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