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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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Tuesday, 26 November 19
PREPARATIONS INTENSIFY AS 1 JANUARY 2020 GLOBAL CUT IN SULPHUR IN SHIP'S FUEL OIL LOOMS: IMO
“IMO 2020” requirements for ships to cut sulphur oxide emissions enter into effect in just over one month’s time. This will signi ...
Monday, 25 November 19
COAL SUPPLY BY CIL TO POWER SECTOR DROPS OVER 8 PC TO 253 MT IN APRIL-OCTOBER - PTI
Supply of coal by state-owned CIL to the power sector registered a decline of 8.5 per cent to 253 million tonnes in the April-October period of thi ...
Monday, 25 November 19
A 53,000DWT SHIP FIXED AT $9,500 DELIVERY SINGAPORE TRIP, VIA INDONESIA, REDELIVERY VIETNAM - BALTIC BRIEFING
Capesize
After a week of value being eroded on the Capesize market, Friday brought improved sentiment across most of the routes. The 5TC averag ...
Monday, 25 November 19
KOWEPO INVITED 6.79 MILLION TONS OF (SUB)BITUMINOUS STEAM COAL BIDS
COALspot.com: South Korea’s Korea Western Power Co., Ltd. (KOWEPO) has issued an international tender for 6,798,000 tons of coal for 5 years ...
Friday, 22 November 19
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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- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Orica Australia Pty. Ltd.
- Bahari Cakrawala Sebuku - Indonesia
- Indika Energy - Indonesia
- Cement Manufacturers Association - India
- Planning Commission, India
- Electricity Generating Authority of Thailand
- Sree Jayajothi Cements Limited - India
- Gujarat Sidhee Cement - India
- Bulk Trading Sa - Switzerland
- White Energy Company Limited
- PNOC Exploration Corporation - Philippines
- Semirara Mining Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Makarim & Taira - Indonesia
- Salva Resources Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Krishnapatnam Port Company Ltd. - India
- Petrochimia International Co. Ltd.- Taiwan
- Parliament of New Zealand
- Meenaskhi Energy Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Kaltim Prima Coal - Indonesia
- The State Trading Corporation of India Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Economic Council, Georgia
- New Zealand Coal & Carbon
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chamber of Mines of South Africa
- Karbindo Abesyapradhi - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Grasim Industreis Ltd - India
- Orica Mining Services - Indonesia
- Barasentosa Lestari - Indonesia
- The Treasury - Australian Government
- Romanian Commodities Exchange
- GN Power Mariveles Coal Plant, Philippines
- Globalindo Alam Lestari - Indonesia
- Bhatia International Limited - India
- Kobexindo Tractors - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- Banpu Public Company Limited - Thailand
- Indian Oil Corporation Limited
- European Bulk Services B.V. - Netherlands
- Electricity Authority, New Zealand
- Formosa Plastics Group - Taiwan
- The University of Queensland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Posco Energy - South Korea
- Independent Power Producers Association of India
- MS Steel International - UAE
- Riau Bara Harum - Indonesia
- Coastal Gujarat Power Limited - India
- Anglo American - United Kingdom
- Simpson Spence & Young - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Carbofer General Trading SA - India
- Mercator Lines Limited - India
- Savvy Resources Ltd - HongKong
- Latin American Coal - Colombia
- Standard Chartered Bank - UAE
- Maheswari Brothers Coal Limited - India
- PTC India Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Parry Sugars Refinery, India
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Indonesian Coal Mining Association
- PowerSource Philippines DevCo
- Bukit Baiduri Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Rio Tinto Coal - Australia
- Price Waterhouse Coopers - Russia
- Minerals Council of Australia
- Energy Link Ltd, New Zealand
- South Luzon Thermal Energy Corporation
- Mjunction Services Limited - India
- Wood Mackenzie - Singapore
- SN Aboitiz Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Meralco Power Generation, Philippines
- IHS Mccloskey Coal Group - USA
- Bharathi Cement Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- Xindia Steels Limited - India
- Sindya Power Generating Company Private Ltd
- ASAPP Information Group - India
- Global Green Power PLC Corporation, Philippines
- Global Business Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- CNBM International Corporation - China
- Vizag Seaport Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement - Thailand
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- Port Waratah Coal Services - Australia
- GVK Power & Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Altura Mining Limited, Indonesia
- CIMB Investment Bank - Malaysia
- Sical Logistics Limited - India
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
- Kumho Petrochemical, South Korea
- Essar Steel Hazira Ltd - India
- Central Electricity Authority - India
- TNB Fuel Sdn Bhd - Malaysia
- Interocean Group of Companies - India
- Alfred C Toepfer International GmbH - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Energy - Thailand
- Indian Energy Exchange, India
- Directorate General of MIneral and Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- OPG Power Generation Pvt Ltd - India
- Wilmar Investment Holdings
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- India Bulls Power Limited - India
- Australian Commodity Traders Exchange
- Toyota Tsusho Corporation, Japan
- Semirara Mining and Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Africa Commodities Group - South Africa
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- GAC Shipping (India) Pvt Ltd
- Antam Resourcindo - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Attock Cement Pakistan Limited
- Australian Coal Association
- Bhushan Steel Limited - India
- SMC Global Power, Philippines
- Eastern Coal Council - USA
- Coalindo Energy - Indonesia
- Mintek Dendrill Indonesia
- ICICI Bank Limited - India
- Energy Development Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Madhucon Powers Ltd - India
- Tata Chemicals Ltd - India
- Ministry of Finance - Indonesia
- Agrawal Coal Company - India
- SMG Consultants - Indonesia
- Ambuja Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Power Finance Corporation Ltd., India
- TeaM Sual Corporation - Philippines
- Merrill Lynch Commodities Europe
- Star Paper Mills Limited - India
- Manunggal Multi Energi - Indonesia
- Edison Trading Spa - Italy
- Baramulti Group, Indonesia
- Lanco Infratech Ltd - India
- Georgia Ports Authority, United States
- Indogreen Group - Indonesia
- Marubeni Corporation - India
- Sarangani Energy Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Thai Mozambique Logistica
- Medco Energi Mining Internasional
- Ministry of Transport, Egypt
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- VISA Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Therma Luzon, Inc, Philippines
- Aditya Birla Group - India
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- Intertek Mineral Services - Indonesia
- Ministry of Mines - Canada
- Bhoruka Overseas - Indonesia
- Dalmia Cement Bharat India
- Uttam Galva Steels Limited - India
- McConnell Dowell - Australia
- Siam City Cement PLC, Thailand
- Coal and Oil Company - UAE
- LBH Netherlands Bv - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GMR Energy Limited - India
- Petron Corporation, Philippines
- Sojitz Corporation - Japan
- Vedanta Resources Plc - India
- Commonwealth Bank - Australia
- London Commodity Brokers - England
- Videocon Industries ltd - India
- Leighton Contractors Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Karaikal Port Pvt Ltd - India
- Mercuria Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Binh Thuan Hamico - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Singapore Mercantile Exchange
- Aboitiz Power Corporation - Philippines
- Tamil Nadu electricity Board
- Bangladesh Power Developement Board
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Oldendorff Carriers - Singapore
- Straits Asia Resources Limited - Singapore
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