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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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Friday, 30 May 14
US COAL PRODUCTION RELATIVELY FLAT WEEK ON WEEK
COALspot.com – United States the world's second largest coal producer, produced approximately 18.6 million short tons (mmst) of coal in a ...
Thursday, 29 May 14
PEABODY ENERGY CHAIRMAN RECEIVES WCA AWARD
The World Coal Association has presented Gregory H. Boyce, Chairman and Chief Executive Officer of Peabody Energy (NYSE: BTU), with the 2014 Chairm ...
Thursday, 29 May 14
HANDY : THE SUPRAS ARE BEING TRADED AROUND 13K FOR SHORTER UPTO 1 YEAR PERIOD
Handy
The week started off with bank holidays in London and very little happening. This trend has continued and we believe it will continue into ...
Wednesday, 28 May 14
THE DRY BULK MARKET REMAINED UNDER PRESSURE - INTERMODAL
COALspot.com: The Dry Bulk market remained under pressure during this past week, with all indices pointing down compared to the previous Friday. Th ...
Tuesday, 27 May 14
PORT OF NEWCASTLE SHIPPED 19.13% LESS COAL THIS PAST WEEK
COALspot.com: In the week ended 07:00 hours 26 May 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, ...
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- International Coal Ventures Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Deloitte Consulting - India
- Madhucon Powers Ltd - India
- Trasteel International SA, Italy
- Billiton Holdings Pty Ltd - Australia
- Minerals Council of Australia
- Leighton Contractors Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Rio Tinto Coal - Australia
- Petron Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Indogreen Group - Indonesia
- Bhushan Steel Limited - India
- IHS Mccloskey Coal Group - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Energy Exchange, India
- Renaissance Capital - South Africa
- Savvy Resources Ltd - HongKong
- Independent Power Producers Association of India
- Goldman Sachs - Singapore
- Xindia Steels Limited - India
- CIMB Investment Bank - Malaysia
- Georgia Ports Authority, United States
- Latin American Coal - Colombia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Therma Luzon, Inc, Philippines
- Parliament of New Zealand
- Samtan Co., Ltd - South Korea
- Kumho Petrochemical, South Korea
- Australian Commodity Traders Exchange
- Coal and Oil Company - UAE
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
- Sinarmas Energy and Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Indika Energy - Indonesia
- Parry Sugars Refinery, India
- The Treasury - Australian Government
- Neyveli Lignite Corporation Ltd, - India
- Price Waterhouse Coopers - Russia
- Bharathi Cement Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Global Business Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Planning Commission, India
- Agrawal Coal Company - India
- Mjunction Services Limited - India
- Singapore Mercantile Exchange
- GVK Power & Infra Limited - India
- Sojitz Corporation - Japan
- Bhatia International Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Eastern Coal Council - USA
- Bayan Resources Tbk. - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Posco Energy - South Korea
- Central Java Power - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- McConnell Dowell - Australia
- Jaiprakash Power Ventures ltd
- Siam City Cement - Thailand
- Alfred C Toepfer International GmbH - Germany
- VISA Power Limited - India
- Chettinad Cement Corporation Ltd - India
- New Zealand Coal & Carbon
- SN Aboitiz Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Bangladesh Power Developement Board
- Merrill Lynch Commodities Europe
- OPG Power Generation Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Wood Mackenzie - Singapore
- Maheswari Brothers Coal Limited - India
- GMR Energy Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMC Global Power, Philippines
- Wilmar Investment Holdings
- Mercator Lines Limited - India
- South Luzon Thermal Energy Corporation
- Globalindo Alam Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- MS Steel International - UAE
- Marubeni Corporation - India
- Ambuja Cements Ltd - India
- Star Paper Mills Limited - India
- Aditya Birla Group - India
- Edison Trading Spa - Italy
- Vijayanagar Sugar Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Economic Council, Georgia
- Eastern Energy - Thailand
- Altura Mining Limited, Indonesia
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bukit Makmur.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Coalindo Energy - Indonesia
- Indian Oil Corporation Limited
- TNB Fuel Sdn Bhd - Malaysia
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- Iligan Light & Power Inc, Philippines
- The University of Queensland
- Pendopo Energi Batubara - Indonesia
- London Commodity Brokers - England
- Vizag Seaport Private Limited - India
- Jindal Steel & Power Ltd - India
- PTC India Limited - India
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Energy Link Ltd, New Zealand
- ASAPP Information Group - India
- Krishnapatnam Port Company Ltd. - India
- Sical Logistics Limited - India
- Formosa Plastics Group - Taiwan
- Bhoruka Overseas - Indonesia
- GAC Shipping (India) Pvt Ltd
- Straits Asia Resources Limited - Singapore
- Barasentosa Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Dalmia Cement Bharat India
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Anglo American - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Attock Cement Pakistan Limited
- Gujarat Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- Sree Jayajothi Cements Limited - India
- Heidelberg Cement - Germany
- Cigading International Bulk Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Orica Mining Services - Indonesia
- Central Electricity Authority - India
- Commonwealth Bank - Australia
- Grasim Industreis Ltd - India
- Intertek Mineral Services - Indonesia
- Ministry of Transport, Egypt
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- Salva Resources Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Power Finance Corporation Ltd., India
- Oldendorff Carriers - Singapore
- Thai Mozambique Logistica
- Riau Bara Harum - Indonesia
- Essar Steel Hazira Ltd - India
- Sakthi Sugars Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercuria Energy - Indonesia
- ICICI Bank Limited - India
- Medco Energi Mining Internasional
- Manunggal Multi Energi - Indonesia
- CNBM International Corporation - China
- Holcim Trading Pte Ltd - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Uttam Galva Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Interocean Group of Companies - India
- Karaikal Port Pvt Ltd - India
- SMG Consultants - Indonesia
- Meralco Power Generation, Philippines
- Toyota Tsusho Corporation, Japan
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Authority, New Zealand
- Standard Chartered Bank - UAE
- Lanco Infratech Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Energy Development Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Port Waratah Coal Services - Australia
- Jorong Barutama Greston.PT - Indonesia
- Cement Manufacturers Association - India
- IEA Clean Coal Centre - UK
- Mintek Dendrill Indonesia
- Carbofer General Trading SA - India
- Simpson Spence & Young - Indonesia
- Kepco SPC Power Corporation, Philippines
- Africa Commodities Group - South Africa
- The State Trading Corporation of India Ltd
- LBH Netherlands Bv - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Electricity Generating Authority of Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Coal Blending Company Limited - Australia
- Tata Chemicals Ltd - India
- Kartika Selabumi Mining - Indonesia
- Romanian Commodities Exchange
- Meenaskhi Energy Private Limited - India
- Antam Resourcindo - Indonesia
- Malabar Cements Ltd - India
- Tamil Nadu electricity Board
- Indonesian Coal Mining Association
- White Energy Company Limited
- India Bulls Power Limited - India
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- Indo Tambangraya Megah - Indonesia
- San Jose City I Power Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Chamber of Mines of South Africa
- Borneo Indobara - Indonesia
- TeaM Sual Corporation - Philippines
- Ministry of Mines - Canada
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