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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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Wednesday, 12 October 16
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Wednesday, 12 October 16
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Wednesday, 12 October 16
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Monday, 10 October 16
INDONESIAN COAL PRICE REFERENCE HITS HIGHEST LEVELS SINCE SEPTEMBER 2014
COALspot.com: The Indonesia coal benchmark price hits to its highest level since September 2014. The government declared benchmark prices for Indon ...
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THE FREIGHT MARKET FIRMS UP ON STRONG CAPE PERFORMANCE
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities rose again and ending in a positive note this past week. ...
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- Minerals Council of Australia
- Ministry of Mines - Canada
- Samtan Co., Ltd - South Korea
- International Coal Ventures Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- Mjunction Services Limited - India
- Kepco SPC Power Corporation, Philippines
- Interocean Group of Companies - India
- South Luzon Thermal Energy Corporation
- Power Finance Corporation Ltd., India
- Makarim & Taira - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Orica Mining Services - Indonesia
- Wood Mackenzie - Singapore
- Bukit Makmur.PT - Indonesia
- Bhushan Steel Limited - India
- Anglo American - United Kingdom
- Global Coal Blending Company Limited - Australia
- Tata Chemicals Ltd - India
- Leighton Contractors Pty Ltd - Australia
- SMG Consultants - Indonesia
- Indogreen Group - Indonesia
- Standard Chartered Bank - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Coal Council - USA
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- Parliament of New Zealand
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- Star Paper Mills Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Renaissance Capital - South Africa
- Jaiprakash Power Ventures ltd
- Gujarat Sidhee Cement - India
- Coastal Gujarat Power Limited - India
- White Energy Company Limited
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- Xindia Steels Limited - India
- Independent Power Producers Association of India
- ASAPP Information Group - India
- Borneo Indobara - Indonesia
- LBH Netherlands Bv - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Lanco Infratech Ltd - India
- Parry Sugars Refinery, India
- SN Aboitiz Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Vedanta Resources Plc - India
- Ministry of Transport, Egypt
- Kalimantan Lumbung Energi - Indonesia
- Thiess Contractors Indonesia
- Indika Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Global Business Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Sakthi Sugars Limited - India
- Pendopo Energi Batubara - Indonesia
- Directorate Of Revenue Intelligence - India
- Economic Council, Georgia
- Petron Corporation, Philippines
- Kumho Petrochemical, South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- IEA Clean Coal Centre - UK
- Meralco Power Generation, Philippines
- Australian Coal Association
- India Bulls Power Limited - India
- MS Steel International - UAE
- Wilmar Investment Holdings
- GN Power Mariveles Coal Plant, Philippines
- The University of Queensland
- Georgia Ports Authority, United States
- Rio Tinto Coal - Australia
- Planning Commission, India
- Chamber of Mines of South Africa
- Krishnapatnam Port Company Ltd. - India
- Indonesian Coal Mining Association
- Neyveli Lignite Corporation Ltd, - India
- Antam Resourcindo - Indonesia
- Trasteel International SA, Italy
- Simpson Spence & Young - Indonesia
- Riau Bara Harum - Indonesia
- Barasentosa Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Merrill Lynch Commodities Europe
- Indian Energy Exchange, India
- Alfred C Toepfer International GmbH - Germany
- GAC Shipping (India) Pvt Ltd
- Cigading International Bulk Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Jorong Barutama Greston.PT - Indonesia
- Australian Commodity Traders Exchange
- Commonwealth Bank - Australia
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- Electricity Generating Authority of Thailand
- Singapore Mercantile Exchange
- Rashtriya Ispat Nigam Limited - India
- PNOC Exploration Corporation - Philippines
- Edison Trading Spa - Italy
- AsiaOL BioFuels Corp., Philippines
- Kaltim Prima Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- GVK Power & Infra Limited - India
- Romanian Commodities Exchange
- Iligan Light & Power Inc, Philippines
- Sojitz Corporation - Japan
- Maheswari Brothers Coal Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Marubeni Corporation - India
- Bhatia International Limited - India
- Aboitiz Power Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Medco Energi Mining Internasional
- Miang Besar Coal Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- Semirara Mining and Power Corporation, Philippines
- VISA Power Limited - India
- Banpu Public Company Limited - Thailand
- Therma Luzon, Inc, Philippines
- Uttam Galva Steels Limited - India
- Grasim Industreis Ltd - India
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Karaikal Port Pvt Ltd - India
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- New Zealand Coal & Carbon
- Kapuas Tunggal Persada - Indonesia
- Kartika Selabumi Mining - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Oil Corporation Limited
- Intertek Mineral Services - Indonesia
- Manunggal Multi Energi - Indonesia
- Coal and Oil Company - UAE
- ICICI Bank Limited - India
- Semirara Mining Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Globalindo Alam Lestari - Indonesia
- Videocon Industries ltd - India
- San Jose City I Power Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- PTC India Limited - India
- Bukit Baiduri Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bharathi Cement Corporation - India
- Cement Manufacturers Association - India
- Vizag Seaport Private Limited - India
- Kideco Jaya Agung - Indonesia
- Deloitte Consulting - India
- Timah Investasi Mineral - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- PowerSource Philippines DevCo
- Siam City Cement - Thailand
- Kohat Cement Company Ltd. - Pakistan
- SMC Global Power, Philippines
- Chettinad Cement Corporation Ltd - India
- Sarangani Energy Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- CNBM International Corporation - China
- Bahari Cakrawala Sebuku - Indonesia
- Indo Tambangraya Megah - Indonesia
- Siam City Cement PLC, Thailand
- Eastern Energy - Thailand
- Electricity Authority, New Zealand
- Coalindo Energy - Indonesia
- Posco Energy - South Korea
- Meenaskhi Energy Private Limited - India
- Mercuria Energy - Indonesia
- McConnell Dowell - Australia
- Binh Thuan Hamico - Vietnam
- Ministry of Finance - Indonesia
- Energy Development Corp, Philippines
- Attock Cement Pakistan Limited
- PetroVietnam Power Coal Import and Supply Company
- Essar Steel Hazira Ltd - India
- Price Waterhouse Coopers - Russia
- Malabar Cements Ltd - India
- Port Waratah Coal Services - Australia
- Carbofer General Trading SA - India
- CIMB Investment Bank - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Goldman Sachs - Singapore
- Mercator Lines Limited - India
- Mintek Dendrill Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Altura Mining Limited, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Heidelberg Cement - Germany
- Sical Logistics Limited - India
- Baramulti Group, Indonesia
- Kobexindo Tractors - Indoneisa
- Formosa Plastics Group - Taiwan
- Gujarat Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Dalmia Cement Bharat India
- Oldendorff Carriers - Singapore
- Metalloyd Limited - United Kingdom
- Central Java Power - Indonesia
- The Treasury - Australian Government
- Jindal Steel & Power Ltd - India
- London Commodity Brokers - England
- Ambuja Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Larsen & Toubro Limited - India
- Energy Link Ltd, New Zealand
- Salva Resources Pvt Ltd - India
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