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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, 14 December 18
KOSPO INVITED BIDS FOR 320,000 MT OF LOW CALORIFIC VALUE COAL
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 320,000 MT of min 4,300 kcal/kg NCV coal per ...
Friday, 14 December 18
KOSPO INVITES BIDS FOR 1,177,000 METRIC TONS OF COAL FOR Q1' 19 LOADING
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 701,000 MT of min 5,600 kcal/kg NCV coal and ...
Friday, 14 December 18
COAL IMPORT TO BE CHECKED BY RISING DOMESTIC PRODUCTION - FINANCIAL EXPRESS
The government’s effort to increase domestic coal production and power demand falling with the onset of the winters will check coal imports, ...
Thursday, 13 December 18
STRAITS AFFECTED BY TERRITORIAL DISPUTE BETWEEN SINGAPORE AND MALAYSIA - THE STANDARD CLUB
A recent territorial dispute has occurred between Singapore and Malaysia involving the Straits of Johor.
The Malaysian Attorney Gene ...
Wednesday, 12 December 18
SHIPPING MARKET INSIGHT - CHRISTOPHER WHITTY
China’s monthly iron ore imports dropped for the first time this year joined by declines in copper and soybeans as economic growth slows in t ...
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- Krishnapatnam Port Company Ltd. - India
- Rashtriya Ispat Nigam Limited - India
- International Coal Ventures Pvt Ltd - India
- Anglo American - United Kingdom
- McConnell Dowell - Australia
- White Energy Company Limited
- PNOC Exploration Corporation - Philippines
- Romanian Commodities Exchange
- Mercuria Energy - Indonesia
- Sical Logistics Limited - India
- South Luzon Thermal Energy Corporation
- Pipit Mutiara Jaya. PT, Indonesia
- San Jose City I Power Corp, Philippines
- VISA Power Limited - India
- Sree Jayajothi Cements Limited - India
- Videocon Industries ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Indogreen Group - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Dalmia Cement Bharat India
- Antam Resourcindo - Indonesia
- IEA Clean Coal Centre - UK
- Directorate Of Revenue Intelligence - India
- Asmin Koalindo Tuhup - Indonesia
- Iligan Light & Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Standard Chartered Bank - UAE
- Indian Energy Exchange, India
- Altura Mining Limited, Indonesia
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vizag Seaport Private Limited - India
- Coal and Oil Company - UAE
- Mercator Lines Limited - India
- Price Waterhouse Coopers - Russia
- Metalloyd Limited - United Kingdom
- Madhucon Powers Ltd - India
- Georgia Ports Authority, United States
- Thai Mozambique Logistica
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Baramulti Group, Indonesia
- Meralco Power Generation, Philippines
- Posco Energy - South Korea
- Aditya Birla Group - India
- Pendopo Energi Batubara - Indonesia
- Makarim & Taira - Indonesia
- Salva Resources Pvt Ltd - India
- Ambuja Cements Ltd - India
- Power Finance Corporation Ltd., India
- New Zealand Coal & Carbon
- Sarangani Energy Corporation, Philippines
- The Treasury - Australian Government
- Planning Commission, India
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- Global Business Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Generating Authority of Thailand
- Uttam Galva Steels Limited - India
- The State Trading Corporation of India Ltd
- MS Steel International - UAE
- Kapuas Tunggal Persada - Indonesia
- Wilmar Investment Holdings
- LBH Netherlands Bv - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Deloitte Consulting - India
- Gujarat Mineral Development Corp Ltd - India
- GAC Shipping (India) Pvt Ltd
- SN Aboitiz Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Aboitiz Power Corporation - Philippines
- Grasim Industreis Ltd - India
- Minerals Council of Australia
- GVK Power & Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Australian Coal Association
- Bharathi Cement Corporation - India
- Attock Cement Pakistan Limited
- GMR Energy Limited - India
- Mjunction Services Limited - India
- Renaissance Capital - South Africa
- Global Coal Blending Company Limited - Australia
- Gujarat Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Barasentosa Lestari - Indonesia
- Wood Mackenzie - Singapore
- Siam City Cement PLC, Thailand
- Borneo Indobara - Indonesia
- Star Paper Mills Limited - India
- Ministry of Mines - Canada
- Xindia Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Finance - Indonesia
- Goldman Sachs - Singapore
- Ministry of Transport, Egypt
- Central Java Power - Indonesia
- AsiaOL BioFuels Corp., Philippines
- The University of Queensland
- Australian Commodity Traders Exchange
- Bangladesh Power Developement Board
- Trasteel International SA, Italy
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coastal Gujarat Power Limited - India
- Kideco Jaya Agung - Indonesia
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- Economic Council, Georgia
- Commonwealth Bank - Australia
- Kalimantan Lumbung Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Orica Mining Services - Indonesia
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Meenaskhi Energy Private Limited - India
- Ind-Barath Power Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Gujarat Sidhee Cement - India
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- London Commodity Brokers - England
- Karbindo Abesyapradhi - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- Samtan Co., Ltd - South Korea
- Directorate General of MIneral and Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Energy Development Corp, Philippines
- Thiess Contractors Indonesia
- Bhatia International Limited - India
- Chamber of Mines of South Africa
- Port Waratah Coal Services - Australia
- Jaiprakash Power Ventures ltd
- Semirara Mining and Power Corporation, Philippines
- ICICI Bank Limited - India
- Kepco SPC Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Tata Chemicals Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Essar Steel Hazira Ltd - India
- Bhushan Steel Limited - India
- Africa Commodities Group - South Africa
- Bukit Baiduri Energy - Indonesia
- Independent Power Producers Association of India
- Orica Australia Pty. Ltd.
- Indonesian Coal Mining Association
- Tamil Nadu electricity Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Coal Council - USA
- Formosa Plastics Group - Taiwan
- Sojitz Corporation - Japan
- Latin American Coal - Colombia
- Indian Oil Corporation Limited
- CIMB Investment Bank - Malaysia
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- Heidelberg Cement - Germany
- PTC India Limited - India
- Indo Tambangraya Megah - Indonesia
- Lanco Infratech Ltd - India
- Intertek Mineral Services - Indonesia
- Singapore Mercantile Exchange
- Vedanta Resources Plc - India
- SMC Global Power, Philippines
- Sindya Power Generating Company Private Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Eastern Energy - Thailand
- Simpson Spence & Young - Indonesia
- India Bulls Power Limited - India
- Parliament of New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Indika Energy - Indonesia
- Carbofer General Trading SA - India
- TNB Fuel Sdn Bhd - Malaysia
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- SMG Consultants - Indonesia
- Banpu Public Company Limited - Thailand
- Globalindo Alam Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- ASAPP Information Group - India
- Edison Trading Spa - Italy
- Kumho Petrochemical, South Korea
- Merrill Lynch Commodities Europe
- Agrawal Coal Company - India
- Mintek Dendrill Indonesia
- Central Electricity Authority - India
- Cement Manufacturers Association - India
- Coalindo Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Leighton Contractors Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Electricity Authority, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Kobexindo Tractors - Indoneisa
- TeaM Sual Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Riau Bara Harum - Indonesia
- Kartika Selabumi Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- Bukit Makmur.PT - Indonesia
- Energy Link Ltd, New Zealand
- Sakthi Sugars Limited - India
- Marubeni Corporation - India
- Bulk Trading Sa - Switzerland
- Binh Thuan Hamico - Vietnam
- Jindal Steel & Power Ltd - India
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