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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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Thursday, 04 June 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Thursday, 04 June 20
DON'T FORGET THE REAL PURPOSE OF RISK ASSESSMENTS - GARD
KNOWLEDGE TO ELEVATE
When doing a risk assessment, we often overcomplicate it and forget its real purpose.
Rather than ensuring that crew ...
Wednesday, 03 June 20
MARKET INSIGHT - INTERMODAL
Once again shipping is about to venture into uncharted waters and before the challenges of the past decade are forgotten, shipowners will have to o ...
Tuesday, 02 June 20
KOSPO LOOKING FOR 80000 MT OF 4200 NCV COAL FOR JULY
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 80,000 Metric Tons (MT) 4200 NCV coal for 12 - 21, July ...
Tuesday, 02 June 20
INDONESIAN COAL MINER BUMI RESOURCES Q1 OUTPUT UP 5% - REUTERS
Indonesia’s largest coal miner Bumi Resources posted a 5% increase in first-quarter output at 20.8 million tonnes, the company said in a stat ...
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- Romanian Commodities Exchange
- Directorate Of Revenue Intelligence - India
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
- Merrill Lynch Commodities Europe
- Karaikal Port Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Sindya Power Generating Company Private Ltd
- Energy Development Corp, Philippines
- Marubeni Corporation - India
- Chettinad Cement Corporation Ltd - India
- Semirara Mining Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Uttam Galva Steels Limited - India
- Independent Power Producers Association of India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Sree Jayajothi Cements Limited - India
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- Interocean Group of Companies - India
- Altura Mining Limited, Indonesia
- Economic Council, Georgia
- Rashtriya Ispat Nigam Limited - India
- Electricity Authority, New Zealand
- Simpson Spence & Young - Indonesia
- MS Steel International - UAE
- Madhucon Powers Ltd - India
- Electricity Generating Authority of Thailand
- Jindal Steel & Power Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Global Green Power PLC Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Ind-Barath Power Infra Limited - India
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- Minerals Council of Australia
- Siam City Cement PLC, Thailand
- Sinarmas Energy and Mining - Indonesia
- Grasim Industreis Ltd - India
- Thai Mozambique Logistica
- Star Paper Mills Limited - India
- The University of Queensland
- Salva Resources Pvt Ltd - India
- Coal and Oil Company - UAE
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- Bhushan Steel Limited - India
- Posco Energy - South Korea
- Edison Trading Spa - Italy
- Central Java Power - Indonesia
- Gujarat Sidhee Cement - India
- OPG Power Generation Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Leighton Contractors Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- White Energy Company Limited
- European Bulk Services B.V. - Netherlands
- The State Trading Corporation of India Ltd
- AsiaOL BioFuels Corp., Philippines
- Wilmar Investment Holdings
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Tamil Nadu electricity Board
- New Zealand Coal & Carbon
- Ministry of Mines - Canada
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Finance - Indonesia
- Makarim & Taira - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Samtan Co., Ltd - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Sarangani Energy Corporation, Philippines
- Ambuja Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement - Thailand
- Essar Steel Hazira Ltd - India
- Mjunction Services Limited - India
- Central Electricity Authority - India
- Price Waterhouse Coopers - Russia
- International Coal Ventures Pvt Ltd - India
- Vedanta Resources Plc - India
- Kobexindo Tractors - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kideco Jaya Agung - Indonesia
- IHS Mccloskey Coal Group - USA
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- Billiton Holdings Pty Ltd - Australia
- Sojitz Corporation - Japan
- Coastal Gujarat Power Limited - India
- Bangladesh Power Developement Board
- Xindia Steels Limited - India
- Sical Logistics Limited - India
- India Bulls Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Commonwealth Bank - Australia
- Krishnapatnam Port Company Ltd. - India
- Kumho Petrochemical, South Korea
- South Luzon Thermal Energy Corporation
- Parliament of New Zealand
- Ministry of Transport, Egypt
- PTC India Limited - India
- ICICI Bank Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Rio Tinto Coal - Australia
- Toyota Tsusho Corporation, Japan
- Goldman Sachs - Singapore
- Barasentosa Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Renaissance Capital - South Africa
- Savvy Resources Ltd - HongKong
- Banpu Public Company Limited - Thailand
- Sakthi Sugars Limited - India
- Coalindo Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Chamber of Mines of South Africa
- Mercuria Energy - Indonesia
- McConnell Dowell - Australia
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Indian Energy Exchange, India
- LBH Netherlands Bv - Netherlands
- GMR Energy Limited - India
- CNBM International Corporation - China
- Neyveli Lignite Corporation Ltd, - India
- Africa Commodities Group - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- TeaM Sual Corporation - Philippines
- VISA Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Baramulti Group, Indonesia
- Antam Resourcindo - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Agrawal Coal Company - India
- Jaiprakash Power Ventures ltd
- The Treasury - Australian Government
- Eastern Energy - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Power Finance Corporation Ltd., India
- Medco Energi Mining Internasional
- Indika Energy - Indonesia
- Trasteel International SA, Italy
- Holcim Trading Pte Ltd - Singapore
- Indogreen Group - Indonesia
- Standard Chartered Bank - UAE
- Singapore Mercantile Exchange
- Global Coal Blending Company Limited - Australia
- Pendopo Energi Batubara - Indonesia
- Heidelberg Cement - Germany
- CIMB Investment Bank - Malaysia
- Kaltim Prima Coal - Indonesia
- London Commodity Brokers - England
- Australian Coal Association
- Vizag Seaport Private Limited - India
- Binh Thuan Hamico - Vietnam
- Videocon Industries ltd - India
- Kepco SPC Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Bhoruka Overseas - Indonesia
- Meralco Power Generation, Philippines
- PowerSource Philippines DevCo
- Energy Link Ltd, New Zealand
- Thiess Contractors Indonesia
- Malabar Cements Ltd - India
- Petron Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Formosa Plastics Group - Taiwan
- Straits Asia Resources Limited - Singapore
- Mintek Dendrill Indonesia
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- Alfred C Toepfer International GmbH - Germany
- Wood Mackenzie - Singapore
- Gujarat Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Deloitte Consulting - India
- Attock Cement Pakistan Limited
- Port Waratah Coal Services - Australia
- Maharashtra Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Larsen & Toubro Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Indonesian Coal Mining Association
- Meenaskhi Energy Private Limited - India
- Orica Australia Pty. Ltd.
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Mercator Lines Limited - India
- Metalloyd Limited - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Cement Manufacturers Association - India
- San Jose City I Power Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Parry Sugars Refinery, India
- SMC Global Power, Philippines
- Orica Mining Services - Indonesia
- Planning Commission, India
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- Iligan Light & Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- IEA Clean Coal Centre - UK
- Indo Tambangraya Megah - Indonesia
- Eastern Coal Council - USA
- Carbofer General Trading SA - India
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