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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, 24 March 17
ADARO INDONESIA'S COAL SALES VOLUME INCREASED SLIGHTLY TO 54.1 MILLION TONES IN 2016
COALspot.com: PT. Adaro Indonesia, Indonesia’s second largest coal miner’s sales volume increased slightly to 54.1 million tones (Mt) i ...
Friday, 24 March 17
U.S COAL PRODUCTION ESTIMATE DECLINE 4.4% W/W - EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 14.1 million short tons ...
Thursday, 23 March 17
CAPESIZE: TAKING A BREATHER AFTER RALLYING - BUT OUTLOOK FOR WEEKS TO COME NOT SCARY - FEARNLEYS
Supramax
In the Pacific the market seems somewhat slower this week, although healthy rates still being achieved said Fearnleys in its latest week ...
Thursday, 23 March 17
KOREA MIDLAND POWER COMPANY LIMITED INVITES BIDS FOR TOTAL 4.77 MILLION TONS OF BITUMINOUS COAL FOR ITS BORYEONG POWER PLANT
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a new tender for 2,090,000 Metric Tons of Bituminous coal f ...
Wednesday, 22 March 17
THE DRY BULK MARKET HAS UNDOUBTEDLY REBOUNDED SINCE THE SAME PERIOD LAST YEAR - KONSTANTINOS KONTOMICHIS
The Dry Bulk market has undoubtedly rebounded since the same period last year and currently enjoys healthier freight rates. The positive reversal i ...
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- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- Directorate General of MIneral and Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- Alfred C Toepfer International GmbH - Germany
- Antam Resourcindo - Indonesia
- Tata Chemicals Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petron Corporation, Philippines
- Bhatia International Limited - India
- Sical Logistics Limited - India
- Sakthi Sugars Limited - India
- Kapuas Tunggal Persada - Indonesia
- Sojitz Corporation - Japan
- India Bulls Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Eastern Coal Council - USA
- Ministry of Mines - Canada
- SMG Consultants - Indonesia
- Bayan Resources Tbk. - Indonesia
- IHS Mccloskey Coal Group - USA
- Rashtriya Ispat Nigam Limited - India
- Planning Commission, India
- Medco Energi Mining Internasional
- Energy Link Ltd, New Zealand
- Energy Development Corp, Philippines
- Coal and Oil Company - UAE
- Standard Chartered Bank - UAE
- The Treasury - Australian Government
- Riau Bara Harum - Indonesia
- Global Coal Blending Company Limited - Australia
- Edison Trading Spa - Italy
- Marubeni Corporation - India
- Uttam Galva Steels Limited - India
- Salva Resources Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Deloitte Consulting - India
- CIMB Investment Bank - Malaysia
- Larsen & Toubro Limited - India
- International Coal Ventures Pvt Ltd - India
- Mintek Dendrill Indonesia
- Ambuja Cements Ltd - India
- Orica Australia Pty. Ltd.
- Jaiprakash Power Ventures ltd
- Thiess Contractors Indonesia
- Commonwealth Bank - Australia
- Cigading International Bulk Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Merrill Lynch Commodities Europe
- Therma Luzon, Inc, Philippines
- TeaM Sual Corporation - Philippines
- Baramulti Group, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kaltim Prima Coal - Indonesia
- Madhucon Powers Ltd - India
- PNOC Exploration Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Jindal Steel & Power Ltd - India
- OPG Power Generation Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Coalindo Energy - Indonesia
- Ministry of Transport, Egypt
- Ceylon Electricity Board - Sri Lanka
- The University of Queensland
- Heidelberg Cement - Germany
- GVK Power & Infra Limited - India
- Star Paper Mills Limited - India
- Aditya Birla Group - India
- South Luzon Thermal Energy Corporation
- Chettinad Cement Corporation Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Straits Asia Resources Limited - Singapore
- Sarangani Energy Corporation, Philippines
- Bhoruka Overseas - Indonesia
- European Bulk Services B.V. - Netherlands
- Kepco SPC Power Corporation, Philippines
- Central Electricity Authority - India
- Electricity Generating Authority of Thailand
- Sindya Power Generating Company Private Ltd
- Kalimantan Lumbung Energi - Indonesia
- Latin American Coal - Colombia
- Sree Jayajothi Cements Limited - India
- Power Finance Corporation Ltd., India
- Dalmia Cement Bharat India
- Aboitiz Power Corporation - Philippines
- Mercator Lines Limited - India
- Thai Mozambique Logistica
- GN Power Mariveles Coal Plant, Philippines
- Holcim Trading Pte Ltd - Singapore
- Simpson Spence & Young - Indonesia
- Orica Mining Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- VISA Power Limited - India
- Gujarat Sidhee Cement - India
- IEA Clean Coal Centre - UK
- Global Green Power PLC Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Georgia Ports Authority, United States
- LBH Netherlands Bv - Netherlands
- Indian Energy Exchange, India
- Attock Cement Pakistan Limited
- Karbindo Abesyapradhi - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Tamil Nadu electricity Board
- Wilmar Investment Holdings
- Interocean Group of Companies - India
- Gujarat Mineral Development Corp Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Indogreen Group - Indonesia
- Kumho Petrochemical, South Korea
- Krishnapatnam Port Company Ltd. - India
- Samtan Co., Ltd - South Korea
- Singapore Mercantile Exchange
- Independent Power Producers Association of India
- Meenaskhi Energy Private Limited - India
- Karaikal Port Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Makarim & Taira - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining and Power Corporation, Philippines
- New Zealand Coal & Carbon
- Intertek Mineral Services - Indonesia
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Renaissance Capital - South Africa
- Carbofer General Trading SA - India
- Gujarat Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Minerals Council of Australia
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- White Energy Company Limited
- Bhushan Steel Limited - India
- Videocon Industries ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Goldman Sachs - Singapore
- Indo Tambangraya Megah - Indonesia
- Essar Steel Hazira Ltd - India
- Barasentosa Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Grasim Industreis Ltd - India
- PowerSource Philippines DevCo
- Timah Investasi Mineral - Indoneisa
- Indonesian Coal Mining Association
- Indian Oil Corporation Limited
- Port Waratah Coal Services - Australia
- San Jose City I Power Corp, Philippines
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Anglo American - United Kingdom
- Bukit Makmur.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- GAC Shipping (India) Pvt Ltd
- Oldendorff Carriers - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- Ministry of Finance - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Trasteel International SA, Italy
- Kohat Cement Company Ltd. - Pakistan
- Sinarmas Energy and Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Malabar Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Parry Sugars Refinery, India
- Lanco Infratech Ltd - India
- Parliament of New Zealand
- London Commodity Brokers - England
- The State Trading Corporation of India Ltd
- Pendopo Energi Batubara - Indonesia
- Rio Tinto Coal - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GMR Energy Limited - India
- Agrawal Coal Company - India
- Kartika Selabumi Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Central Java Power - Indonesia
- Leighton Contractors Pty Ltd - Australia
- ASAPP Information Group - India
- CNBM International Corporation - China
- Electricity Authority, New Zealand
- MS Steel International - UAE
- Eastern Energy - Thailand
- Borneo Indobara - Indonesia
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indika Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- Posco Energy - South Korea
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement - Thailand
- Manunggal Multi Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Chamber of Mines of South Africa
- PTC India Limited - India
- ICICI Bank Limited - India
- Economic Council, Georgia
- Australian Coal Association
- Kideco Jaya Agung - Indonesia
- Romanian Commodities Exchange
- Africa Commodities Group - South Africa
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
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