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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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Friday, 31 July 15
CAPE'S PAPER MARKET REMAINS FIRM - INTERMODAL
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Wednesday, 29 July 15
Q1'16 FOB INDONESIA COAL SWAP CLOSED HIGHER THAN Q3'15
COALspot.com: Indonesian coal swap for delivery Q3 2015 declined month on month and gains week over week, this past week.
The Q3 swap was decl ...
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- Mercator Lines Limited - India
- Samtan Co., Ltd - South Korea
- SN Aboitiz Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- Global Green Power PLC Corporation, Philippines
- SMG Consultants - Indonesia
- Minerals Council of Australia
- Wilmar Investment Holdings
- Carbofer General Trading SA - India
- Coalindo Energy - Indonesia
- Commonwealth Bank - Australia
- Karaikal Port Pvt Ltd - India
- Energy Development Corp, Philippines
- Interocean Group of Companies - India
- Oldendorff Carriers - Singapore
- SMC Global Power, Philippines
- Parry Sugars Refinery, India
- Kumho Petrochemical, South Korea
- Bharathi Cement Corporation - India
- Petron Corporation, Philippines
- New Zealand Coal & Carbon
- Electricity Generating Authority of Thailand
- The State Trading Corporation of India Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cigading International Bulk Terminal - Indonesia
- GMR Energy Limited - India
- Aboitiz Power Corporation - Philippines
- MS Steel International - UAE
- Chamber of Mines of South Africa
- Rashtriya Ispat Nigam Limited - India
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- Orica Mining Services - Indonesia
- Metalloyd Limited - United Kingdom
- Energy Link Ltd, New Zealand
- LBH Netherlands Bv - Netherlands
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- Indian Oil Corporation Limited
- Power Finance Corporation Ltd., India
- Merrill Lynch Commodities Europe
- Billiton Holdings Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Salva Resources Pvt Ltd - India
- London Commodity Brokers - England
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- Global Business Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Posco Energy - South Korea
- Bhoruka Overseas - Indonesia
- Planning Commission, India
- Trasteel International SA, Italy
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- Thiess Contractors Indonesia
- Alfred C Toepfer International GmbH - Germany
- TNB Fuel Sdn Bhd - Malaysia
- Simpson Spence & Young - Indonesia
- Agrawal Coal Company - India
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- Sojitz Corporation - Japan
- Sakthi Sugars Limited - India
- Bhatia International Limited - India
- Ambuja Cements Ltd - India
- Xindia Steels Limited - India
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Indonesian Coal Mining Association
- Globalindo Alam Lestari - Indonesia
- Siam City Cement - Thailand
- Marubeni Corporation - India
- Anglo American - United Kingdom
- IEA Clean Coal Centre - UK
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The University of Queensland
- Semirara Mining Corp, Philippines
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
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- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
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- Offshore Bulk Terminal Pte Ltd, Singapore
- Georgia Ports Authority, United States
- Kalimantan Lumbung Energi - Indonesia
- Aditya Birla Group - India
- Global Coal Blending Company Limited - Australia
- Central Electricity Authority - India
- Kideco Jaya Agung - Indonesia
- Independent Power Producers Association of India
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- Savvy Resources Ltd - HongKong
- Meralco Power Generation, Philippines
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- Sical Logistics Limited - India
- Baramulti Group, Indonesia
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- Wood Mackenzie - Singapore
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- White Energy Company Limited
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- Mjunction Services Limited - India
- Thai Mozambique Logistica
- Rio Tinto Coal - Australia
- India Bulls Power Limited - India
- Attock Cement Pakistan Limited
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- Ministry of Transport, Egypt
- Gujarat Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Therma Luzon, Inc, Philippines
- CNBM International Corporation - China
- Eastern Energy - Thailand
- Electricity Authority, New Zealand
- Grasim Industreis Ltd - India
- Coastal Gujarat Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- CIMB Investment Bank - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Ceylon Electricity Board - Sri Lanka
- Borneo Indobara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kohat Cement Company Ltd. - Pakistan
- Uttam Galva Steels Limited - India
- San Jose City I Power Corp, Philippines
- Madhucon Powers Ltd - India
- Manunggal Multi Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- Holcim Trading Pte Ltd - Singapore
- Sree Jayajothi Cements Limited - India
- Tamil Nadu electricity Board
- Renaissance Capital - South Africa
- Africa Commodities Group - South Africa
- Intertek Mineral Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Cement Manufacturers Association - India
- Larsen & Toubro Limited - India
- Meenaskhi Energy Private Limited - India
- Bulk Trading Sa - Switzerland
- Economic Council, Georgia
- Directorate General of MIneral and Coal - Indonesia
- Latin American Coal - Colombia
- Directorate Of Revenue Intelligence - India
- AsiaOL BioFuels Corp., Philippines
- TeaM Sual Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Makarim & Taira - Indonesia
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- Indian Energy Exchange, India
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- Deloitte Consulting - India
- Siam City Cement PLC, Thailand
- Kobexindo Tractors - Indoneisa
- Toyota Tsusho Corporation, Japan
- PNOC Exploration Corporation - Philippines
- GVK Power & Infra Limited - India
- Malabar Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Altura Mining Limited, Indonesia
- Mercuria Energy - Indonesia
- Barasentosa Lestari - Indonesia
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- Gujarat Sidhee Cement - India
- PTC India Limited - India
- Bangladesh Power Developement Board
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- Petrochimia International Co. Ltd.- Taiwan
- Romanian Commodities Exchange
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- International Coal Ventures Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Formosa Plastics Group - Taiwan
- Mintek Dendrill Indonesia
- GAC Shipping (India) Pvt Ltd
- Edison Trading Spa - Italy
- Maharashtra Electricity Regulatory Commission - India
- Parliament of New Zealand
- PowerSource Philippines DevCo
- Riau Bara Harum - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Jindal Steel & Power Ltd - India
- Antam Resourcindo - Indonesia
- Indika Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Ministry of Mines - Canada
- Semirara Mining and Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Indo Tambangraya Megah - Indonesia
- Heidelberg Cement - Germany
- The Treasury - Australian Government
- Chettinad Cement Corporation Ltd - India
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