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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, 26 April 20
STRONGER BUNKER PRICES FAIL TO RALLY FREIGHT MARKET - FIS
VLSFO bunker prices rebounded by $22.50 to $229/mt in the port of Singapore but failed to turn around the spot freight market.
Some ...
Saturday, 25 April 20
KOREA SOUTH-EAST POWER CO. INVITED BIDS FOR 780K - 900K MT OF 5600 NCV COAL FOR JULY TO OCTOBER 2020 LOADING
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 780,000~900,000 Metric Tons (MT) s ...
Saturday, 25 April 20
SEAFARER MENTAL WELLBEING DURING THE COVID-19 PANDEMIC - STANDARD CLUB
KNOWLEDGE TO ELEVATE
COVID-19 has forced many parts of the world to enforce a lockdown in a bid to flatten the curve in terms of transmissions ...
Friday, 24 April 20
KOMIPO INVITED BIDS FOR 5700 NAR COAL FOR JUNE & JULY LOADING
COALspot.com: South Korea’s Korea Midland Power Co. Ltd. (KOMIPO) Has Issued An International Tender For 260,000 Metric Tons (MT) Steam Coal ...
Friday, 24 April 20
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remained flat during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
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- Standard Chartered Bank - UAE
- Anglo American - United Kingdom
- Therma Luzon, Inc, Philippines
- White Energy Company Limited
- Leighton Contractors Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Cigading International Bulk Terminal - Indonesia
- Goldman Sachs - Singapore
- Uttam Galva Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- VISA Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Star Paper Mills Limited - India
- Mintek Dendrill Indonesia
- Indian Oil Corporation Limited
- South Luzon Thermal Energy Corporation
- Jindal Steel & Power Ltd - India
- Sree Jayajothi Cements Limited - India
- Madhucon Powers Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Cement Manufacturers Association - India
- PTC India Limited - India
- Trasteel International SA, Italy
- Siam City Cement PLC, Thailand
- Ministry of Finance - Indonesia
- Electricity Authority, New Zealand
- Tata Chemicals Ltd - India
- Agrawal Coal Company - India
- Thiess Contractors Indonesia
- Sinarmas Energy and Mining - Indonesia
- PowerSource Philippines DevCo
- London Commodity Brokers - England
- Barasentosa Lestari - Indonesia
- Bharathi Cement Corporation - India
- AsiaOL BioFuels Corp., Philippines
- SMG Consultants - Indonesia
- Coalindo Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Carbofer General Trading SA - India
- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- PetroVietnam Power Coal Import and Supply Company
- Bhatia International Limited - India
- Bulk Trading Sa - Switzerland
- Bayan Resources Tbk. - Indonesia
- Chettinad Cement Corporation Ltd - India
- Xindia Steels Limited - India
- Essar Steel Hazira Ltd - India
- Commonwealth Bank - Australia
- PNOC Exploration Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Mercuria Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Kobexindo Tractors - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Globalindo Alam Lestari - Indonesia
- Aditya Birla Group - India
- Holcim Trading Pte Ltd - Singapore
- Bukit Baiduri Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Savvy Resources Ltd - HongKong
- Pipit Mutiara Jaya. PT, Indonesia
- Sojitz Corporation - Japan
- Eastern Coal Council - USA
- Port Waratah Coal Services - Australia
- Australian Coal Association
- Alfred C Toepfer International GmbH - Germany
- Kideco Jaya Agung - Indonesia
- Manunggal Multi Energi - Indonesia
- Attock Cement Pakistan Limited
- Malabar Cements Ltd - India
- Thai Mozambique Logistica
- Lanco Infratech Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Romanian Commodities Exchange
- Kapuas Tunggal Persada - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Heidelberg Cement - Germany
- SN Aboitiz Power Inc, Philippines
- McConnell Dowell - Australia
- Edison Trading Spa - Italy
- Neyveli Lignite Corporation Ltd, - India
- Marubeni Corporation - India
- Kaltim Prima Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Maheswari Brothers Coal Limited - India
