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