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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, 29 January 19
HARD COAL BEARS THE BRUNT OF THE RECOMMENDATIONS OF THE COMMISSION GROWTH STRUCTURAL CHANGE AND EMPLOYMENT - VDKI
Press Release: Hard coal bears the brunt of the recommendations of the Commission Growth Structural change and employment.
In its fi ...
Tuesday, 29 January 19
CHINA HAS BEEN THE TOP DRIVER OF GLOBAL GROWTH FOR NEARLY TWO DECADES - ALLIED
China has been the top driver of global growth for nearly two decades now, pushing demand for seaborne trade and being the key influencer for deman ...
Saturday, 26 January 19
SUPRAMAX: NICKEL ORE RUNS SAW A 56K DWT VESSEL, DELIVERY PHILIPPINES, FIXED FOR A TRIP TO CHINA AT $6K - BALTIC BRIEFING
Capesize
A week of dashed hopes for owners as the optimism evident the previous week evaporated. Rates slipped on all routes and underlying thr ...
Thursday, 24 January 19
ANOTHER DISAPPOINTING WEEK FOR PANAMAX OWNERS; MARKET CONTINUES DOWN IN BOTH BASINS - FEARNLEYS
Capesize
The week has been marked by low activity and dropping rates in both basins. As usual, supply additions have increased at the beginning ...
Thursday, 24 January 19
KOREA SOUTHERN POWER INVITED BIDS FOR 960K MT OF 4600 NCV COAL FOR THREE YEARS
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 320,000 MT of min 4,600 kcal/kg NCV low calo ...
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- Holcim Trading Pte Ltd - Singapore
- Sojitz Corporation - Japan
- Malabar Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Thiess Contractors Indonesia
- The Treasury - Australian Government
- Rio Tinto Coal - Australia
- Bhushan Steel Limited - India
- Edison Trading Spa - Italy
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- Aboitiz Power Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Economic Council, Georgia
- The University of Queensland
- GN Power Mariveles Coal Plant, Philippines
- Price Waterhouse Coopers - Russia
- Samtan Co., Ltd - South Korea
- Gujarat Mineral Development Corp Ltd - India
- ASAPP Information Group - India
- MS Steel International - UAE
- New Zealand Coal & Carbon
- Kideco Jaya Agung - Indonesia
- Mjunction Services Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Makarim & Taira - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Minerals Council of Australia
- PowerSource Philippines DevCo
- Attock Cement Pakistan Limited
- Energy Development Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Heidelberg Cement - Germany
- Riau Bara Harum - Indonesia
- Parliament of New Zealand
- Larsen & Toubro Limited - India
- Kaltim Prima Coal - Indonesia
- Wilmar Investment Holdings
- Oldendorff Carriers - Singapore
- Intertek Mineral Services - Indonesia
- Sakthi Sugars Limited - India
- Central Electricity Authority - India
- Coastal Gujarat Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Georgia Ports Authority, United States
- Indogreen Group - Indonesia
- Indonesian Coal Mining Association
- Thai Mozambique Logistica
- Krishnapatnam Port Company Ltd. - India
- Karaikal Port Pvt Ltd - India
- Parry Sugars Refinery, India
- Baramulti Group, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- SMG Consultants - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Videocon Industries ltd - India
- IHS Mccloskey Coal Group - USA
- Standard Chartered Bank - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petron Corporation, Philippines
- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
- Power Finance Corporation Ltd., India
- Bayan Resources Tbk. - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Tata Chemicals Ltd - India
- ICICI Bank Limited - India
- Ind-Barath Power Infra Limited - India
- TeaM Sual Corporation - Philippines
- SMC Global Power, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Neyveli Lignite Corporation Ltd, - India
- Madhucon Powers Ltd - India
- Sical Logistics Limited - India
- Sarangani Energy Corporation, Philippines
- Bharathi Cement Corporation - India
- Salva Resources Pvt Ltd - India
- GVK Power & Infra Limited - India
- Australian Commodity Traders Exchange
- Manunggal Multi Energi - Indonesia
- Savvy Resources Ltd - HongKong
- London Commodity Brokers - England
- Indika Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Toyota Tsusho Corporation, Japan
- Wood Mackenzie - Singapore
- The State Trading Corporation of India Ltd
- Banpu Public Company Limited - Thailand
- Orica Mining Services - Indonesia
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- Kartika Selabumi Mining - Indonesia
- Mercator Lines Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Interocean Group of Companies - India
- European Bulk Services B.V. - Netherlands
- Iligan Light & Power Inc, Philippines
- Independent Power Producers Association of India
- Commonwealth Bank - Australia
- Electricity Authority, New Zealand
- Indian Energy Exchange, India
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Borneo Indobara - Indonesia
- Orica Australia Pty. Ltd.
- Alfred C Toepfer International GmbH - Germany
- Star Paper Mills Limited - India
- Vizag Seaport Private Limited - India
- Latin American Coal - Colombia
- Barasentosa Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Bahari Cakrawala Sebuku - Indonesia
- PNOC Exploration Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Singapore Mercantile Exchange
- Xindia Steels Limited - India
- Essar Steel Hazira Ltd - India
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- Global Business Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Bangladesh Power Developement Board
- Directorate General of MIneral and Coal - Indonesia
- Renaissance Capital - South Africa
- Global Green Power PLC Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Gujarat Sidhee Cement - India
- International Coal Ventures Pvt Ltd - India
- Mintek Dendrill Indonesia
- Sree Jayajothi Cements Limited - India
- Africa Commodities Group - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coal and Oil Company - UAE
- Cement Manufacturers Association - India
- OPG Power Generation Pvt Ltd - India
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
- Straits Asia Resources Limited - Singapore
- Bhatia International Limited - India
- Formosa Plastics Group - Taiwan
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- Bulk Trading Sa - Switzerland
- GMR Energy Limited - India
- PTC India Limited - India
- Jindal Steel & Power Ltd - India
- Ministry of Finance - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Goldman Sachs - Singapore
- Merrill Lynch Commodities Europe
- Semirara Mining Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Coal Council - USA
- Agrawal Coal Company - India
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Anglo American - United Kingdom
- GAC Shipping (India) Pvt Ltd
- India Bulls Power Limited - India
- Jaiprakash Power Ventures ltd
- Posco Energy - South Korea
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Medco Energi Mining Internasional
- White Energy Company Limited
- Mercuria Energy - Indonesia
- Uttam Galva Steels Limited - India
- Lanco Infratech Ltd - India
- CNBM International Corporation - China
- Karbindo Abesyapradhi - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bukit Baiduri Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Energy - Thailand
- Antam Resourcindo - Indonesia
- Deloitte Consulting - India
- Chamber of Mines of South Africa
- CIMB Investment Bank - Malaysia
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- VISA Power Limited - India
- Indian Oil Corporation Limited
- Planning Commission, India
- Timah Investasi Mineral - Indoneisa
- Marubeni Corporation - India
- Romanian Commodities Exchange
- Australian Coal Association
- Siam City Cement - Thailand
- Ambuja Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Dalmia Cement Bharat India
- Siam City Cement PLC, Thailand
- Ministry of Transport, Egypt
- IEA Clean Coal Centre - UK
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
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