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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, 05 May 14
HUANENG CLEAN ENERGY RESEARCH INSTITUTE HAS CONFIRMED TO SPEAK AT CCF2014
Press Release: Produced by CDMC Events, The 13th Clean Coal Forum 2014 will be held on June 12,13, 2014 in Beijing, China. We are glad to invite ...
Monday, 05 May 14
SUB BIT-FOB INDONESIA COAL SWAPS LOST GROUND LAST WEEK
COALspot.com: Indonesian coal swaps for average Q3’ 2014 lost on day, week and on month according to AsiaClear OTC coal swap's reports ...
Monday, 05 May 14
API 8 CFR SOUTH CHINA COAL SWAP FOR AVERAGE Q3 14 DELIVERIES: LOST 0.82% M-O-M
COALspot.com: API 8 CFR South China Coal swaps for average Q3 14 deliveries lost 0.82 percent month on month and closed at US$ 75.20 per mt as o ...
Sunday, 04 May 14
INDONESIA TO INDIA FREIGHT RATES ARE SHOWING POSITIVE TREND
COALspot.com: The freight market is seems to be some recovery as cape index has increased by 7.84 pct week on week. Cape index closed at 1829 po ...
Friday, 02 May 14
ADARO ENERGY STARTS YEAR 2014 WELL DESPITE CURRENT MARKET CONDITIONS
COALspot.com: Adaro Energy, the second largest Indonesian coal miner's revenue increased 14% to US$ 845 million due to higher sales volume, ...
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- Energy Development Corp, Philippines
- Tamil Nadu electricity Board
- Coalindo Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Vedanta Resources Plc - India
- Gujarat Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Sakthi Sugars Limited - India
- Bayan Resources Tbk. - Indonesia
- Maheswari Brothers Coal Limited - India
- Indika Energy - Indonesia
- Parry Sugars Refinery, India
- Miang Besar Coal Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Bukit Makmur.PT - Indonesia
- Coastal Gujarat Power Limited - India
- The Treasury - Australian Government
- Tata Chemicals Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- SN Aboitiz Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- Bangladesh Power Developement Board
- Electricity Authority, New Zealand
- Edison Trading Spa - Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Lanco Infratech Ltd - India
- Planning Commission, India
- Manunggal Multi Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Uttam Galva Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Siam City Cement PLC, Thailand
- SMG Consultants - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Agrawal Coal Company - India
- Larsen & Toubro Limited - India
- Mercuria Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Ambuja Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sinarmas Energy and Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Minerals Council of Australia
- Power Finance Corporation Ltd., India
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- Orica Mining Services - Indonesia
- IHS Mccloskey Coal Group - USA
- Therma Luzon, Inc, Philippines
- Intertek Mineral Services - Indonesia
- GMR Energy Limited - India
- Baramulti Group, Indonesia
- Aditya Birla Group - India
- Ministry of Mines - Canada
- Kobexindo Tractors - Indoneisa
- Makarim & Taira - Indonesia
- Oldendorff Carriers - Singapore
- Malabar Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Energy - Thailand
- Energy Link Ltd, New Zealand
- London Commodity Brokers - England
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Romanian Commodities Exchange
- Iligan Light & Power Inc, Philippines
- PTC India Limited - India
- Merrill Lynch Commodities Europe
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Kideco Jaya Agung - Indonesia
- Altura Mining Limited, Indonesia
- Timah Investasi Mineral - Indoneisa
- European Bulk Services B.V. - Netherlands
- Aboitiz Power Corporation - Philippines
- Standard Chartered Bank - UAE
- Sical Logistics Limited - India
- Indonesian Coal Mining Association
- Sojitz Corporation - Japan
- Vizag Seaport Private Limited - India
- Global Coal Blending Company Limited - Australia
- Salva Resources Pvt Ltd - India
- Mjunction Services Limited - India
- Thiess Contractors Indonesia
- San Jose City I Power Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Medco Energi Mining Internasional
- Xindia Steels Limited - India
- Dalmia Cement Bharat India
- Antam Resourcindo - Indonesia
- Wilmar Investment Holdings
- South Luzon Thermal Energy Corporation
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Mintek Dendrill Indonesia
- CNBM International Corporation - China
- Heidelberg Cement - Germany
- Commonwealth Bank - Australia
- Chettinad Cement Corporation Ltd - India
- White Energy Company Limited
- Central Java Power - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Holcim Trading Pte Ltd - Singapore
- Posco Energy - South Korea
- Marubeni Corporation - India
- Straits Asia Resources Limited - Singapore
- The University of Queensland
- India Bulls Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Videocon Industries ltd - India
- Borneo Indobara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Petrochimia International Co. Ltd.- Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- Indogreen Group - Indonesia
- Georgia Ports Authority, United States
- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- ASAPP Information Group - India
- LBH Netherlands Bv - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Independent Power Producers Association of India
- Price Waterhouse Coopers - Russia
- Australian Commodity Traders Exchange
- The State Trading Corporation of India Ltd
- VISA Power Limited - India
- Riau Bara Harum - Indonesia
- New Zealand Coal & Carbon
- Attock Cement Pakistan Limited
- Africa Commodities Group - South Africa
- Bhushan Steel Limited - India
- Anglo American - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- Kartika Selabumi Mining - Indonesia
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- Global Green Power PLC Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Ministry of Transport, Egypt
- Rashtriya Ispat Nigam Limited - India
- Globalindo Alam Lestari - Indonesia
- Renaissance Capital - South Africa
- Siam City Cement - Thailand
- Kepco SPC Power Corporation, Philippines
- Indian Oil Corporation Limited
- Economic Council, Georgia
- Barasentosa Lestari - Indonesia
- Wood Mackenzie - Singapore
- Bhatia International Limited - India
- Australian Coal Association
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- Petron Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- Kumho Petrochemical, South Korea
- Madhucon Powers Ltd - India
- Electricity Generating Authority of Thailand
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- Sindya Power Generating Company Private Ltd
- Indian Energy Exchange, India
- McConnell Dowell - Australia
- Banpu Public Company Limited - Thailand
- Eastern Coal Council - USA
- Meenaskhi Energy Private Limited - India
- Global Business Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Grasim Industreis Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- Ceylon Electricity Board - Sri Lanka
- Carbofer General Trading SA - India
- Ministry of Finance - Indonesia
- Alfred C Toepfer International GmbH - Germany
- TeaM Sual Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Parliament of New Zealand
- Karaikal Port Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Bharathi Cement Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Indo Tambangraya Megah - Indonesia
- CIMB Investment Bank - Malaysia
- Samtan Co., Ltd - South Korea
- Thai Mozambique Logistica
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- PNOC Exploration Corporation - Philippines
- Coal and Oil Company - UAE
- ICICI Bank Limited - India
- Binh Thuan Hamico - Vietnam
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- SMC Global Power, Philippines
- Bulk Trading Sa - Switzerland
- MS Steel International - UAE
- Kaltim Prima Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Rio Tinto Coal - Australia
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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