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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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Wednesday, 08 January 14
SHIPPING: THE ABSOLUTE BOTTOM OF THE CYCLE WAS REACHED AND PASSED - GEORGE LAZARIDIS
COALspot.com: To many in the industry 2013 has been the turning point in the market where the absolute bottom of the cycle was reached and passed.
...
Tuesday, 07 January 14
INDONESIA RAISES COAL PRICE THIS MONTH
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia has increased government declared coal bench mark price by US$ 1.59 / MT ...
Tuesday, 07 January 14
NEWCASTLE COAL TERMINAL'S COAL EXPORTS SLIDE TO 3.54 MMT W/E 30 DECEMBER 13
COALspot.com: In the week ended December 30, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 3.54 ...
Tuesday, 07 January 14
US COAL OUTPUT SLIDES 9 PCT WEEK ON WEEK, EIA SAYS
COALspot.com – United States the world’s second largest coal producer, produced approximately 17.8 million short tons (mmst) of coal in ...
Monday, 06 January 14
ARGUS LAUNCHES SPOT CFR EAST COAST INDIA COAL ASSESSMENTS
COALspot.com: Global energy and commodity news and price reporting agency Argus has announced today that, the company has launched CFR coal assessme ...
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- Sree Jayajothi Cements Limited - India
- Grasim Industreis Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Thai Mozambique Logistica
- Aboitiz Power Corporation - Philippines
- Marubeni Corporation - India
- IEA Clean Coal Centre - UK
- Parliament of New Zealand
- ICICI Bank Limited - India
- GMR Energy Limited - India
- Commonwealth Bank - Australia
- MS Steel International - UAE
- Orica Mining Services - Indonesia
- Formosa Plastics Group - Taiwan
- Ministry of Mines - Canada
- Meralco Power Generation, Philippines
- Power Finance Corporation Ltd., India
- Chamber of Mines of South Africa
- Global Business Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- The University of Queensland
- Indika Energy - Indonesia
- Port Waratah Coal Services - Australia
- Energy Development Corp, Philippines
- Electricity Generating Authority of Thailand
- Timah Investasi Mineral - Indoneisa
- Global Coal Blending Company Limited - Australia
- Australian Coal Association
- Vizag Seaport Private Limited - India
- VISA Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Iligan Light & Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Borneo Indobara - Indonesia
- Goldman Sachs - Singapore
- Madhucon Powers Ltd - India
- Bukit Baiduri Energy - Indonesia
- Price Waterhouse Coopers - Russia
- ASAPP Information Group - India
- Riau Bara Harum - Indonesia
- Mercuria Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- GVK Power & Infra Limited - India
- SMC Global Power, Philippines
- Sical Logistics Limited - India
- Malabar Cements Ltd - India
- Agrawal Coal Company - India
- Interocean Group of Companies - India
- Bhatia International Limited - India
- The Treasury - Australian Government
- Electricity Authority, New Zealand
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Cement Manufacturers Association - India
- Kohat Cement Company Ltd. - Pakistan
- Barasentosa Lestari - Indonesia
- Anglo American - United Kingdom
- Banpu Public Company Limited - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- LBH Netherlands Bv - Netherlands
- Dalmia Cement Bharat India
- Independent Power Producers Association of India
- Energy Link Ltd, New Zealand
- Indonesian Coal Mining Association
- Samtan Co., Ltd - South Korea
- Indian Oil Corporation Limited
- Planning Commission, India
- Parry Sugars Refinery, India
- Minerals Council of Australia
- Attock Cement Pakistan Limited
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Xindia Steels Limited - India
- White Energy Company Limited
- Ind-Barath Power Infra Limited - India
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Toyota Tsusho Corporation, Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Eastern Energy - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Gujarat Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Siam City Cement - Thailand
- Makarim & Taira - Indonesia
- Kaltim Prima Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- San Jose City I Power Corp, Philippines
- Ministry of Transport, Egypt
- Petrochimia International Co. Ltd.- Taiwan
- London Commodity Brokers - England
- Indo Tambangraya Megah - Indonesia
- Jaiprakash Power Ventures ltd
- Ministry of Finance - Indonesia
- Mercator Lines Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Renaissance Capital - South Africa
- Coastal Gujarat Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Trasteel International SA, Italy
- Neyveli Lignite Corporation Ltd, - India
- Romanian Commodities Exchange
- Australian Commodity Traders Exchange
- Lanco Infratech Ltd - India
- Thiess Contractors Indonesia
- PNOC Exploration Corporation - Philippines
- Wood Mackenzie - Singapore
- Bhoruka Overseas - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Metalloyd Limited - United Kingdom
- Uttam Galva Steels Limited - India
- Bulk Trading Sa - Switzerland
- Kapuas Tunggal Persada - Indonesia
- Therma Luzon, Inc, Philippines
- PTC India Limited - India
- Bharathi Cement Corporation - India
- Larsen & Toubro Limited - India
- Oldendorff Carriers - Singapore
- Kartika Selabumi Mining - Indonesia
- Star Paper Mills Limited - India
- AsiaOL BioFuels Corp., Philippines
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- OPG Power Generation Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Manunggal Multi Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Rio Tinto Coal - Australia
- Central Electricity Authority - India
- Savvy Resources Ltd - HongKong
- Directorate General of MIneral and Coal - Indonesia
- Economic Council, Georgia
- Leighton Contractors Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- Baramulti Group, Indonesia
- India Bulls Power Limited - India
- Globalindo Alam Lestari - Indonesia
- SMG Consultants - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- European Bulk Services B.V. - Netherlands
- PowerSource Philippines DevCo
- Alfred C Toepfer International GmbH - Germany
- TeaM Sual Corporation - Philippines
- The State Trading Corporation of India Ltd
- Heidelberg Cement - Germany
- Wilmar Investment Holdings
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- Gujarat Sidhee Cement - India
- Standard Chartered Bank - UAE
- Pendopo Energi Batubara - Indonesia
- Latin American Coal - Colombia
- Bukit Asam (Persero) Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Bhushan Steel Limited - India
- CNBM International Corporation - China
- Singapore Mercantile Exchange
- Tata Chemicals Ltd - India
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Central Java Power - Indonesia
- Sindya Power Generating Company Private Ltd
- Sakthi Sugars Limited - India
- Mjunction Services Limited - India
- Kumho Petrochemical, South Korea
- New Zealand Coal & Carbon
- Tamil Nadu electricity Board
- International Coal Ventures Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Antam Resourcindo - Indonesia
- Siam City Cement PLC, Thailand
- Georgia Ports Authority, United States
- SN Aboitiz Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- Coalindo Energy - Indonesia
- Edison Trading Spa - Italy
- Meenaskhi Energy Private Limited - India
- Indian Energy Exchange, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- CIMB Investment Bank - Malaysia
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- Deloitte Consulting - India
- Africa Commodities Group - South Africa
- Carbofer General Trading SA - India
- GAC Shipping (India) Pvt Ltd
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
- Eastern Coal Council - USA
- Global Green Power PLC Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- McConnell Dowell - Australia
- Salva Resources Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
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