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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, 18 April 16
INDONESIAN 5000 GAR COAL INDEX DECLINE 1.43 PERCENT WEEK OVER WEEK - CS (I) COAL INDEX
COALspot.com: Average 5000 GAR coal index of Indonesian origin fell 1.43 percent week over week to averaging $38.65 per ton on this past Friday, ac ...
Monday, 18 April 16
SOUTH KOREA STATE-OWNED UTILITY KOMIPO INVITES COAL BIDS FOR BORYEONG POWER PLANT
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a new tender for 70,000 Metric Tons of 4,600 kcal/kg NAR coal for ...
Monday, 18 April 16
SOUTH AFRICA RB1 COAL HAS LOST GROUND IN INDIA; RB2 MAY LOSE GRIP IF THE PRICE CROSSES US$ 50 A TON - TRADERS
COALspot.com: Indian coal consumers preferred to buy South Africa RB2 coal instead of RB1 coal recent months due to RB2's low CFR price level. ...
Monday, 18 April 16
CAPESIZE INDEX ROSE 44.66 PER CENT WEEK OVER WEEK
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities continued to rose this week.
The freight market was ...
Friday, 15 April 16
PANAMAX MARKET CONTINUES TO FIRM - FEARNLEYS
Cape
It has been a positive freight market for the past few weeks, however, this week the market is taking a small breather, says Fearnleys in it ...
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- Economic Council, Georgia
- Kartika Selabumi Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Bharathi Cement Corporation - India
- Port Waratah Coal Services - Australia
- Kohat Cement Company Ltd. - Pakistan
- Makarim & Taira - Indonesia
- India Bulls Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- Electricity Authority, New Zealand
- Rio Tinto Coal - Australia
- Maharashtra Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- GAC Shipping (India) Pvt Ltd
- Merrill Lynch Commodities Europe
- Power Finance Corporation Ltd., India
- Trasteel International SA, Italy
- Eastern Coal Council - USA
- Lanco Infratech Ltd - India
- Mercator Lines Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Iligan Light & Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Australian Coal Association
- Marubeni Corporation - India
- Gujarat Sidhee Cement - India
- Energy Link Ltd, New Zealand
- Bangladesh Power Developement Board
- Africa Commodities Group - South Africa
- Meralco Power Generation, Philippines
- Global Business Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Indian Oil Corporation Limited
- TeaM Sual Corporation - Philippines
- Orica Mining Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Simpson Spence & Young - Indonesia
- Dalmia Cement Bharat India
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Borneo Indobara - Indonesia
- Price Waterhouse Coopers - Russia
- IEA Clean Coal Centre - UK
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- Sindya Power Generating Company Private Ltd
- Indian Energy Exchange, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- Vijayanagar Sugar Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Jorong Barutama Greston.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Thai Mozambique Logistica
- Chettinad Cement Corporation Ltd - India
- Posco Energy - South Korea
- Metalloyd Limited - United Kingdom
- Goldman Sachs - Singapore
- Holcim Trading Pte Ltd - Singapore
- SN Aboitiz Power Inc, Philippines
- Edison Trading Spa - Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Latin American Coal - Colombia
- Wood Mackenzie - Singapore
- Globalindo Alam Lestari - Indonesia
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining and Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Indika Energy - Indonesia
- Sakthi Sugars Limited - India
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- GVK Power & Infra Limited - India
- London Commodity Brokers - England
- Semirara Mining Corp, Philippines
- Minerals Council of Australia
- Mjunction Services Limited - India
- Siam City Cement - Thailand
- South Luzon Thermal Energy Corporation
- Global Coal Blending Company Limited - Australia
- SMC Global Power, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Jindal Steel & Power Ltd - India
- Riau Bara Harum - Indonesia
- Singapore Mercantile Exchange
- Straits Asia Resources Limited - Singapore
- PetroVietnam Power Coal Import and Supply Company
- OPG Power Generation Pvt Ltd - India
- Carbofer General Trading SA - India
- Toyota Tsusho Corporation, Japan
- Formosa Plastics Group - Taiwan
- Xindia Steels Limited - India
- Anglo American - United Kingdom
- Central Electricity Authority - India
- Coal and Oil Company - UAE
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Maheswari Brothers Coal Limited - India
- Petron Corporation, Philippines
- Jaiprakash Power Ventures ltd
- CNBM International Corporation - China
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- Meenaskhi Energy Private Limited - India
- San Jose City I Power Corp, Philippines
- Coastal Gujarat Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Romanian Commodities Exchange
- Central Java Power - Indonesia
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Georgia Ports Authority, United States
- Medco Energi Mining Internasional
- McConnell Dowell - Australia
- Bhoruka Overseas - Indonesia
- VISA Power Limited - India
- European Bulk Services B.V. - Netherlands
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- Sarangani Energy Corporation, Philippines
- Baramulti Group, Indonesia
- Ministry of Finance - Indonesia
- Mintek Dendrill Indonesia
- Kapuas Tunggal Persada - Indonesia
- Uttam Galva Steels Limited - India
- New Zealand Coal & Carbon
- Vizag Seaport Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Bukit Baiduri Energy - Indonesia
- SMG Consultants - Indonesia
- Australian Commodity Traders Exchange
- Indogreen Group - Indonesia
- Mercuria Energy - Indonesia
- Deloitte Consulting - India
- Renaissance Capital - South Africa
- International Coal Ventures Pvt Ltd - India
- Bhushan Steel Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- The Treasury - Australian Government
- Timah Investasi Mineral - Indoneisa
- Ministry of Mines - Canada
- IHS Mccloskey Coal Group - USA
- Vedanta Resources Plc - India
- Bhatia International Limited - India
- Rashtriya Ispat Nigam Limited - India
- GMR Energy Limited - India
- Malabar Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Sojitz Corporation - Japan
- Ambuja Cements Ltd - India
- Videocon Industries ltd - India
- Standard Chartered Bank - UAE
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Sree Jayajothi Cements Limited - India
- Cement Manufacturers Association - India
- Aboitiz Power Corporation - Philippines
- Heidelberg Cement - Germany
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- Billiton Holdings Pty Ltd - Australia
- PowerSource Philippines DevCo
- Interocean Group of Companies - India
- Independent Power Producers Association of India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- Larsen & Toubro Limited - India
- Manunggal Multi Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Commonwealth Bank - Australia
- Ind-Barath Power Infra Limited - India
- Kumho Petrochemical, South Korea
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- Intertek Mineral Services - Indonesia
- Attock Cement Pakistan Limited
- Electricity Generating Authority of Thailand
- White Energy Company Limited
- Asmin Koalindo Tuhup - Indonesia
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- The University of Queensland
- Eastern Energy - Thailand
- Madhucon Powers Ltd - India
- Ministry of Transport, Egypt
- Therma Luzon, Inc, Philippines
- Parliament of New Zealand
- Global Green Power PLC Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- ICICI Bank Limited - India
- Alfred C Toepfer International GmbH - Germany
- Krishnapatnam Port Company Ltd. - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- PNOC Exploration Corporation - Philippines
- Planning Commission, India
- Antam Resourcindo - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chamber of Mines of South Africa
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