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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, 07 July 14
RBCT, THE WORLD'S SINGLE LARGEST EXPORT COAL TERMINAL SHIPPED 31.91 MMT OF COAL IN H1 2014
COALspot.com: South Africa's Richards Bay Coal Terminal (RBCT) the world’s single largest export coal terminal, shipped 31.91 million ton ...
Monday, 07 July 14
SOUTH AFRICA'S RICHARDS BAY COAL TERMINAL SHIPPED 12% LESS COAL IN JUNE COMPARED TO MAY EXPORTS
COALspot.com: South Africa's Richards Bay Coal Terminal (RBCT) the world’s single largest export coal terminal, shipped 4.91 million tons ...
Monday, 07 July 14
INDONESIAN SUB-BIT COAL SWAPS FOR Q3 DELIVERY CRASHES THROUGH $ 54.50
COALspot.com: Indonesian coal swaps for average Q3’ 2014 lost on day, week and on month according to AsiaClear OTC coal swap's reports re ...
Monday, 07 July 14
API 8 CFR SOUTH CHINA COAL SWAPS SHOW A DOWNWARD TREND THIS PAST WEEK
COALspot.com: API 8 CFR South China Coal swap for delivery in Q3 drops US$ 5.47 month on month on Friday, dipping under $68 a ton. The CFR South Ch ...
Sunday, 06 July 14
PANAMAX INDEX BEING THE BIGGEST GAINER THIS WEEK; UP 52.75% W-O-W
COALspot.com: This week there was some positive signs in all the sectors. The Panamax index being the biggest gainer this week after losing for sev ...
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- Coalindo Energy - Indonesia
- Chamber of Mines of South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- Simpson Spence & Young - Indonesia
- Australian Coal Association
- Gujarat Mineral Development Corp Ltd - India
- ASAPP Information Group - India
- GAC Shipping (India) Pvt Ltd
- Bhoruka Overseas - Indonesia
- Standard Chartered Bank - UAE
- Kobexindo Tractors - Indoneisa
- The University of Queensland
- Savvy Resources Ltd - HongKong
- PNOC Exploration Corporation - Philippines
- Meralco Power Generation, Philippines
- South Luzon Thermal Energy Corporation
- Global Green Power PLC Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Rio Tinto Coal - Australia
- Ambuja Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Planning Commission, India
- Bharathi Cement Corporation - India
- Kumho Petrochemical, South Korea
- Holcim Trading Pte Ltd - Singapore
- Indian Energy Exchange, India
- Australian Commodity Traders Exchange
- Global Business Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Semirara Mining and Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Indonesian Coal Mining Association
- Chettinad Cement Corporation Ltd - India
- Xindia Steels Limited - India
- London Commodity Brokers - England
- Miang Besar Coal Terminal - Indonesia
- Mjunction Services Limited - India
- Videocon Industries ltd - India
- Bhushan Steel Limited - India
- Metalloyd Limited - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- Therma Luzon, Inc, Philippines
- Makarim & Taira - Indonesia
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- IEA Clean Coal Centre - UK
- SN Aboitiz Power Inc, Philippines
- Independent Power Producers Association of India
- Altura Mining Limited, Indonesia
- Agrawal Coal Company - India
- Aboitiz Power Corporation - Philippines
- Dalmia Cement Bharat India
- TeaM Sual Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Jindal Steel & Power Ltd - India
- Romanian Commodities Exchange
- Sojitz Corporation - Japan
- VISA Power Limited - India
- Energy Development Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Minerals Council of Australia
- Global Coal Blending Company Limited - Australia
- Jorong Barutama Greston.PT - Indonesia
- PTC India Limited - India
- International Coal Ventures Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Attock Cement Pakistan Limited
- Star Paper Mills Limited - India
- Wilmar Investment Holdings
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kaltim Prima Coal - Indonesia
- Economic Council, Georgia
- San Jose City I Power Corp, Philippines
- Heidelberg Cement - Germany
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- Essar Steel Hazira Ltd - India
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Sree Jayajothi Cements Limited - India
- Electricity Authority, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Carbofer General Trading SA - India
- Neyveli Lignite Corporation Ltd, - India
- Bukit Makmur.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Intertek Mineral Services - Indonesia
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- Ministry of Transport, Egypt
- Siam City Cement PLC, Thailand
- Kohat Cement Company Ltd. - Pakistan
- McConnell Dowell - Australia
- Banpu Public Company Limited - Thailand
- Marubeni Corporation - India
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Parry Sugars Refinery, India
- Trasteel International SA, Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- PetroVietnam Power Coal Import and Supply Company
- Wood Mackenzie - Singapore
- Edison Trading Spa - Italy
- Gujarat Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Sakthi Sugars Limited - India
- Mercator Lines Limited - India
- Posco Energy - South Korea
- MS Steel International - UAE
- Latin American Coal - Colombia
- GN Power Mariveles Coal Plant, Philippines
- Goldman Sachs - Singapore
- Coal and Oil Company - UAE
- Merrill Lynch Commodities Europe
- Madhucon Powers Ltd - India
- Kepco SPC Power Corporation, Philippines
- ICICI Bank Limited - India
- Antam Resourcindo - Indonesia
- Bayan Resources Tbk. - Indonesia
- Thiess Contractors Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Manunggal Multi Energi - Indonesia
- Thai Mozambique Logistica
- Ministry of Finance - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- Energy Link Ltd, New Zealand
- Barasentosa Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Tamil Nadu electricity Board
- Straits Asia Resources Limited - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- White Energy Company Limited
- GMR Energy Limited - India
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Price Waterhouse Coopers - Russia
- Ministry of Mines - Canada
- Meenaskhi Energy Private Limited - India
- Cement Manufacturers Association - India
- Ind-Barath Power Infra Limited - India
- Eastern Coal Council - USA
- Bhatia International Limited - India
- Lanco Infratech Ltd - India
- Bangladesh Power Developement Board
- Deloitte Consulting - India
- SMC Global Power, Philippines
- Renaissance Capital - South Africa
- Jaiprakash Power Ventures ltd
- Anglo American - United Kingdom
- Eastern Energy - Thailand
- Indo Tambangraya Megah - Indonesia
- Maheswari Brothers Coal Limited - India
- Grasim Industreis Ltd - India
- Sarangani Energy Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Larsen & Toubro Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bukit Baiduri Energy - Indonesia
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- Siam City Cement - Thailand
- Leighton Contractors Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Mercuria Energy - Indonesia
- Aditya Birla Group - India
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- European Bulk Services B.V. - Netherlands
- Central Java Power - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Petron Corporation, Philippines
- Vizag Seaport Private Limited - India
- Sindya Power Generating Company Private Ltd
- The Treasury - Australian Government
- Binh Thuan Hamico - Vietnam
- Georgia Ports Authority, United States
- Directorate Of Revenue Intelligence - India
- The State Trading Corporation of India Ltd
- Sical Logistics Limited - India
- AsiaOL BioFuels Corp., Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Borneo Indobara - Indonesia
- Uttam Galva Steels Limited - India
- Indogreen Group - Indonesia
- India Bulls Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Power Finance Corporation Ltd., India
- Interocean Group of Companies - India
- Salva Resources Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Mintek Dendrill Indonesia
- Kartika Selabumi Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Gujarat Sidhee Cement - India
- Globalindo Alam Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Port Waratah Coal Services - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Asam (Persero) Tbk - Indonesia
- Tata Chemicals Ltd - India
- Orica Mining Services - Indonesia
- Baramulti Group, Indonesia
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
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