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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, 02 February 15
INDONESIA'S ADARO ENERGY PRODUCED 56.21 MILLION TONNES OF COAL IN 2014; UP 8% Y-O-Y
COALspot.com: PT. Adaro Energy, Indonesia’s largest coal producer, has increased coal production by 8% to 56.21 million tonnes (Mt) from both ...
Monday, 02 February 15
API 8 CFR SOUTH CHINA COAL SWAP PICKS UP W-O-W
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery declined US$ 0.81 (-1.36%) per MT month over month and gained US$ 0.18&nb ...
Monday, 02 February 15
SOUTH KOREA'S KOMIPO INVITES BIDS FOR 280K MT OF SUB-BITUMINOUS COAL
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender to buy total 280,000 MT of Sub-bituminous coal coa ...
Sunday, 01 February 15
INDONESIA-TO-INDIA COAL FREIGHT RATES REMAIN WEAK NEXT WEEK
COALspot.com: The BDI continued its fall reached lowest levels since 1986 this week.
The BDI declined 15.55 pct to 608 points on Friday 30, Ja ...
Friday, 30 January 15
CONTANGO AND TANKERS - SKULD
KNOWLEDGE TO ELEVATE
Like an invitation to a dance, the word contango may have some people flustered, but for tanker owners this market phenome ...
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- Salva Resources Pvt Ltd - India
- Chamber of Mines of South Africa
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- Wood Mackenzie - Singapore
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- Merrill Lynch Commodities Europe
- Gujarat Mineral Development Corp Ltd - India
- Mercator Lines Limited - India
- The State Trading Corporation of India Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- Meralco Power Generation, Philippines
- Ministry of Transport, Egypt
- LBH Netherlands Bv - Netherlands
- The Treasury - Australian Government
- GN Power Mariveles Coal Plant, Philippines
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- Global Green Power PLC Corporation, Philippines
- Makarim & Taira - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- International Coal Ventures Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Thiess Contractors Indonesia
- Siam City Cement - Thailand
- CNBM International Corporation - China
- Gujarat Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Petrochimia International Co. Ltd.- Taiwan
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- PNOC Exploration Corporation - Philippines
- Xindia Steels Limited - India
- Indian Oil Corporation Limited
- Singapore Mercantile Exchange
- Antam Resourcindo - Indonesia
- Ministry of Finance - Indonesia
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- ICICI Bank Limited - India
- Oldendorff Carriers - Singapore
- Africa Commodities Group - South Africa
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
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- Straits Asia Resources Limited - Singapore
- Formosa Plastics Group - Taiwan
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- Gujarat Sidhee Cement - India
- Medco Energi Mining Internasional
- Bhatia International Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Interocean Group of Companies - India
- Coal and Oil Company - UAE
- Carbofer General Trading SA - India
- Bharathi Cement Corporation - India
- Tamil Nadu electricity Board
- Romanian Commodities Exchange
- MS Steel International - UAE
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- Energy Link Ltd, New Zealand
- London Commodity Brokers - England
- Parliament of New Zealand
- South Luzon Thermal Energy Corporation
- Indo Tambangraya Megah - Indonesia
- Cement Manufacturers Association - India
- Vizag Seaport Private Limited - India
- Standard Chartered Bank - UAE
- TeaM Sual Corporation - Philippines
- Deloitte Consulting - India
- Sindya Power Generating Company Private Ltd
- Banpu Public Company Limited - Thailand
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- Savvy Resources Ltd - HongKong
- Australian Coal Association
- Sinarmas Energy and Mining - Indonesia
- Dalmia Cement Bharat India
- SMG Consultants - Indonesia
- Jaiprakash Power Ventures ltd
- Mercuria Energy - Indonesia
- Trasteel International SA, Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bukit Makmur.PT - Indonesia
- Eastern Energy - Thailand
- Kepco SPC Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Heidelberg Cement - Germany
- Central Electricity Authority - India
- Latin American Coal - Colombia
- Eastern Coal Council - USA
- Coalindo Energy - Indonesia
- Bhoruka Overseas - Indonesia
- European Bulk Services B.V. - Netherlands
- GVK Power & Infra Limited - India
- Planning Commission, India
- Ambuja Cements Ltd - India
- Marubeni Corporation - India
- SN Aboitiz Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- White Energy Company Limited
- Sojitz Corporation - Japan
- Aditya Birla Group - India
- Commonwealth Bank - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Videocon Industries ltd - India
- Tata Chemicals Ltd - India
- McConnell Dowell - Australia
- Asmin Koalindo Tuhup - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- ASAPP Information Group - India
- Samtan Co., Ltd - South Korea
- Sakthi Sugars Limited - India
- Borneo Indobara - Indonesia
- Altura Mining Limited, Indonesia
- Kaltim Prima Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate General of MIneral and Coal - Indonesia
- Bhushan Steel Limited - India
- India Bulls Power Limited - India
- Agrawal Coal Company - India
- Power Finance Corporation Ltd., India
- Grasim Industreis Ltd - India
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- Global Business Power Corporation, Philippines
- Indika Energy - Indonesia
- Sical Logistics Limited - India
- Therma Luzon, Inc, Philippines
- Orica Australia Pty. Ltd.
- Siam City Cement PLC, Thailand
- Attock Cement Pakistan Limited
- Directorate Of Revenue Intelligence - India
- PTC India Limited - India
- Sree Jayajothi Cements Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Kapuas Tunggal Persada - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- Goldman Sachs - Singapore
- Billiton Holdings Pty Ltd - Australia
- Renaissance Capital - South Africa
- Australian Commodity Traders Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Petron Corporation, Philippines
- Indian Energy Exchange, India
- Georgia Ports Authority, United States
- Electricity Authority, New Zealand
- Price Waterhouse Coopers - Russia
- Ind-Barath Power Infra Limited - India
- Jindal Steel & Power Ltd - India
- Coastal Gujarat Power Limited - India
- San Jose City I Power Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Central Java Power - Indonesia
- Maheswari Brothers Coal Limited - India
- The University of Queensland
- Barasentosa Lestari - Indonesia
- Bangladesh Power Developement Board
- Alfred C Toepfer International GmbH - Germany
- Economic Council, Georgia
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- Ministry of Mines - Canada
- Bayan Resources Tbk. - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Thai Mozambique Logistica
- Metalloyd Limited - United Kingdom
- Aboitiz Power Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Independent Power Producers Association of India
- New Zealand Coal & Carbon
- Mjunction Services Limited - India
- Uttam Galva Steels Limited - India
- Edison Trading Spa - Italy
- Intertek Mineral Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Indonesian Coal Mining Association
- Mintek Dendrill Indonesia
- IEA Clean Coal Centre - UK
- Bukit Baiduri Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Minerals Council of Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Development Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Wilmar Investment Holdings
- Essar Steel Hazira Ltd - India
- Semirara Mining and Power Corporation, Philippines
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