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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, 22 July 13
INDO COAL SWAP FOR AUGUST 13 DELIVERY GAINED ON WEEK BUT LOST ON DAY AND MONTH
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average August 2013 delivery slightly up on week but fell on day and month on Fri ...
Friday, 19 July 13
U.S.COAL PRODUCTION TOTALED APPROXIMATELY 19.60 MMST WEEK ENDED JULY 13
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 19.60 million short tons (mmst) of ...
Friday, 19 July 13
TNPL IS LOOKING FOR 300 K MT OF 6000 GAD COAL FOR FIVE MONTH
COALspot.com - Tamil Nadu Newsprint & Papers Ltd. , an Indian paper maker, is seeking 300,000 metric tons ± 5% (In 5 shipments about 60,0 ...
Thursday, 18 July 13
3RD ANNUAL FLOATING TERMINALS, INDONESIA
Commercial applications for offshore transshipment facilities
Floating Terminal solutions are increasingly being deployed by miners, independent ...
Thursday, 18 July 13
THE CAPE MARKET APPEARS TO BE HOLDING FIRM - FEARNLEYS AS
Handy
In the Pacific, market maintained similar levels during the week. There is several Indo coal orders in the market, ships passing Singapore fi ...
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- Globalindo Alam Lestari - Indonesia
- Heidelberg Cement - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Baiduri Energy - Indonesia
- Indian Energy Exchange, India
- Economic Council, Georgia
- ICICI Bank Limited - India
- Tata Chemicals Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Edison Trading Spa - Italy
- Central Java Power - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Georgia Ports Authority, United States
- European Bulk Services B.V. - Netherlands
- Madhucon Powers Ltd - India
- Vedanta Resources Plc - India
- Uttam Galva Steels Limited - India
- Star Paper Mills Limited - India
- Meralco Power Generation, Philippines
- Aboitiz Power Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Kartika Selabumi Mining - Indonesia
- GMR Energy Limited - India
- Goldman Sachs - Singapore
- Global Coal Blending Company Limited - Australia
- Intertek Mineral Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Parry Sugars Refinery, India
- Karbindo Abesyapradhi - Indoneisa
- Pendopo Energi Batubara - Indonesia
- PTC India Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Kobexindo Tractors - Indoneisa
- Videocon Industries ltd - India
- Mercator Lines Limited - India
- Port Waratah Coal Services - Australia
- Kepco SPC Power Corporation, Philippines
- Wilmar Investment Holdings
- Karaikal Port Pvt Ltd - India
- Thai Mozambique Logistica
- The Treasury - Australian Government
- Thiess Contractors Indonesia
- GVK Power & Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- SMG Consultants - Indonesia
- Toyota Tsusho Corporation, Japan
- Samtan Co., Ltd - South Korea
- Petron Corporation, Philippines
- Power Finance Corporation Ltd., India
- Minerals Council of Australia
- New Zealand Coal & Carbon
- South Luzon Thermal Energy Corporation
- Attock Cement Pakistan Limited
- Riau Bara Harum - Indonesia
- Africa Commodities Group - South Africa
- GAC Shipping (India) Pvt Ltd
- Renaissance Capital - South Africa
- Altura Mining Limited, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kumho Petrochemical, South Korea
- LBH Netherlands Bv - Netherlands
- Chamber of Mines of South Africa
- Electricity Authority, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Price Waterhouse Coopers - Russia
- Merrill Lynch Commodities Europe
- Savvy Resources Ltd - HongKong
- Leighton Contractors Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Wood Mackenzie - Singapore
- Mercuria Energy - Indonesia
- Romanian Commodities Exchange
- Electricity Generating Authority of Thailand
- Therma Luzon, Inc, Philippines
- Malabar Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Ministry of Transport, Egypt
- Orica Australia Pty. Ltd.
- Cement Manufacturers Association - India
- Antam Resourcindo - Indonesia
- Meenaskhi Energy Private Limited - India
- Semirara Mining Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Sakthi Sugars Limited - India
- Chettinad Cement Corporation Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Finance - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Central Electricity Authority - India
- Larsen & Toubro Limited - India
- Sical Logistics Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Barasentosa Lestari - Indonesia
- Coalindo Energy - Indonesia
- Interocean Group of Companies - India
- Energy Development Corp, Philippines
- The State Trading Corporation of India Ltd
- The University of Queensland
- Kohat Cement Company Ltd. - Pakistan
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- Vizag Seaport Private Limited - India
- Banpu Public Company Limited - Thailand
- Bharathi Cement Corporation - India
- McConnell Dowell - Australia
- Jindal Steel & Power Ltd - India
- Sojitz Corporation - Japan
- Krishnapatnam Port Company Ltd. - India
- Australian Coal Association
- Grasim Industreis Ltd - India
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Orica Mining Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Sidhee Cement - India
- Indonesian Coal Mining Association
- Rio Tinto Coal - Australia
- VISA Power Limited - India
- Bhatia International Limited - India
- India Bulls Power Limited - India
- Coastal Gujarat Power Limited - India
- Binh Thuan Hamico - Vietnam
- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- Kalimantan Lumbung Energi - Indonesia
- Lanco Infratech Ltd - India
- Xindia Steels Limited - India
- CIMB Investment Bank - Malaysia
- SMC Global Power, Philippines
- Indogreen Group - Indonesia
- Straits Asia Resources Limited - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Latin American Coal - Colombia
- Miang Besar Coal Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bhushan Steel Limited - India
- Commonwealth Bank - Australia
- Bangladesh Power Developement Board
- Baramulti Group, Indonesia
- Parliament of New Zealand
- Siam City Cement PLC, Thailand
- Directorate General of MIneral and Coal - Indonesia
- MS Steel International - UAE
- Australian Commodity Traders Exchange
- IHS Mccloskey Coal Group - USA
- Iligan Light & Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Borneo Indobara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bukit Makmur.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- Ind-Barath Power Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Ambuja Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- Siam City Cement - Thailand
- Eastern Energy - Thailand
- Dalmia Cement Bharat India
- PowerSource Philippines DevCo
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Posco Energy - South Korea
- Marubeni Corporation - India
- CNBM International Corporation - China
- Anglo American - United Kingdom
- White Energy Company Limited
- Oldendorff Carriers - Singapore
- Maheswari Brothers Coal Limited - India
- London Commodity Brokers - England
- Jorong Barutama Greston.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Indika Energy - Indonesia
- Mintek Dendrill Indonesia
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- Tamil Nadu electricity Board
- Medco Energi Mining Internasional
- Global Green Power PLC Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Jaiprakash Power Ventures ltd
- Aditya Birla Group - India
- Sree Jayajothi Cements Limited - India
- Salva Resources Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Carbofer General Trading SA - India
- Ministry of Mines - Canada
- PNOC Exploration Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Simpson Spence & Young - Indonesia
- SN Aboitiz Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kideco Jaya Agung - Indonesia
- Energy Link Ltd, New Zealand
- Makarim & Taira - Indonesia
- Eastern Coal Council - USA
- Gujarat Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Kapuas Tunggal Persada - Indonesia
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