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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, 21 September 15
KOMIPO OF KOREA INVITES BIDS FOR BITUMINOUS COAL
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender for 390,000 Metric Tons (MT) of minimum 4,600 kcal ...
Sunday, 20 September 15
BALTIC CAPE INDEX ROSE 66.52 PER CENT AND STAND NOW AT 1995 POINTS
COALspot.com: The BDI (Baltic Dry Index) rose 17.35 per cent week over week to 960 points on Friday mainly driven by the Capesize segment. The Cape ...
Friday, 18 September 15
SHIPPING AND THE FED RATE DECISION: FINANCING COSTS COULD RISE EVEN HIGHER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Regardless of the FED’s decision to raise rates, shipping stands to be influenced by the decision. Shipbroker Allied Shipbroking noted this w ...
Friday, 18 September 15
U.S. COAL PRODUCTION DECLINED 6.7 PER CENT W-W: EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 17.4 million shor ...
Thursday, 17 September 15
COALSPOT HAS LAUNCHED NEW THERMAL COAL INDICES FOR INDONESIAN COAL
COALspot.com has today launched real-time CS (i) Coal Indices.
The Indices represents 3800 kcal/kg GAR, 4200 kcal/kg GAR, 5000 kcal/kg GAR a ...
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- The State Trading Corporation of India Ltd
- Siam City Cement - Thailand
- Kartika Selabumi Mining - Indonesia
- Gujarat Sidhee Cement - India
- Sindya Power Generating Company Private Ltd
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- European Bulk Services B.V. - Netherlands
- Standard Chartered Bank - UAE
- Jindal Steel & Power Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- San Jose City I Power Corp, Philippines
- Kideco Jaya Agung - Indonesia
- South Luzon Thermal Energy Corporation
- Indika Energy - Indonesia
- Altura Mining Limited, Indonesia
- Siam City Cement PLC, Thailand
- Energy Development Corp, Philippines
- Planning Commission, India
- Ministry of Mines - Canada
- Malabar Cements Ltd - India
- ICICI Bank Limited - India
- SMC Global Power, Philippines
- International Coal Ventures Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Gujarat Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Australian Coal Association
- Krishnapatnam Port Company Ltd. - India
- Power Finance Corporation Ltd., India
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- Offshore Bulk Terminal Pte Ltd, Singapore
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- Bhatia International Limited - India
- Latin American Coal - Colombia
- Petrochimia International Co. Ltd.- Taiwan
- Global Coal Blending Company Limited - Australia
- Simpson Spence & Young - Indonesia
- Bharathi Cement Corporation - India
- Mercator Lines Limited - India
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- Romanian Commodities Exchange
- Bulk Trading Sa - Switzerland
- Ministry of Finance - Indonesia
- Energy Link Ltd, New Zealand
- Thiess Contractors Indonesia
- Barasentosa Lestari - Indonesia
- Rio Tinto Coal - Australia
- Vizag Seaport Private Limited - India
- Meralco Power Generation, Philippines
- Wilmar Investment Holdings
- Salva Resources Pvt Ltd - India
- Ministry of Transport, Egypt
- MS Steel International - UAE
- Riau Bara Harum - Indonesia
- CIMB Investment Bank - Malaysia
- Indo Tambangraya Megah - Indonesia
- Aditya Birla Group - India
- SN Aboitiz Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Goldman Sachs - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- GN Power Mariveles Coal Plant, Philippines
- Kepco SPC Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Jaiprakash Power Ventures ltd
- The Treasury - Australian Government
- Rashtriya Ispat Nigam Limited - India
- Binh Thuan Hamico - Vietnam
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- Merrill Lynch Commodities Europe
- Central Java Power - Indonesia
- Aboitiz Power Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Coal and Oil Company - UAE
- Bukit Makmur.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Intertek Mineral Services - Indonesia
- Mercuria Energy - Indonesia
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- Bayan Resources Tbk. - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- Madhucon Powers Ltd - India
- Kaltim Prima Coal - Indonesia
- Coalindo Energy - Indonesia
- Posco Energy - South Korea
- Sical Logistics Limited - India
- Orica Mining Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- CNBM International Corporation - China
- Carbofer General Trading SA - India
- Eastern Coal Council - USA
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- Straits Asia Resources Limited - Singapore
- Pendopo Energi Batubara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Tata Chemicals Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Parry Sugars Refinery, India
- Iligan Light & Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
- Price Waterhouse Coopers - Russia
- PNOC Exploration Corporation - Philippines
- Minerals Council of Australia
- Videocon Industries ltd - India
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Asmin Koalindo Tuhup - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Global Green Power PLC Corporation, Philippines
- VISA Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- Anglo American - United Kingdom
- McConnell Dowell - Australia
- India Bulls Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Marubeni Corporation - India
- Interocean Group of Companies - India
- Petron Corporation, Philippines
- Commonwealth Bank - Australia
- Economic Council, Georgia
- Orica Australia Pty. Ltd.
- Semirara Mining and Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- Port Waratah Coal Services - Australia
- Deloitte Consulting - India
- Kohat Cement Company Ltd. - Pakistan
- Kumho Petrochemical, South Korea
- Ind-Barath Power Infra Limited - India
- Coastal Gujarat Power Limited - India
- Meenaskhi Energy Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Uttam Galva Steels Limited - India
- SMG Consultants - Indonesia
- LBH Netherlands Bv - Netherlands
- Global Business Power Corporation, Philippines
- Wood Mackenzie - Singapore
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- Manunggal Multi Energi - Indonesia
- Central Electricity Authority - India
- Renaissance Capital - South Africa
- Vedanta Resources Plc - India
- Star Paper Mills Limited - India
- Trasteel International SA, Italy
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- Dalmia Cement Bharat India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Xindia Steels Limited - India
- Electricity Authority, New Zealand
- OPG Power Generation Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Metalloyd Limited - United Kingdom
- PTC India Limited - India
- Sakthi Sugars Limited - India
- Sree Jayajothi Cements Limited - India
- Agrawal Coal Company - India
- Sojitz Corporation - Japan
- The University of Queensland
- Karbindo Abesyapradhi - Indoneisa
- Australian Commodity Traders Exchange
- Borneo Indobara - Indonesia
- ASAPP Information Group - India
- Parliament of New Zealand
- Ambuja Cements Ltd - India
- GVK Power & Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Medco Energi Mining Internasional
- Bangladesh Power Developement Board
- Globalindo Alam Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Chamber of Mines of South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Mjunction Services Limited - India
- White Energy Company Limited
- Attock Cement Pakistan Limited
- Cement Manufacturers Association - India
- TeaM Sual Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- GMR Energy Limited - India
- Heidelberg Cement - Germany
- Therma Luzon, Inc, Philippines
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- Lanco Infratech Ltd - India
- Indonesian Coal Mining Association
- IEA Clean Coal Centre - UK
- Samtan Co., Ltd - South Korea
- Bhushan Steel Limited - India
- AsiaOL BioFuels Corp., Philippines
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