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