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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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Sunday, 19 October 14
LOW DEMAND PUSHES DOWN COAL FREIGHT RATES; VOLATILITY CONTINUES
COALspot.com: This week all the segments softened including BDI except for Panamax index.
The BDI was down by1.70 pct and clsoed at 944 points ...
Friday, 17 October 14
INTERNATIONAL COAL PRICES ARE AT LOWEST LEVEL; COAL STOCKS AT INDIAN POWER PLANTS ARE ALSO AT LOWEST LEVEL
International coal prices as well as coal freights are falling and reaching to its lowest levels. According to PTI, fuel stockpiles at the thermal ...
Friday, 17 October 14
U.S. COAL PRODUCTION UP BY 3.6% WEEK - ON - WEEK
COALspot.com – United States the world's one of largest coal producers, produced approximately 19.20 million short tons (mmst) of coal in ...
Friday, 17 October 14
DRY BULK SHIPPING'S OUTLOOK NOW SHIFTING TO A LESS PROMISING ONE, SHIP PRICES EXPECTED TO FOLLOW SOON - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
China’s and other Asian countries’ return to the dry bulk market last week, didn’t trigger the hoped support towards the dry bulk ...
Thursday, 16 October 14
KOREA MIDLAND POWER TO BUY 490K MT OF LCV COAL FOR 1Q 2015
COALspot.com : Korea Midland Power Co., Ltd. has invited bids through International open bidding for 490,000 Metric Tons (MT) of LCV (Sub) Bitumino ...
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- Maheswari Brothers Coal Limited - India
- Eastern Coal Council - USA
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Minerals Council of Australia
- PowerSource Philippines DevCo
- Africa Commodities Group - South Africa
- Globalindo Alam Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Vedanta Resources Plc - India
- ASAPP Information Group - India
- Lanco Infratech Ltd - India
- Ministry of Mines - Canada
- Kobexindo Tractors - Indoneisa
- Samtan Co., Ltd - South Korea
- Trasteel International SA, Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Oil Corporation Limited
- Energy Development Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- London Commodity Brokers - England
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- Energy Link Ltd, New Zealand
- Barasentosa Lestari - Indonesia
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- Medco Energi Mining Internasional
- Binh Thuan Hamico - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Central Electricity Authority - India
- GAC Shipping (India) Pvt Ltd
- Straits Asia Resources Limited - Singapore
- Wilmar Investment Holdings
- Manunggal Multi Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Star Paper Mills Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Baiduri Energy - Indonesia
- Sical Logistics Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Carbofer General Trading SA - India
- TNB Fuel Sdn Bhd - Malaysia
- SN Aboitiz Power Inc, Philippines
- MS Steel International - UAE
- Antam Resourcindo - Indonesia
- PTC India Limited - India
- Standard Chartered Bank - UAE
- Sakthi Sugars Limited - India
- Sarangani Energy Corporation, Philippines
- Aditya Birla Group - India
- Goldman Sachs - Singapore
- Oldendorff Carriers - Singapore
- Agrawal Coal Company - India
- Sindya Power Generating Company Private Ltd
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Ind-Barath Power Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- Thai Mozambique Logistica
- Directorate Of Revenue Intelligence - India
- Orica Mining Services - Indonesia
- VISA Power Limited - India
- Metalloyd Limited - United Kingdom
- Orica Australia Pty. Ltd.
- Power Finance Corporation Ltd., India
- Global Green Power PLC Corporation, Philippines
- White Energy Company Limited
- Madhucon Powers Ltd - India
- Ambuja Cements Ltd - India
- Cement Manufacturers Association - India
- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- Kumho Petrochemical, South Korea
- Alfred C Toepfer International GmbH - Germany
- Ministry of Finance - Indonesia
- Romanian Commodities Exchange
- SMG Consultants - Indonesia
- Australian Coal Association
- Port Waratah Coal Services - Australia
- Bangladesh Power Developement Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- IEA Clean Coal Centre - UK
- Ceylon Electricity Board - Sri Lanka
- Global Business Power Corporation, Philippines
- Planning Commission, India
- Vijayanagar Sugar Pvt Ltd - India
- Central Java Power - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Price Waterhouse Coopers - Russia
- PetroVietnam Power Coal Import and Supply Company
- Bharathi Cement Corporation - India
- CNBM International Corporation - China
- Tata Chemicals Ltd - India
- South Luzon Thermal Energy Corporation
- Grasim Industreis Ltd - India
- Indika Energy - Indonesia
- McConnell Dowell - Australia
- Coalindo Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Siam City Cement PLC, Thailand
- PNOC Exploration Corporation - Philippines
- New Zealand Coal & Carbon
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
- Singapore Mercantile Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Mintek Dendrill Indonesia
- Iligan Light & Power Inc, Philippines
- Meralco Power Generation, Philippines
- TeaM Sual Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Indonesian Coal Mining Association
- Vizag Seaport Private Limited - India
- Wood Mackenzie - Singapore
- ICICI Bank Limited - India
- India Bulls Power Limited - India
- Indian Energy Exchange, India
- Banpu Public Company Limited - Thailand
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- CIMB Investment Bank - Malaysia
- Pendopo Energi Batubara - Indonesia
- Savvy Resources Ltd - HongKong
- Chamber of Mines of South Africa
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Attock Cement Pakistan Limited
- Kohat Cement Company Ltd. - Pakistan
- Baramulti Group, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Salva Resources Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- Sojitz Corporation - Japan
- Anglo American - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- LBH Netherlands Bv - Netherlands
- Parry Sugars Refinery, India
- Petron Corporation, Philippines
- Indogreen Group - Indonesia
- Karaikal Port Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Makarim & Taira - Indonesia
- Siam City Cement - Thailand
- International Coal Ventures Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Coal and Oil Company - UAE
- Bayan Resources Tbk. - Indonesia
- Renaissance Capital - South Africa
- Australian Commodity Traders Exchange
- The Treasury - Australian Government
- Intertek Mineral Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Merrill Lynch Commodities Europe
- Simpson Spence & Young - Indonesia
- Thiess Contractors Indonesia
- Electricity Authority, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coastal Gujarat Power Limited - India
- Xindia Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Leighton Contractors Pty Ltd - Australia
- Independent Power Producers Association of India
- Asmin Koalindo Tuhup - Indonesia
- Bhoruka Overseas - Indonesia
- Commonwealth Bank - Australia
- Billiton Holdings Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Riau Bara Harum - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The University of Queensland
- Bhatia International Limited - India
- Heidelberg Cement - Germany
- Kideco Jaya Agung - Indonesia
- Mjunction Services Limited - India
- Kartika Selabumi Mining - Indonesia
- Georgia Ports Authority, United States
- Aboitiz Power Corporation - Philippines
- Deloitte Consulting - India
- Ministry of Transport, Egypt
- Parliament of New Zealand
- Bukit Makmur.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Dalmia Cement Bharat India
- Latin American Coal - Colombia
- Gujarat Sidhee Cement - India
- GVK Power & Infra Limited - India
- Edison Trading Spa - Italy
- AsiaOL BioFuels Corp., Philippines
- Interocean Group of Companies - India
- GMR Energy Limited - India
- Jindal Steel & Power Ltd - India
- Essar Steel Hazira Ltd - India
- Rio Tinto Coal - Australia
- Cigading International Bulk Terminal - Indonesia
- Mercuria Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- Kalimantan Lumbung Energi - Indonesia
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