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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, 08 October 18
KOMIPO INVITES BIDS FOR 520,000 TONS OF COLOMBIAN ORIGIN OF 5,700 NAR COAL
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a tender for 520,000 MT of min. 5700 NAR coal of Colombian origin ...
Sunday, 07 October 18
SUPRAMAX: INDO-INDIA USUAL COAL RUNS WERE COVERED AT US$ 12K - FEARNLEYS
Capesize
Average daily earnings up close to 15 pct in 5 trading days, thus patience finally paying off for owners of the big ships - Chinese play ...
Sunday, 07 October 18
A CASE FOR 20/20 VISION? IMO'S LOW SULPHUR FUEL LIMIT UNDER MARPOL ANNEX VI WHICH COMES INTO FORCE ON 1ST JANUARY 2020
KNOWLEDGE TO ELEVATE
The implementation of the global 0.5% sulphur cap for bunker fuel under MARPOL Annex VI in just under 18 months’ ti ...
Friday, 05 October 18
COAL PRODUCTION REACHES 64% OF 2018 TARGET : THE JAKARTA POST
National coal production up to August has already reached 311 million tons, or 64 percent of this year's total target of 485 million tons, acco ...
Wednesday, 03 October 18
VALUE OF AUSTRALIAN COAL EXPORTS TIPPED TO DECLINE SHARPLY OVER NEXT 18 MONTHS - THE GUARDIAN
Thermal coal prices forecast to drop 25% and metallurgical coal prices 23% as value of iron ore exports also falls
The value of Aust ...
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- Chamber of Mines of South Africa
- Parry Sugars Refinery, India
- Karbindo Abesyapradhi - Indoneisa
- Trasteel International SA, Italy
- Cement Manufacturers Association - India
- Kohat Cement Company Ltd. - Pakistan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMG Consultants - Indonesia
- Vizag Seaport Private Limited - India
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Xindia Steels Limited - India
- Coalindo Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Independent Power Producers Association of India
- Electricity Generating Authority of Thailand
- Economic Council, Georgia
- Romanian Commodities Exchange
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- Semirara Mining and Power Corporation, Philippines
- Thiess Contractors Indonesia
- Banpu Public Company Limited - Thailand
- Sojitz Corporation - Japan
- Meralco Power Generation, Philippines
- PowerSource Philippines DevCo
- TeaM Sual Corporation - Philippines
- Sical Logistics Limited - India
- Star Paper Mills Limited - India
- Oldendorff Carriers - Singapore
- McConnell Dowell - Australia
- Thai Mozambique Logistica
- Therma Luzon, Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Karaikal Port Pvt Ltd - India
- New Zealand Coal & Carbon
- Straits Asia Resources Limited - Singapore
- IEA Clean Coal Centre - UK
- International Coal Ventures Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Energy Link Ltd, New Zealand
- Tata Chemicals Ltd - India
- Ind-Barath Power Infra Limited - India
- The Treasury - Australian Government
- SN Aboitiz Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Medco Energi Mining Internasional
- Ministry of Transport, Egypt
- Globalindo Alam Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Mintek Dendrill Indonesia
- European Bulk Services B.V. - Netherlands
- GAC Shipping (India) Pvt Ltd
- Mercator Lines Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Authority, New Zealand
- ICICI Bank Limited - India
- Aditya Birla Group - India
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement - Thailand
- CNBM International Corporation - China
- Kideco Jaya Agung - Indonesia
- Tamil Nadu electricity Board
- Africa Commodities Group - South Africa
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- Coal and Oil Company - UAE
- Attock Cement Pakistan Limited
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- Australian Coal Association
- Makarim & Taira - Indonesia
- Petron Corporation, Philippines
- Minerals Council of Australia
- Directorate Of Revenue Intelligence - India
- Pendopo Energi Batubara - Indonesia
- Kaltim Prima Coal - Indonesia
- Gujarat Sidhee Cement - India
- Merrill Lynch Commodities Europe
- Orica Australia Pty. Ltd.
- GN Power Mariveles Coal Plant, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kepco SPC Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Indogreen Group - Indonesia
- Rio Tinto Coal - Australia
- Orica Mining Services - Indonesia
- South Luzon Thermal Energy Corporation
- Savvy Resources Ltd - HongKong
- Cigading International Bulk Terminal - Indonesia
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Vedanta Resources Plc - India
- Salva Resources Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Toyota Tsusho Corporation, Japan
- Jaiprakash Power Ventures ltd
- Jindal Steel & Power Ltd - India
- The State Trading Corporation of India Ltd
- MS Steel International - UAE
- Planning Commission, India
- Standard Chartered Bank - UAE
- India Bulls Power Limited - India
- San Jose City I Power Corp, Philippines
- Central Java Power - Indonesia
- White Energy Company Limited
- Interocean Group of Companies - India
- Eastern Coal Council - USA
- IHS Mccloskey Coal Group - USA
- London Commodity Brokers - England
- Latin American Coal - Colombia
- Iligan Light & Power Inc, Philippines
- Georgia Ports Authority, United States
- Essar Steel Hazira Ltd - India
- Semirara Mining Corp, Philippines
- The University of Queensland
- SMC Global Power, Philippines
- GVK Power & Infra Limited - India
- Renaissance Capital - South Africa
- Sakthi Sugars Limited - India
- Aboitiz Power Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Power Finance Corporation Ltd., India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
- Wood Mackenzie - Singapore
- Kartika Selabumi Mining - Indonesia
- Central Electricity Authority - India
- Kumho Petrochemical, South Korea
- Posco Energy - South Korea
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- LBH Netherlands Bv - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Mercuria Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- Ministry of Finance - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- Simpson Spence & Young - Indonesia
- Bulk Trading Sa - Switzerland
- Pipit Mutiara Jaya. PT, Indonesia
- Parliament of New Zealand
- Marubeni Corporation - India
- Singapore Mercantile Exchange
- Barasentosa Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- PTC India Limited - India
- Lanco Infratech Ltd - India
- Maheswari Brothers Coal Limited - India
- Ambuja Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Indo Tambangraya Megah - Indonesia
- Altura Mining Limited, Indonesia
- Antam Resourcindo - Indonesia
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- Larsen & Toubro Limited - India
- Madhucon Powers Ltd - India
- Malabar Cements Ltd - India
- Edison Trading Spa - Italy
- Holcim Trading Pte Ltd - Singapore
- OPG Power Generation Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- PNOC Exploration Corporation - Philippines
- Carbofer General Trading SA - India
- Bhushan Steel Limited - India
- Mjunction Services Limited - India
- Energy Development Corp, Philippines
- Metalloyd Limited - United Kingdom
- Sree Jayajothi Cements Limited - India
- AsiaOL BioFuels Corp., Philippines
- Chettinad Cement Corporation Ltd - India
- Anglo American - United Kingdom
- CIMB Investment Bank - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Riau Bara Harum - Indonesia
- Bangladesh Power Developement Board
- Bhatia International Limited - India
- Indian Oil Corporation Limited
- Meenaskhi Energy Private Limited - India
- Uttam Galva Steels Limited - India
- Indian Energy Exchange, India
- Heidelberg Cement - Germany
- Port Waratah Coal Services - Australia
- Eastern Energy - Thailand
- Videocon Industries ltd - India
- Leighton Contractors Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Bukit Baiduri Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Dalmia Cement Bharat India
- Coastal Gujarat Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Mines - Canada
- VISA Power Limited - India
- Goldman Sachs - Singapore
- Manunggal Multi Energi - Indonesia
- Indika Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Bharathi Cement Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
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