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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, 18 August 14
SUB-BIT FOB INDONESIA COAL SWAP CLOSED AT $58.60 FOR SEPTEMBER 2015; UP $4 FROM SEPTEMBER 2014 CLOSING
COALspot.com: Indonesian coal swaps for average September 2014 decreased US$ 0.15 (-0.27%) day on day and US$ 0.75 (-1.36%) per mt week on week. Th ...
Monday, 18 August 14
CFR SOUTH CHINA COAL SWAP PERFORMED WELL THIS PAST WEEK
COALspot.com: API 8 CFR South China Coal swap for delivery in September 2014 increased US$ 0.45 (+0.66%) day on day and US$ 0.30 (+0.44%)&nbs ...
Saturday, 16 August 14
HIGH DEMAND OF IRON ORE SHIPMENTS PUSHED CAPE INDEX UPWARDS
COALspot.com: This week's freight market was buoyant with Cape and panamax index seeing a big jump pushing the BDI above 1,000 points week on c ...
Friday, 15 August 14
5TH ANNUAL POWER AND ELECTRICITY INDONESIA
5TH ANNUAL POWER AND ELECTRICITY INDONESIA
13-16 October 2014
Grand Hyatt Jakarta, Indonesia
Web Site
The country’s definitive ...
Thursday, 14 August 14
U.S. STEAM COAL IMPORTS REMAIN DOWN SHARPLY FROM HISTORIC HIGH IN 2007, SAYS EIA
COALspot.com: U.S. steam coal imports at power plants have fallen significantly from their peak level of more than 30 million tons in 2007 to less ...
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- Manunggal Multi Energi - Indonesia
- White Energy Company Limited
- Kalimantan Lumbung Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- GVK Power & Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- ICICI Bank Limited - India
- Commonwealth Bank - Australia
- Mintek Dendrill Indonesia
- IEA Clean Coal Centre - UK
- Therma Luzon, Inc, Philippines
- Bhushan Steel Limited - India
- Indonesian Coal Mining Association
- Directorate General of MIneral and Coal - Indonesia
- Makarim & Taira - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Altura Mining Limited, Indonesia
- LBH Netherlands Bv - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Timah Investasi Mineral - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aboitiz Power Corporation - Philippines
- Power Finance Corporation Ltd., India
- Larsen & Toubro Limited - India
- Baramulti Group, Indonesia
- Meralco Power Generation, Philippines
- Energy Development Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- Semirara Mining Corp, Philippines
- VISA Power Limited - India
- Kobexindo Tractors - Indoneisa
- Medco Energi Mining Internasional
- The State Trading Corporation of India Ltd
- Pendopo Energi Batubara - Indonesia
- San Jose City I Power Corp, Philippines
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- Standard Chartered Bank - UAE
- Eastern Coal Council - USA
- Maheswari Brothers Coal Limited - India
- Binh Thuan Hamico - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Coal and Oil Company - UAE
- Kaltim Prima Coal - Indonesia
- SMC Global Power, Philippines
- Barasentosa Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Bhoruka Overseas - Indonesia
- Parry Sugars Refinery, India
- Oldendorff Carriers - Singapore
- Vizag Seaport Private Limited - India
- Petron Corporation, Philippines
- Deloitte Consulting - India
- Uttam Galva Steels Limited - India
- Indika Energy - Indonesia
- Wood Mackenzie - Singapore
- Samtan Co., Ltd - South Korea
- Posco Energy - South Korea
- Agrawal Coal Company - India
- Ambuja Cements Ltd - India
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Vedanta Resources Plc - India
- Madhucon Powers Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Price Waterhouse Coopers - Russia
- GN Power Mariveles Coal Plant, Philippines
- McConnell Dowell - Australia
- European Bulk Services B.V. - Netherlands
- Indian Energy Exchange, India
- Sarangani Energy Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- CIMB Investment Bank - Malaysia
- Straits Asia Resources Limited - Singapore
- Ministry of Transport, Egypt
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Asmin Koalindo Tuhup - Indonesia
- Xindia Steels Limited - India
- Simpson Spence & Young - Indonesia
- London Commodity Brokers - England
- Goldman Sachs - Singapore
- Tamil Nadu electricity Board
- Tata Chemicals Ltd - India
- Economic Council, Georgia
- Eastern Energy - Thailand
- Sinarmas Energy and Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Orica Mining Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Meenaskhi Energy Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- Bukit Makmur.PT - Indonesia
- Antam Resourcindo - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Dalmia Cement Bharat India
- Thai Mozambique Logistica
- Grasim Industreis Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Kepco SPC Power Corporation, Philippines
- Parliament of New Zealand
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- Banpu Public Company Limited - Thailand
- South Luzon Thermal Energy Corporation
- Edison Trading Spa - Italy
- Karaikal Port Pvt Ltd - India
- Planning Commission, India
- Sree Jayajothi Cements Limited - India
- Chamber of Mines of South Africa
- Toyota Tsusho Corporation, Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Minerals Council of Australia
- Sojitz Corporation - Japan
- Port Waratah Coal Services - Australia
- Anglo American - United Kingdom
- Mjunction Services Limited - India
- Holcim Trading Pte Ltd - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Malabar Cements Ltd - India
- Ministry of Finance - Indonesia
- Ceylon Electricity Board - Sri Lanka
- TeaM Sual Corporation - Philippines
- Riau Bara Harum - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Borneo Indobara - Indonesia
- The University of Queensland
- Indo Tambangraya Megah - Indonesia
- GMR Energy Limited - India
- Bayan Resources Tbk. - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Romanian Commodities Exchange
- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
- Krishnapatnam Port Company Ltd. - India
- Australian Coal Association
- International Coal Ventures Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Singapore Mercantile Exchange
- Global Business Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Sical Logistics Limited - India
- CNBM International Corporation - China
- Siam City Cement - Thailand
- MS Steel International - UAE
- Georgia Ports Authority, United States
- New Zealand Coal & Carbon
- Gujarat Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Central Electricity Authority - India
- PowerSource Philippines DevCo
- India Bulls Power Limited - India
- Latin American Coal - Colombia
- Renaissance Capital - South Africa
- Essar Steel Hazira Ltd - India
- Africa Commodities Group - South Africa
- Indian Oil Corporation Limited
- Coalindo Energy - Indonesia
- Siam City Cement PLC, Thailand
- Iligan Light & Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- GAC Shipping (India) Pvt Ltd
- Marubeni Corporation - India
- Bhatia International Limited - India
- Heidelberg Cement - Germany
- Indogreen Group - Indonesia
- Kumho Petrochemical, South Korea
- Central Java Power - Indonesia
- Wilmar Investment Holdings
- Bahari Cakrawala Sebuku - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- Global Green Power PLC Corporation, Philippines
- Videocon Industries ltd - India
- Lanco Infratech Ltd - India
- Savvy Resources Ltd - HongKong
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- Mercator Lines Limited - India
- Independent Power Producers Association of India
- Salva Resources Pvt Ltd - India
- Bangladesh Power Developement Board
- Bharathi Cement Corporation - India
- Thiess Contractors Indonesia
- Mercuria Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Carbofer General Trading SA - India
- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
- Rio Tinto Coal - Australia
- PetroVietnam Power Coal Import and Supply Company
- Sakthi Sugars Limited - India
- Sindya Power Generating Company Private Ltd
- Attock Cement Pakistan Limited
- Formosa Plastics Group - Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PTC India Limited - India
- Cement Manufacturers Association - India
- SMG Consultants - Indonesia
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
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