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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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Tuesday, 07 October 14
API 8 CFR SOUTH CHINA COAL SWAP HEADED SOUTH
COALspot.com: API 8 CFR South China Coal swap for delivery in November 2014 decreased US$ 1.10 (-1.64%) month over month and US$ 0.25 (-0.38%) ...
Monday, 06 October 14
' COAL-BY-WIRE' FROM SUMATRA TO JAVA - THE JAKARTA POST
Coal from the island of Sumatra accounts for most of Indonesia’s low-grade lignite, a low-quality coal that receives a poor price in internat ...
Monday, 06 October 14
THE IRON ORE SHIPPING BUSINESS IS FACING SOME ROUGH SEAS - EAST ASIA FORUM
The impact of Chinese demand on global iron ore prices is well known. A less acknowledged consequence of China’s emergence is the transformat ...
Sunday, 05 October 14
BALTIC DRY INDEX SLIPS 1.14%; BALTIC PANAMAX INDEX GAINED 9.91% WEEK ON WEEK
COALspot.com: The BDI was down by 1.14 pct and closed at 1037 points this Friday.
The Cape index was down significantly week on week or lost 5 ...
Friday, 03 October 14
U.S. WEEKLY COAL PRODUCTION UP 5.8% TO 19.9 MMST
COALspot.com – United States the world's one of largest coal producers, produced approximately 19.9 million short tons (mmst) of co ...
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- PetroVietnam Power Coal Import and Supply Company
- London Commodity Brokers - England
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Marubeni Corporation - India
- Formosa Plastics Group - Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Heidelberg Cement - Germany
- Ministry of Mines - Canada
- Posco Energy - South Korea
- GAC Shipping (India) Pvt Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kohat Cement Company Ltd. - Pakistan
- Thai Mozambique Logistica
- Energy Link Ltd, New Zealand
- Cement Manufacturers Association - India
- VISA Power Limited - India
- McConnell Dowell - Australia
- PNOC Exploration Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Barasentosa Lestari - Indonesia
- GVK Power & Infra Limited - India
- PTC India Limited - India
- Petron Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
- Cigading International Bulk Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Savvy Resources Ltd - HongKong
- Central Electricity Authority - India
- San Jose City I Power Corp, Philippines
- Ministry of Transport, Egypt
- SMC Global Power, Philippines
- Sojitz Corporation - Japan
- South Luzon Thermal Energy Corporation
- GN Power Mariveles Coal Plant, Philippines
- Global Business Power Corporation, Philippines
- SMG Consultants - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- White Energy Company Limited
- Coal and Oil Company - UAE
- The Treasury - Australian Government
- Latin American Coal - Colombia
- Maharashtra Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- GMR Energy Limited - India
- Planning Commission, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Toyota Tsusho Corporation, Japan
- Kobexindo Tractors - Indoneisa
- IHS Mccloskey Coal Group - USA
- Essar Steel Hazira Ltd - India
- Africa Commodities Group - South Africa
- Ind-Barath Power Infra Limited - India
- Standard Chartered Bank - UAE
- Rio Tinto Coal - Australia
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- Mintek Dendrill Indonesia
- Carbofer General Trading SA - India
- Lanco Infratech Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Baramulti Group, Indonesia
- Larsen & Toubro Limited - India
- IEA Clean Coal Centre - UK
- Romanian Commodities Exchange
- Directorate Of Revenue Intelligence - India
- Global Green Power PLC Corporation, Philippines
- Wilmar Investment Holdings
- Parry Sugars Refinery, India
- Indian Energy Exchange, India
- PowerSource Philippines DevCo
- Samtan Co., Ltd - South Korea
- Sindya Power Generating Company Private Ltd
- Orica Mining Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Kartika Selabumi Mining - Indonesia
- Singapore Mercantile Exchange
- Indogreen Group - Indonesia
- Trasteel International SA, Italy
- Bukit Makmur.PT - Indonesia
- Videocon Industries ltd - India
- European Bulk Services B.V. - Netherlands
- Parliament of New Zealand
- OPG Power Generation Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Vizag Seaport Private Limited - India
- Grasim Industreis Ltd - India
- Mjunction Services Limited - India
- ICICI Bank Limited - India
- Mercuria Energy - Indonesia
- Power Finance Corporation Ltd., India
- Medco Energi Mining Internasional
- Price Waterhouse Coopers - Russia
- Neyveli Lignite Corporation Ltd, - India
- Bangladesh Power Developement Board
- Georgia Ports Authority, United States
- Alfred C Toepfer International GmbH - Germany
- Antam Resourcindo - Indonesia
- Intertek Mineral Services - Indonesia
- Tamil Nadu electricity Board
- Australian Coal Association
- Bukit Baiduri Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Uttam Galva Steels Limited - India
- Economic Council, Georgia
- Manunggal Multi Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bhatia International Limited - India
- Pendopo Energi Batubara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement PLC, Thailand
- Edison Trading Spa - Italy
- Riau Bara Harum - Indonesia
- Meralco Power Generation, Philippines
- Jindal Steel & Power Ltd - India
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Sical Logistics Limited - India
- Vedanta Resources Plc - India
- Pipit Mutiara Jaya. PT, Indonesia
- Simpson Spence & Young - Indonesia
- Eastern Coal Council - USA
- MS Steel International - UAE
- India Bulls Power Limited - India
- Indonesian Coal Mining Association
- Timah Investasi Mineral - Indoneisa
- Minerals Council of Australia
- Indian Oil Corporation Limited
- Bharathi Cement Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Independent Power Producers Association of India
- Xindia Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Coalindo Energy - Indonesia
- Interocean Group of Companies - India
- Therma Luzon, Inc, Philippines
- Chamber of Mines of South Africa
- Banpu Public Company Limited - Thailand
- Gujarat Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Thiess Contractors Indonesia
- Kaltim Prima Coal - Indonesia
- Goldman Sachs - Singapore
- Sakthi Sugars Limited - India
- CIMB Investment Bank - Malaysia
- Oldendorff Carriers - Singapore
- Ambuja Cements Ltd - India
- New Zealand Coal & Carbon
- Altura Mining Limited, Indonesia
- Maheswari Brothers Coal Limited - India
- Energy Development Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Siam City Cement - Thailand
- Mercator Lines Limited - India
- Ceylon Electricity Board - Sri Lanka
- Madhucon Powers Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Orica Australia Pty. Ltd.
- Commonwealth Bank - Australia
- Rashtriya Ispat Nigam Limited - India
- Electricity Generating Authority of Thailand
- Sinarmas Energy and Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Anglo American - United Kingdom
- Electricity Authority, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Renaissance Capital - South Africa
- Aditya Birla Group - India
- Merrill Lynch Commodities Europe
- Star Paper Mills Limited - India
- ASAPP Information Group - India
- Deloitte Consulting - India
- Jorong Barutama Greston.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bhushan Steel Limited - India
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- Karbindo Abesyapradhi - Indoneisa
- CNBM International Corporation - China
- Krishnapatnam Port Company Ltd. - India
- Ministry of Finance - Indonesia
- Global Coal Blending Company Limited - Australia
- Eastern Energy - Thailand
- Billiton Holdings Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- International Coal Ventures Pvt Ltd - India
- Attock Cement Pakistan Limited
- Agrawal Coal Company - India
- The State Trading Corporation of India Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Wood Mackenzie - Singapore
- TeaM Sual Corporation - Philippines
- Port Waratah Coal Services - Australia
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Malabar Cements Ltd - India
- Salva Resources Pvt Ltd - India
- Indika Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kideco Jaya Agung - Indonesia
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