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