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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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Friday, 11 October 19
KOREA SOUTH-EAST POWER TO IMPORT LCV COAL IN NOVEMBER
COALspot.com: South Korea’s Korea South-East Power Co., Ltd. (KOEN) has issued an international tender for 75,000 Metric Tons low calorific v ...
Thursday, 10 October 19
THERMAL COAL IMPORT LIKELY TO CROSS 200 MT IN 2019-20 - TIME OF INDIA
The country's overall thermal coal import is likely to cross the 200-million tonnes (MT) mark in the current financial year, according to Icra. ...
Wednesday, 09 October 19
SHIPPING MARKET INSIGHT - INTERMODAL
As we have already stated in previous insights, we had expected that the recovery on rates and activity across all segments in the offshore market ...
Thursday, 03 October 19
OIL PRICE ASSUMPTIONS UNCHANGED, NBP GAS PRICE LOWERED - FITCH RATINGS PRIMARY - FITCH RATINGS
Our oil price assumptions are unchanged, despite the recent price volatility following the attacks on Saudi Arabia's oil infrastructure, Fitch ...
Thursday, 03 October 19
SHIPPING MARKET INSIGHT
Edible oil products across the board are showing healthy amount of export activity, however, rates in most cases are struggling to move accordingly ...
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- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- Dalmia Cement Bharat India
- Ministry of Transport, Egypt
- Thai Mozambique Logistica
- TNB Fuel Sdn Bhd - Malaysia
- Sakthi Sugars Limited - India
- PTC India Limited - India
- Indian Energy Exchange, India
- Formosa Plastics Group - Taiwan
- Planning Commission, India
- White Energy Company Limited
- Meralco Power Generation, Philippines
- Kideco Jaya Agung - Indonesia
- Rio Tinto Coal - Australia
- Attock Cement Pakistan Limited
- Aboitiz Power Corporation - Philippines
- Orica Mining Services - Indonesia
- CNBM International Corporation - China
- Salva Resources Pvt Ltd - India
- Chamber of Mines of South Africa
- Chettinad Cement Corporation Ltd - India
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Carbofer General Trading SA - India
- Holcim Trading Pte Ltd - Singapore
- Coal and Oil Company - UAE
- VISA Power Limited - India
- Central Electricity Authority - India
- Siam City Cement PLC, Thailand
- Directorate Of Revenue Intelligence - India
- Economic Council, Georgia
- PetroVietnam Power Coal Import and Supply Company
- Georgia Ports Authority, United States
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Larsen & Toubro Limited - India
- Binh Thuan Hamico - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- PNOC Exploration Corporation - Philippines
- Tamil Nadu electricity Board
- The Treasury - Australian Government
- Lanco Infratech Ltd - India
- Globalindo Alam Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Trasteel International SA, Italy
- Malabar Cements Ltd - India
- Mjunction Services Limited - India
- The University of Queensland
- Samtan Co., Ltd - South Korea
- PowerSource Philippines DevCo
- Mercator Lines Limited - India
- Ambuja Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Bukit Baiduri Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Heidelberg Cement - Germany
- Semirara Mining and Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Sojitz Corporation - Japan
- Wilmar Investment Holdings
- Vijayanagar Sugar Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Eastern Energy - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Romanian Commodities Exchange
- TeaM Sual Corporation - Philippines
- Barasentosa Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- Central Java Power - Indonesia
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- Thiess Contractors Indonesia
- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
- Borneo Indobara - Indonesia
- Savvy Resources Ltd - HongKong
- Petrochimia International Co. Ltd.- Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karbindo Abesyapradhi - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Medco Energi Mining Internasional
- South Luzon Thermal Energy Corporation
- Timah Investasi Mineral - Indoneisa
- India Bulls Power Limited - India
- Parry Sugars Refinery, India
- Merrill Lynch Commodities Europe
- Bhatia International Limited - India
- Grasim Industreis Ltd - India
- MS Steel International - UAE
- Latin American Coal - Colombia
- Ceylon Electricity Board - Sri Lanka
- The State Trading Corporation of India Ltd
- Baramulti Group, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Electricity Authority, New Zealand
- Semirara Mining Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Africa Commodities Group - South Africa
- SMG Consultants - Indonesia
- Makarim & Taira - Indonesia
- Toyota Tsusho Corporation, Japan
- Iligan Light & Power Inc, Philippines
- Renaissance Capital - South Africa
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Petron Corporation, Philippines
- GMR Energy Limited - India
- Oldendorff Carriers - Singapore
- Port Waratah Coal Services - Australia
- Marubeni Corporation - India
- Therma Luzon, Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Indogreen Group - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Commonwealth Bank - Australia
- New Zealand Coal & Carbon
- Aditya Birla Group - India
- Indonesian Coal Mining Association
- Madhucon Powers Ltd - India
- Meenaskhi Energy Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
- Uttam Galva Steels Limited - India
- Coalindo Energy - Indonesia
- ASAPP Information Group - India
- Goldman Sachs - Singapore
- Videocon Industries ltd - India
- Sindya Power Generating Company Private Ltd
- Kapuas Tunggal Persada - Indonesia
- Independent Power Producers Association of India
- Intertek Mineral Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Billiton Holdings Pty Ltd - Australia
- Leighton Contractors Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- Bhushan Steel Limited - India
- Standard Chartered Bank - UAE
- Minerals Council of Australia
- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- GAC Shipping (India) Pvt Ltd
- Antam Resourcindo - Indonesia
- Singapore Mercantile Exchange
- Agrawal Coal Company - India
- Indo Tambangraya Megah - Indonesia
- Star Paper Mills Limited - India
- Bulk Trading Sa - Switzerland
- Australian Commodity Traders Exchange
- Australian Coal Association
- Kalimantan Lumbung Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Global Business Power Corporation, Philippines
- London Commodity Brokers - England
- ICICI Bank Limited - India
- Bharathi Cement Corporation - India
- CIMB Investment Bank - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Xindia Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Indika Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Coastal Gujarat Power Limited - India
- Metalloyd Limited - United Kingdom
- Interocean Group of Companies - India
- Energy Link Ltd, New Zealand
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Tata Chemicals Ltd - India
- Gujarat Sidhee Cement - India
- Banpu Public Company Limited - Thailand
- Ind-Barath Power Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Development Corp, Philippines
- Parliament of New Zealand
- Essar Steel Hazira Ltd - India
- Siam City Cement - Thailand
- Bangladesh Power Developement Board
- Kohat Cement Company Ltd. - Pakistan
- Karaikal Port Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Wood Mackenzie - Singapore
- McConnell Dowell - Australia
- Bukit Makmur.PT - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- GVK Power & Infra Limited - India
- Cement Manufacturers Association - India
- IHS Mccloskey Coal Group - USA
- Anglo American - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Alfred C Toepfer International GmbH - Germany
- European Bulk Services B.V. - Netherlands
- SMC Global Power, Philippines
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