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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, 27 April 16
INDONESIAN COAL MINER KIDECO REPORTED NET PROFIT OF US$138.1 MILLION IN 2015
COALspot.com: Kideco Jaya Agung, one of the Indonesia's leading coal miners has reported net profit of US$138.1 million on revenue of US$1.65 b ...
Tuesday, 26 April 16
INDONESIA BANNED COAL EXPORTS TO PHILIPPINES BY BARGES DUE TO SECURITY CONCERN
COALspot.com: The Ministry of Energy and Mineral Resources (ESDM) on behalf of the government of Indonesia has Freeze coal exports by barges to Phi ...
Tuesday, 26 April 16
NEWBUILDING DEMAND DOWN EVERYWHERE? - CLARKSONS
Newbuild activity provides one indication of an owner country’s likely future fleet growth, though secondhand sale and purchase and demolitio ...
Monday, 25 April 16
CHINESE STEEL PRICE SURGE NOT SUSTAINABLE - FITCH
The rapid increase in Chinese steel prices so far this year is not sustainable, as it is largely due to a seasonal pick-up in construction and elev ...
Monday, 25 April 16
WEEKLY CS (I) COAL INDICES END ALMOST FLAT
COALspot.com: Average 5000 GAR coal index of Indonesian origin up 0.05 percent week over week to averaging $38.67 per ton on this past Friday, acco ...
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- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- SMG Consultants - Indonesia
- Ambuja Cements Ltd - India
- Oldendorff Carriers - Singapore
- Sakthi Sugars Limited - India
- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- Sree Jayajothi Cements Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Planning Commission, India
- Anglo American - United Kingdom
- Holcim Trading Pte Ltd - Singapore
- IEA Clean Coal Centre - UK
- Kepco SPC Power Corporation, Philippines
- Wilmar Investment Holdings
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement - Thailand
- Thai Mozambique Logistica
- Uttam Galva Steels Limited - India
- South Luzon Thermal Energy Corporation
- Indogreen Group - Indonesia
- Global Coal Blending Company Limited - Australia
- Makarim & Taira - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Jorong Barutama Greston.PT - Indonesia
- Heidelberg Cement - Germany
- Latin American Coal - Colombia
- Meenaskhi Energy Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Pendopo Energi Batubara - Indonesia
- MS Steel International - UAE
- Sarangani Energy Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Romanian Commodities Exchange
- Ministry of Mines - Canada
- Straits Asia Resources Limited - Singapore
- Petron Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parliament of New Zealand
- Australian Coal Association
- Kumho Petrochemical, South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parry Sugars Refinery, India
- Edison Trading Spa - Italy
- Globalindo Alam Lestari - Indonesia
- Indika Energy - Indonesia
- Siam City Cement PLC, Thailand
- Ind-Barath Power Infra Limited - India
- Mintek Dendrill Indonesia
- Commonwealth Bank - Australia
- Chamber of Mines of South Africa
- Jindal Steel & Power Ltd - India
- Indonesian Coal Mining Association
- Global Business Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Star Paper Mills Limited - India
- Electricity Authority, New Zealand
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- International Coal Ventures Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Electricity Generating Authority of Thailand
- Antam Resourcindo - Indonesia
- Manunggal Multi Energi - Indonesia
- VISA Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bahari Cakrawala Sebuku - Indonesia
- London Commodity Brokers - England
- Sical Logistics Limited - India
- European Bulk Services B.V. - Netherlands
- Larsen & Toubro Limited - India
- Tamil Nadu electricity Board
- Intertek Mineral Services - Indonesia
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- Posco Energy - South Korea
- Independent Power Producers Association of India
- Economic Council, Georgia
- Ministry of Finance - Indonesia
- Eastern Coal Council - USA
- GVK Power & Infra Limited - India
- Carbofer General Trading SA - India
- Kobexindo Tractors - Indoneisa
- Medco Energi Mining Internasional
- Standard Chartered Bank - UAE
- Bukit Makmur.PT - Indonesia
- Mjunction Services Limited - India
- Simpson Spence & Young - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Attock Cement Pakistan Limited
- Sindya Power Generating Company Private Ltd
- Bhushan Steel Limited - India
- IHS Mccloskey Coal Group - USA
- Vedanta Resources Plc - India
- PowerSource Philippines DevCo
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Georgia Ports Authority, United States
- Cement Manufacturers Association - India
- TNB Fuel Sdn Bhd - Malaysia
- Meralco Power Generation, Philippines
- Jaiprakash Power Ventures ltd
- The State Trading Corporation of India Ltd
- White Energy Company Limited
- Minerals Council of Australia
- Essar Steel Hazira Ltd - India
- Orica Australia Pty. Ltd.
- New Zealand Coal & Carbon
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Indo Tambangraya Megah - Indonesia
- OPG Power Generation Pvt Ltd - India
- Australian Commodity Traders Exchange
- Maheswari Brothers Coal Limited - India
- AsiaOL BioFuels Corp., Philippines
- Asmin Koalindo Tuhup - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Mercuria Energy - Indonesia
- McConnell Dowell - Australia
- Coal and Oil Company - UAE
- GMR Energy Limited - India
- Kartika Selabumi Mining - Indonesia
- SMC Global Power, Philippines
- Port Waratah Coal Services - Australia
- Madhucon Powers Ltd - India
- Gujarat Sidhee Cement - India
- CIMB Investment Bank - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Renaissance Capital - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Xindia Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Agrawal Coal Company - India
- Bangladesh Power Developement Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Electricity Authority - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Energy - Thailand
- Borneo Indobara - Indonesia
- Semirara Mining Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Lanco Infratech Ltd - India
- Dalmia Cement Bharat India
- Semirara Mining and Power Corporation, Philippines
- Thiess Contractors Indonesia
- Energy Development Corp, Philippines
- Africa Commodities Group - South Africa
- The University of Queensland
- Price Waterhouse Coopers - Russia
- Vizag Seaport Private Limited - India
- Rio Tinto Coal - Australia
- Indian Energy Exchange, India
- Interocean Group of Companies - India
- Salva Resources Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Central Java Power - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bharathi Cement Corporation - India
- Marubeni Corporation - India
- SN Aboitiz Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Toyota Tsusho Corporation, Japan
- Kalimantan Lumbung Energi - Indonesia
- Altura Mining Limited, Indonesia
- India Bulls Power Limited - India
- Tata Chemicals Ltd - India
- Bhatia International Limited - India
- Merrill Lynch Commodities Europe
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Singapore Mercantile Exchange
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Goldman Sachs - Singapore
- Ministry of Transport, Egypt
- Trasteel International SA, Italy
- Baramulti Group, Indonesia
- TeaM Sual Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Power Finance Corporation Ltd., India
- Sojitz Corporation - Japan
- Indian Oil Corporation Limited
- Malabar Cements Ltd - India
- CNBM International Corporation - China
- Videocon Industries ltd - India
- Grasim Industreis Ltd - India
- PTC India Limited - India
- Savvy Resources Ltd - HongKong
- ASAPP Information Group - India
- Barasentosa Lestari - Indonesia
- Mercator Lines Limited - India
- Coastal Gujarat Power Limited - India
- Formosa Plastics Group - Taiwan
- Kapuas Tunggal Persada - Indonesia
- Aditya Birla Group - India
- Banpu Public Company Limited - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Chettinad Cement Corporation Ltd - India
- Deloitte Consulting - India
- San Jose City I Power Corp, Philippines
- Karaikal Port Pvt Ltd - India
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