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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, 13 August 13
AUSTRALIA NEWCASTLE COAL EXPORTS JUMP 30.61 PERCENT ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 30.61 per cent week on week to 2.95 million mt for ...
Monday, 12 August 13
GBCE SUCCESSFUL IN UPGRADING LOW RANK INDONESIAN COAL ON INDUSTRIAL SCALE
COALspot.com : GB Clean Energy Ltd. (GBCE) has annoused that, the company has successfully upgraded 2,426 tonnes of low rank 4,018 kcal NAR Ind ...
Monday, 12 August 13
INDIA - SAFE SHIPMENT OF IRON ORE FINES FROM INDIAN PORTS - WEST OF ENGLAND P&I CLUB
As Members may be aware, in 2009 two ships, the ‘Asian Forest’ and the ‘Black Rose’, capsized and sank following the liquefa ...
Sunday, 11 August 13
INDONESIAN COAL SWAPS : FLAT ON DAY
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average Q4 2013 delivery flat on day due to holidays in Indonesia, Malaysia & ...
Sunday, 11 August 13
SUPRAMAX FREIGHT RATES FROM INDONESIA TO INDIA CONTINUED TO BE SOFT - VISTAAR
COALspot.com : The freight market was soft this week with all indices down , the reason could be long weekend holidays in Indonesia, Singapore and M ...
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- Barasentosa Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- International Coal Ventures Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Attock Cement Pakistan Limited
- ICICI Bank Limited - India
- Eastern Coal Council - USA
- European Bulk Services B.V. - Netherlands
- Borneo Indobara - Indonesia
- The Treasury - Australian Government
- Videocon Industries ltd - India
- Toyota Tsusho Corporation, Japan
- Electricity Generating Authority of Thailand
- Globalindo Alam Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Georgia Ports Authority, United States
- Parry Sugars Refinery, India
- GN Power Mariveles Coal Plant, Philippines
- Uttam Galva Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Energy Development Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Kobexindo Tractors - Indoneisa
- Samtan Co., Ltd - South Korea
- Jindal Steel & Power Ltd - India
- The State Trading Corporation of India Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- SMC Global Power, Philippines
- Agrawal Coal Company - India
- Energy Link Ltd, New Zealand
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- San Jose City I Power Corp, Philippines
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Minerals Council of Australia
- Petrochimia International Co. Ltd.- Taiwan
- Iligan Light & Power Inc, Philippines
- Coalindo Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- Rio Tinto Coal - Australia
- Wilmar Investment Holdings
- PTC India Limited - India
- Meralco Power Generation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mjunction Services Limited - India
- The University of Queensland
- Maharashtra Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- Vedanta Resources Plc - India
- Ind-Barath Power Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Malabar Cements Ltd - India
- Orica Australia Pty. Ltd.
- Savvy Resources Ltd - HongKong
- Therma Luzon, Inc, Philippines
- Altura Mining Limited, Indonesia
- Lanco Infratech Ltd - India
- Price Waterhouse Coopers - Russia
- Dalmia Cement Bharat India
- Kumho Petrochemical, South Korea
- MS Steel International - UAE
- GAC Shipping (India) Pvt Ltd
- Antam Resourcindo - Indonesia
- Planning Commission, India
- Kartika Selabumi Mining - Indonesia
- White Energy Company Limited
- SMG Consultants - Indonesia
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- LBH Netherlands Bv - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Mines - Canada
- Aboitiz Power Corporation - Philippines
- Makarim & Taira - Indonesia
- VISA Power Limited - India
- Oldendorff Carriers - Singapore
- Billiton Holdings Pty Ltd - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- Port Waratah Coal Services - Australia
- Ministry of Transport, Egypt
- Larsen & Toubro Limited - India
- Bulk Trading Sa - Switzerland
- Sical Logistics Limited - India
- Cement Manufacturers Association - India
- Carbofer General Trading SA - India
- IHS Mccloskey Coal Group - USA
- Salva Resources Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Tata Chemicals Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Miang Besar Coal Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indika Energy - Indonesia
- GMR Energy Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Makmur.PT - Indonesia
- Sojitz Corporation - Japan
- Heidelberg Cement - Germany
- Economic Council, Georgia
- Semirara Mining Corp, Philippines
- Sakthi Sugars Limited - India
- SN Aboitiz Power Inc, Philippines
- Interocean Group of Companies - India
- Sinarmas Energy and Mining - Indonesia
- Australian Coal Association
- Commonwealth Bank - Australia
- Leighton Contractors Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Renaissance Capital - South Africa
- Thai Mozambique Logistica
- Orica Mining Services - Indonesia
- Africa Commodities Group - South Africa
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- Wood Mackenzie - Singapore
- Gujarat Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Central Java Power - Indonesia
- Marubeni Corporation - India
- Merrill Lynch Commodities Europe
- PowerSource Philippines DevCo
- Kohat Cement Company Ltd. - Pakistan
- Meenaskhi Energy Private Limited - India
- PNOC Exploration Corporation - Philippines
- Parliament of New Zealand
- Gujarat Sidhee Cement - India
- Bhatia International Limited - India
- Edison Trading Spa - Italy
- Standard Chartered Bank - UAE
- Xindia Steels Limited - India
- Medco Energi Mining Internasional
- ASAPP Information Group - India
- Romanian Commodities Exchange
- Independent Power Producers Association of India
- Siam City Cement PLC, Thailand
- Simpson Spence & Young - Indonesia
- Eastern Energy - Thailand
- Central Electricity Authority - India
- IEA Clean Coal Centre - UK
- Alfred C Toepfer International GmbH - Germany
- Kepco SPC Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Latin American Coal - Colombia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Baramulti Group, Indonesia
- Bhushan Steel Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- London Commodity Brokers - England
- Intertek Mineral Services - Indonesia
- Jaiprakash Power Ventures ltd
- Australian Commodity Traders Exchange
- Trasteel International SA, Italy
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- Tamil Nadu electricity Board
- CNBM International Corporation - China
- Kideco Jaya Agung - Indonesia
- Sarangani Energy Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- South Luzon Thermal Energy Corporation
- Siam City Cement - Thailand
- Thiess Contractors Indonesia
- McConnell Dowell - Australia
- Deloitte Consulting - India
- Goldman Sachs - Singapore
- Mercuria Energy - Indonesia
- Madhucon Powers Ltd - India
- Star Paper Mills Limited - India
- Posco Energy - South Korea
- New Zealand Coal & Carbon
- Singapore Mercantile Exchange
- Kaltim Prima Coal - Indonesia
- Indian Energy Exchange, India
- Indo Tambangraya Megah - Indonesia
- Petron Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- Chamber of Mines of South Africa
- Vizag Seaport Private Limited - India
- Ambuja Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Timah Investasi Mineral - Indoneisa
- Grasim Industreis Ltd - India
- TeaM Sual Corporation - Philippines
- India Bulls Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Aditya Birla Group - India
- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- Global Green Power PLC Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
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