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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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Monday, 11 March 19
SUPRAMAX: A 61,000 DWT VESSEL WAS BOOKED SINGAPORE FOR A TRIP VIA INDONESIA TO CHINA AT $10,500 - BALTIC BRIEFING
Capesize
A faint glimmer of hope with the suggestion the market may have finally bottomed out, with owners attempting to resist further cuts in ...
Friday, 08 March 19
KOMIPO INVITES BIDS FOR 2.6 MILLION TONS OF AUSTRALIAN 5700 NAR COAL FOR FIVE YEARS
South Korea state-owned utility Korea Midland Power (KOMIPO) issued a tender for 520,000 MT of min. 5700 NAR coal of Australian origin to be burnt ...
Friday, 08 March 19
CHINA'S COAL DEMAND FORECAST TO DROP SLOWLY - YONHAP
China’s coal demand is expected to fall at a snail’s pace over the next 20 years due to the country’s preference for the cheap fo ...
Thursday, 07 March 19
INDONESIAN COAL PRICE REFERENCE PLUNGE TO LOWEST IN SEVEN MONTHS
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Wednesday, 06 March 19
KOSPO INVITES BIDS FOR 80,000 MT OF 3800 NCV COAL FOR 21 - 30 MARCH, 2019 LOADING
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 80,000 MT of min 3,800 kcal/kg NCV low calor ...
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- Bukit Baiduri Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- VISA Power Limited - India
- Ministry of Mines - Canada
- Australian Commodity Traders Exchange
- Indogreen Group - Indonesia
- Malabar Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Altura Mining Limited, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Development Corp, Philippines
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- Goldman Sachs - Singapore
- Bhushan Steel Limited - India
- Parliament of New Zealand
- Ind-Barath Power Infra Limited - India
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- Sree Jayajothi Cements Limited - India
- Indika Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Krishnapatnam Port Company Ltd. - India
- Timah Investasi Mineral - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Anglo American - United Kingdom
- New Zealand Coal & Carbon
- Ambuja Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Maheswari Brothers Coal Limited - India
- Semirara Mining and Power Corporation, Philippines
- Wilmar Investment Holdings
- LBH Netherlands Bv - Netherlands
- Directorate Of Revenue Intelligence - India
- San Jose City I Power Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Mjunction Services Limited - India
- Grasim Industreis Ltd - India
- PTC India Limited - India
- Aditya Birla Group - India
- CNBM International Corporation - China
- Orica Australia Pty. Ltd.
- Meenaskhi Energy Private Limited - India
- Jindal Steel & Power Ltd - India
- Barasentosa Lestari - Indonesia
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- Heidelberg Cement - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Manunggal Multi Energi - Indonesia
- Marubeni Corporation - India
- Aboitiz Power Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coal and Oil Company - UAE
- Essar Steel Hazira Ltd - India
- Ministry of Transport, Egypt
- Singapore Mercantile Exchange
- The State Trading Corporation of India Ltd
- Baramulti Group, Indonesia
- Makarim & Taira - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Bulk Trading Sa - Switzerland
- SMC Global Power, Philippines
- Indo Tambangraya Megah - Indonesia
- Kartika Selabumi Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Port Waratah Coal Services - Australia
- Sakthi Sugars Limited - India
- Therma Luzon, Inc, Philippines
- Electricity Authority, New Zealand
- Bhoruka Overseas - Indonesia
- Posco Energy - South Korea
- Gujarat Sidhee Cement - India
- The University of Queensland
- Merrill Lynch Commodities Europe
- Parry Sugars Refinery, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- London Commodity Brokers - England
- Binh Thuan Hamico - Vietnam
- Dalmia Cement Bharat India
- Minerals Council of Australia
- Chamber of Mines of South Africa
- Tata Chemicals Ltd - India
- Mercator Lines Limited - India
- Indonesian Coal Mining Association
- Riau Bara Harum - Indonesia
- Commonwealth Bank - Australia
- Jaiprakash Power Ventures ltd
- Wood Mackenzie - Singapore
- Holcim Trading Pte Ltd - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Carbofer General Trading SA - India
- Metalloyd Limited - United Kingdom
- CIMB Investment Bank - Malaysia
- Globalindo Alam Lestari - Indonesia
- McConnell Dowell - Australia
- Cigading International Bulk Terminal - Indonesia
- ASAPP Information Group - India
- Vedanta Resources Plc - India
- The Treasury - Australian Government
- Renaissance Capital - South Africa
- IEA Clean Coal Centre - UK
- Attock Cement Pakistan Limited
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- Bangladesh Power Developement Board
- Kapuas Tunggal Persada - Indonesia
- Cement Manufacturers Association - India
- Larsen & Toubro Limited - India
- TeaM Sual Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- GAC Shipping (India) Pvt Ltd
- Neyveli Lignite Corporation Ltd, - India
- Kobexindo Tractors - Indoneisa
- Australian Coal Association
- Romanian Commodities Exchange
- India Bulls Power Limited - India
- Orica Mining Services - Indonesia
- Global Business Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Meralco Power Generation, Philippines
- Eastern Coal Council - USA
- Bhatia International Limited - India
- Standard Chartered Bank - UAE
- Tamil Nadu electricity Board
- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- Sinarmas Energy and Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Ministry of Finance - Indonesia
- Kumho Petrochemical, South Korea
- Global Green Power PLC Corporation, Philippines
- Coalindo Energy - Indonesia
- Deloitte Consulting - India
- Price Waterhouse Coopers - Russia
- Rashtriya Ispat Nigam Limited - India
- Sical Logistics Limited - India
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- South Luzon Thermal Energy Corporation
- Kepco SPC Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- GMR Energy Limited - India
- Straits Asia Resources Limited - Singapore
- Videocon Industries ltd - India
- PNOC Exploration Corporation - Philippines
- Thai Mozambique Logistica
- White Energy Company Limited
- Rio Tinto Coal - Australia
- Intertek Mineral Services - Indonesia
- Trasteel International SA, Italy
- Interocean Group of Companies - India
- SN Aboitiz Power Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- ICICI Bank Limited - India
- Africa Commodities Group - South Africa
- Toyota Tsusho Corporation, Japan
- Latin American Coal - Colombia
- Karaikal Port Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Thiess Contractors Indonesia
- Banpu Public Company Limited - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Global Coal Blending Company Limited - Australia
- International Coal Ventures Pvt Ltd - India
- Eastern Energy - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Central Electricity Authority - India
- Siam City Cement PLC, Thailand
- Siam City Cement - Thailand
- Lanco Infratech Ltd - India
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Borneo Indobara - Indonesia
- Madhucon Powers Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Salva Resources Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Bharathi Cement Corporation - India
- Independent Power Producers Association of India
- SMG Consultants - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pipit Mutiara Jaya. PT, Indonesia
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Georgia Ports Authority, United States
- Uttam Galva Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Medco Energi Mining Internasional
- Mintek Dendrill Indonesia
- European Bulk Services B.V. - Netherlands
- MS Steel International - UAE
- Miang Besar Coal Terminal - Indonesia
- Antam Resourcindo - Indonesia
- Planning Commission, India
- Electricity Generating Authority of Thailand
- Savvy Resources Ltd - HongKong
- Power Finance Corporation Ltd., India
- Xindia Steels Limited - India
- Vizag Seaport Private Limited - India
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