors - Indoneisa
- Bulk Trading Sa - Switzerland
- Barasentosa Lestari - Indonesia
- Indogreen Group - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Merrill Lynch Commodities Europe
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