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