- Coastal Gujarat Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Independent Power Producers Association of India
- Meralco Power Generation, Philippines
- Sical Logistics Limited - India
- CIMB Investment Bank - Malaysia
- Power Finance Corporation Ltd., India
- Parliament of New Zealand
- Mercator Lines Limited - India
- Aboitiz Power Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Central Java Power - Indonesia
- Simpson Spence & Young - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Karbindo Abesyapradhi - Indoneisa
- ICICI Bank Limited - India
- India Bulls Power Limited - India
- Ministry of Mines - Canada
- Borneo Indobara - Indonesia
- Metalloyd Limited - United Kingdom
- Oldendorff Carriers - Singapore
- Singapore Mercantile Exchange
- Energy Link Ltd, New Zealand
- Meenaskhi Energy Private Limited - India
- CNBM International Corporation - China
- Parry Sugars Refinery, India
- Bukit Makmur.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Ministry of Transport, Egypt
- IHS Mccloskey Coal Group - USA
- Semirara Mining Corp, Philippines
- Intertek Mineral Services - Indonesia
- Wood Mackenzie - Singapore
- Mjunction Services Limited - India
- Central Electricity Authority - India
- Dalmia Cement Bharat India
- LBH Netherlands Bv - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Australia Pty. Ltd.
- Altura Mining Limited, Indonesia
- Chamber of Mines of South Africa
- Economic Council, Georgia
- Toyota Tsusho Corporation, Japan
- Eastern Energy - Thailand
- Timah Investasi Mineral - Indoneisa
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Renaissance Capital - South Africa
- Gujarat Sidhee Cement - India
- Semirara Mining and Power Corporation, Philippines
- Grasim Industreis Ltd - India
- The State Trading Corporation of India Ltd
- Indika Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- The University of Queensland
- Antam Resourcindo - Indonesia
- Vizag Seaport Private Limited - India
- Posco Energy - South Korea
- ASAPP Information Group - India
- GMR Energy Limited - India
- Merrill Lynch Commodities Europe
- Larsen & Toubro Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Indonesian Coal Mining Association
- Petrochimia International Co. Ltd.- Taiwan
- Ambuja Cements Ltd - India
- Electricity Generating Authority of Thailand
- Kohat Cement Company Ltd. - Pakistan
- The Treasury - Australian Government
- Planning Commission, India
- Medco Energi Mining Internasional
- Interocean Group of Companies - India
- TeaM Sual Corporation - Philippines
- Riau Bara Harum - Indonesia
- Baramulti Group, Indonesia
- Sakthi Sugars Limited - India
- IEA Clean Coal Centre - UK
- Orica Mining Services - Indonesia
- Formosa Plastics Group - Taiwan
- Vedanta Resources Plc - India
- Price Waterhouse Coopers - Russia
- Kumho Petrochemical, South Korea
- Energy Development Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Bhushan Steel Limited - India
- Indian Energy Exchange, India
- Rashtriya Ispat Nigam Limited - India
- Sindya Power Generating Company Private Ltd
- Indogreen Group - Indonesia
- Jaiprakash Power Ventures ltd
- Tamil Nadu electricity Board
- International Coal Ventures Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- SMC Global Power, Philippines
- GVK Power & Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Videocon Industries ltd - India
- Rio Tinto Coal - Australia
- Petron Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Minerals Council of Australia
- Miang Besar Coal Terminal - Indonesia
- Bangladesh Power Developement Board
- Asmin Koalindo Tuhup - Indonesia
- Sarangani Energy Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Georgia Ports Authority, United States
- Wilmar Investment Holdings
- European Bulk Services B.V. - Netherlands
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- Deloitte Consulting - India
- Global Green Power PLC Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Australian Commodity Traders Exchange
- Latin American Coal - Colombia
- MS Steel International - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Maharashtra Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement - Thailand
- Africa Commodities Group - South Africa
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