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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, 01 June 16
INDIA'S COAL IMPORTS IN APRIL 2016 DECLINED 15% Y/Y; COAL INDIA INCREASED COAL PRICES BY 6.2%
Coal India has approved raising weighted average coal prices by 6.2 per cent over the current price for both regulated and non-regulated sectors.
...
Wednesday, 01 June 16
ZERO SUPPLY TO FUEL GROWTH IN THE DRY BULK MARKET SAYS BIMCO PRESIDENT
The dry bulk market could become profitable again in 2019 – but only if a series of extremely tough and sustained measures are taken by shipo ...
Wednesday, 01 June 16
MARKET INSIGHT - LINOS KOGEVINAS
In another page from this year’s oil drama, oil has, after a series of gains, rebounded to ~$50 / barrel and immediately stopped climbing. &n ...
Tuesday, 31 May 16
CS50 INDONESIA COAL INDEX UP 0.28% COMPARED WITH A WEEK AGO
COALspot.com: Average 5000 GAR coal index of Indonesian origin was up 0.28 percent week over week to averaging $39.01 per ton this past week, shows ...
Monday, 30 May 16
BORYEONG POWER PLANT TO IMPORT HALF A MILLION TONS OF BITUMINOUS COAL
COALspot.com: South Korea’s state-owned utility Korea Midland Power (KOMIPO) issued a new tender for 500,000 Metric Tons of Bituminous Coal T ...
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- Uttam Galva Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Kepco SPC Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Meenaskhi Energy Private Limited - India
- Central Java Power - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Chamber of Mines of South Africa
- Georgia Ports Authority, United States
- Manunggal Multi Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Xindia Steels Limited - India
- Intertek Mineral Services - Indonesia
- Antam Resourcindo - Indonesia
- VISA Power Limited - India
- Sojitz Corporation - Japan
- Coalindo Energy - Indonesia
- Edison Trading Spa - Italy
- Goldman Sachs - Singapore
- Semirara Mining and Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Indika Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Star Paper Mills Limited - India
- Economic Council, Georgia
- White Energy Company Limited
- IHS Mccloskey Coal Group - USA
- Coal and Oil Company - UAE
- The University of Queensland
- Grasim Industreis Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Vizag Seaport Private Limited - India
- Makarim & Taira - Indonesia
- Ceylon Electricity Board - Sri Lanka
- International Coal Ventures Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Vedanta Resources Plc - India
- Trasteel International SA, Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- Minerals Council of Australia
- Orica Mining Services - Indonesia
- Eastern Coal Council - USA
- Sindya Power Generating Company Private Ltd
- Jorong Barutama Greston.PT - Indonesia
- Planning Commission, India
- Electricity Authority, New Zealand
- Energy Development Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Ministry of Transport, Egypt
- Formosa Plastics Group - Taiwan
- Energy Link Ltd, New Zealand
- CNBM International Corporation - China
- Romanian Commodities Exchange
- Electricity Generating Authority of Thailand
- GMR Energy Limited - India
- Dalmia Cement Bharat India
- Wood Mackenzie - Singapore
- Australian Coal Association
- Standard Chartered Bank - UAE
- Attock Cement Pakistan Limited
- Riau Bara Harum - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Aboitiz Power Corporation - Philippines
- Africa Commodities Group - South Africa
- Carbofer General Trading SA - India
- Kapuas Tunggal Persada - Indonesia
- Timah Investasi Mineral - Indoneisa
- Altura Mining Limited, Indonesia
- Latin American Coal - Colombia
- London Commodity Brokers - England
- Savvy Resources Ltd - HongKong
- Commonwealth Bank - Australia
- Orica Australia Pty. Ltd.
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- Independent Power Producers Association of India
- Indo Tambangraya Megah - Indonesia
- Ambuja Cements Ltd - India
- India Bulls Power Limited - India
- GVK Power & Infra Limited - India
- Metalloyd Limited - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Essar Steel Hazira Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Thai Mozambique Logistica
- Mjunction Services Limited - India
- Wilmar Investment Holdings
- Global Business Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- The State Trading Corporation of India Ltd
- Port Waratah Coal Services - Australia
- Gujarat Sidhee Cement - India
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- Semirara Mining Corp, Philippines
- Tamil Nadu electricity Board
- Baramulti Group, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Madhucon Powers Ltd - India
- McConnell Dowell - Australia
- Bulk Trading Sa - Switzerland
- Central Electricity Authority - India
- PTC India Limited - India
- Eastern Energy - Thailand
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- Borneo Indobara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- Maheswari Brothers Coal Limited - India
- Tata Chemicals Ltd - India
- LBH Netherlands Bv - Netherlands
- Price Waterhouse Coopers - Russia
- Vijayanagar Sugar Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Anglo American - United Kingdom
- Bhatia International Limited - India
- Bhushan Steel Limited - India
- Mintek Dendrill Indonesia
- MS Steel International - UAE
- Karbindo Abesyapradhi - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Parry Sugars Refinery, India
- Petron Corporation, Philippines
- SMG Consultants - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Sarangani Energy Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Toyota Tsusho Corporation, Japan
- The Treasury - Australian Government
- Banpu Public Company Limited - Thailand
- Cement Manufacturers Association - India
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- Bhoruka Overseas - Indonesia
- Sical Logistics Limited - India
- Videocon Industries ltd - India
- GAC Shipping (India) Pvt Ltd
- PetroVietnam Power Coal Import and Supply Company
- AsiaOL BioFuels Corp., Philippines
- Mercuria Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Kobexindo Tractors - Indoneisa
- Iligan Light & Power Inc, Philippines
- ASAPP Information Group - India
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Simpson Spence & Young - Indonesia
- Kumho Petrochemical, South Korea
- Asmin Koalindo Tuhup - Indonesia
- Renaissance Capital - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement PLC, Thailand
- Straits Asia Resources Limited - Singapore
- PowerSource Philippines DevCo
- Krishnapatnam Port Company Ltd. - India
- Globalindo Alam Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- CIMB Investment Bank - Malaysia
- Oldendorff Carriers - Singapore
- Coastal Gujarat Power Limited - India
- Agrawal Coal Company - India
- IEA Clean Coal Centre - UK
- Miang Besar Coal Terminal - Indonesia
- Medco Energi Mining Internasional
- Ministry of Finance - Indonesia
- Samtan Co., Ltd - South Korea
- Pendopo Energi Batubara - Indonesia
- Mercator Lines Limited - India
- Aditya Birla Group - India
- Indogreen Group - Indonesia
- Larsen & Toubro Limited - India
- South Luzon Thermal Energy Corporation
- Ministry of Mines - Canada
- Parliament of New Zealand
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- Deloitte Consulting - India
- San Jose City I Power Corp, Philippines
- Indonesian Coal Mining Association
- Thiess Contractors Indonesia
- Power Finance Corporation Ltd., India
- Posco Energy - South Korea
- Kartika Selabumi Mining - Indonesia
- Lanco Infratech Ltd - India
- Bangladesh Power Developement Board
- Global Coal Blending Company Limited - Australia
- SMC Global Power, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- New Zealand Coal & Carbon
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Commodity Traders Exchange
- Rio Tinto Coal - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Merrill Lynch Commodities Europe
- Barasentosa Lestari - Indonesia
- Indian Energy Exchange, India
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