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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, 29 April 14
Q4 SUB-BIT INDONESIA COAL SWAP CLOSED US$ 1.07 HIGHER COMPARED TO Q2 DELIVERY PRICE
COALspot.com: Indonesian coal swaps for average Q2’ 2014 gain on month and on week according to AsiaClear OTC coal swap's reports rele ...
Tuesday, 29 April 14
NEWCASTLE SHIPPED 3.03 MILLION TONS WEEK ON WEEK
COALspot.com: In the week ended 07:00 hours 28 April 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensl ...
Tuesday, 29 April 14
Q2 API 8 CFR SOUTH CHINA COAL SWAP LOST 0.29% MONTH ON MONTH
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 deliveries lost 0.29 percent month on month and closed at US$ 75.43 per mt as o ...
Monday, 28 April 14
CHINA LIKELY TO FALL SHORT OF NUCLEAR POWER TARGETS AT 175GW OF CAPACITY BY 2030 - WOOD MACKENZIE
Coal will remain dominant supply at 64% of power mix
Wood Mackenzie forecasts that China will not meet its environmentally-driven, government ...
Sunday, 27 April 14
INDONESIA TO INDIA FREIGHT RATES ARE EXPECTED TO BE STEADY NEXT WEEK
COALspot.com: The freight market seems to have bottomed out and saw some marginal gains in all segments, said Capt. Reddy of Vistaar Shipping In ...
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- Planning Commission, India
- Antam Resourcindo - Indonesia
- SN Aboitiz Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- TeaM Sual Corporation - Philippines
- Thai Mozambique Logistica
- GAC Shipping (India) Pvt Ltd
- Sindya Power Generating Company Private Ltd
- Heidelberg Cement - Germany
- Aboitiz Power Corporation - Philippines
- Energy Link Ltd, New Zealand
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- India Bulls Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Binh Thuan Hamico - Vietnam
- Madhucon Powers Ltd - India
- Orica Australia Pty. Ltd.
- McConnell Dowell - Australia
- Bulk Trading Sa - Switzerland
- Meenaskhi Energy Private Limited - India
- Parliament of New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- ASAPP Information Group - India
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- Directorate Of Revenue Intelligence - India
- Tamil Nadu electricity Board
- Karaikal Port Pvt Ltd - India
- MS Steel International - UAE
- Ceylon Electricity Board - Sri Lanka
- Jorong Barutama Greston.PT - Indonesia
- Indogreen Group - Indonesia
- Merrill Lynch Commodities Europe
- Commonwealth Bank - Australia
- Krishnapatnam Port Company Ltd. - India
- International Coal Ventures Pvt Ltd - India
- Parry Sugars Refinery, India
- Leighton Contractors Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Standard Chartered Bank - UAE
- Neyveli Lignite Corporation Ltd, - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Coal Blending Company Limited - Australia
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- Larsen & Toubro Limited - India
- Ambuja Cements Ltd - India
- Lanco Infratech Ltd - India
- Samtan Co., Ltd - South Korea
- Indika Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Agrawal Coal Company - India
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- SMG Consultants - Indonesia
- PNOC Exploration Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Port Waratah Coal Services - Australia
- Edison Trading Spa - Italy
- Straits Asia Resources Limited - Singapore
- OPG Power Generation Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Australian Commodity Traders Exchange
- Latin American Coal - Colombia
- SMC Global Power, Philippines
- Deloitte Consulting - India
- Economic Council, Georgia
- Maheswari Brothers Coal Limited - India
- Gujarat Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Malabar Cements Ltd - India
- New Zealand Coal & Carbon
- Bank of Tokyo Mitsubishi UFJ Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Barasentosa Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kartika Selabumi Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Salva Resources Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- LBH Netherlands Bv - Netherlands
- Kideco Jaya Agung - Indonesia
- Timah Investasi Mineral - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Sojitz Corporation - Japan
- Therma Luzon, Inc, Philippines
- Global Business Power Corporation, Philippines
- Posco Energy - South Korea
- Goldman Sachs - Singapore
- Holcim Trading Pte Ltd - Singapore
- Eastern Coal Council - USA
- Toyota Tsusho Corporation, Japan
- Electricity Authority, New Zealand
- Makarim & Taira - Indonesia
- Bhatia International Limited - India
- Semirara Mining and Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Pendopo Energi Batubara - Indonesia
- White Energy Company Limited
- Mjunction Services Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- ICICI Bank Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mintek Dendrill Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Price Waterhouse Coopers - Russia
- AsiaOL BioFuels Corp., Philippines
- Miang Besar Coal Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- CNBM International Corporation - China
- Eastern Energy - Thailand
- Sinarmas Energy and Mining - Indonesia
- Medco Energi Mining Internasional
- Trasteel International SA, Italy
- Central Java Power - Indonesia
- Minerals Council of Australia
- The Treasury - Australian Government
- Sarangani Energy Corporation, Philippines
- Kumho Petrochemical, South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Georgia Ports Authority, United States
- Kapuas Tunggal Persada - Indonesia
- Indo Tambangraya Megah - Indonesia
- GVK Power & Infra Limited - India
- Vedanta Resources Plc - India
- Interocean Group of Companies - India
- San Jose City I Power Corp, Philippines
- Singapore Mercantile Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- IEA Clean Coal Centre - UK
- Altura Mining Limited, Indonesia
- GMR Energy Limited - India
- Indian Energy Exchange, India
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Jindal Steel & Power Ltd - India
- Australian Coal Association
- Iligan Light & Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Formosa Plastics Group - Taiwan
- PetroVietnam Power Coal Import and Supply Company
- Meralco Power Generation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Wilmar Investment Holdings
- Baramulti Group, Indonesia
- Siam City Cement PLC, Thailand
- PTC India Limited - India
- Ministry of Mines - Canada
- Savvy Resources Ltd - HongKong
- VISA Power Limited - India
- Ministry of Finance - Indonesia
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- The University of Queensland
- Thiess Contractors Indonesia
- Gujarat Sidhee Cement - India
- Rio Tinto Coal - Australia
- Borneo Indobara - Indonesia
- Sakthi Sugars Limited - India
- Mercuria Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Star Paper Mills Limited - India
- Cement Manufacturers Association - India
- London Commodity Brokers - England
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
- Sical Logistics Limited - India
- South Luzon Thermal Energy Corporation
- Kohat Cement Company Ltd. - Pakistan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Grasim Industreis Ltd - India
- Global Green Power PLC Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Petron Corporation, Philippines
- Vizag Seaport Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Indonesian Coal Mining Association
- Mercator Lines Limited - India
- Chettinad Cement Corporation Ltd - India
- Bayan Resources Tbk. - Indonesia
- Coalindo Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Videocon Industries ltd - India
- Attock Cement Pakistan Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Coastal Gujarat Power Limited - India
- Kaltim Prima Coal - Indonesia
- Anglo American - United Kingdom
- Simpson Spence & Young - Indonesia
- Tata Chemicals Ltd - India
- Ind-Barath Power Infra Limited - India
- Power Finance Corporation Ltd., India
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Transport, Egypt
- Wood Mackenzie - Singapore
- European Bulk Services B.V. - Netherlands
- Indian Oil Corporation Limited
- Chamber of Mines of South Africa
- Orica Mining Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- Energy Development Corp, Philippines
- Xindia Steels Limited - India
- Uttam Galva Steels Limited - India
- PowerSource Philippines DevCo
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