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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, 09 July 13
NEWCASTLE COAL EXPORTS JUMP 27.53% ON WEEK TO 2.97 MILLION MT
COALspot.com - Newcastle Coal exports up 27.53% to 2.97 million tons W-o-W.
Newcastle port in Australia has loaded 2,974,715 tons of coal for the ...
Tuesday, 09 July 13
CAPESIZE: SHOT UP; PANAMAXES: NOT SO LUCK; SUPRAS: SLIGHTLY BETTER; HANDIES: SOFT - INTERMODAL
COALspot.com : June 2013 Recap
A renewed Capesize market this month (June 2013) was the cause for much of the overall noteworthy performanc ...
Tuesday, 09 July 13
THE 11TH DEEP COAL PROCESSING FORUM 2013
Press Release : The 11th Deep Coal Processing Forum 2013 will be held in November Beijing China.
CDMC Events is pleased to announce that 11 ...
Monday, 08 July 13
ECO-FRIENDLY COAL FOR CHINA - VALUE FOR THE ENVIRONMENT AND VALUE FOR THE POWER GENERATOR - BY: LINDSAY JUNIPER
COALspot.com : January 2013 saw an episode of extreme particulate pollution in Beijing 35 times worse than the safe level recommended by the World H ...
Sunday, 07 July 13
FREIGHT MARKET IS EXPECTED TO BE SOFT TO STABLE NEXT WEEK- VISTAAR
COALspot.com - The freight market softened for the week ended 5 July 2013, and experienced a decline in all sectors, including BDI. Bulk dry Index d ...
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- Mintek Dendrill Indonesia
- Samtan Co., Ltd - South Korea
- Eastern Energy - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Goldman Sachs - Singapore
- Vizag Seaport Private Limited - India
- Standard Chartered Bank - UAE
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- Essar Steel Hazira Ltd - India
- Kobexindo Tractors - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Marubeni Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Indian Oil Corporation Limited
- Savvy Resources Ltd - HongKong
- ICICI Bank Limited - India
- Edison Trading Spa - Italy
- Larsen & Toubro Limited - India
- Jaiprakash Power Ventures ltd
- Siam City Cement PLC, Thailand
- Lanco Infratech Ltd - India
- Cement Manufacturers Association - India
- Gujarat Mineral Development Corp Ltd - India
- Thiess Contractors Indonesia
- Coalindo Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Oldendorff Carriers - Singapore
- GAC Shipping (India) Pvt Ltd
- Australian Coal Association
- Sical Logistics Limited - India
- Thai Mozambique Logistica
- Siam City Cement - Thailand
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Energy Development Corp, Philippines
- Orica Australia Pty. Ltd.
- Vedanta Resources Plc - India
- Ambuja Cements Ltd - India
- Indian Energy Exchange, India
- Anglo American - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- LBH Netherlands Bv - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Power Finance Corporation Ltd., India
- The University of Queensland
- Xindia Steels Limited - India
- Carbofer General Trading SA - India
- Ind-Barath Power Infra Limited - India
- Simpson Spence & Young - Indonesia
- Sindya Power Generating Company Private Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Latin American Coal - Colombia
- Kapuas Tunggal Persada - Indonesia
- Salva Resources Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Indogreen Group - Indonesia
- Renaissance Capital - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining Corp, Philippines
- Gujarat Sidhee Cement - India
- Parry Sugars Refinery, India
- Global Green Power PLC Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Singapore Mercantile Exchange
- Intertek Mineral Services - Indonesia
- Eastern Coal Council - USA
- TNB Fuel Sdn Bhd - Malaysia
- Uttam Galva Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Mjunction Services Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Malabar Cements Ltd - India
- Bukit Baiduri Energy - Indonesia
- Trasteel International SA, Italy
- Altura Mining Limited, Indonesia
- Baramulti Group, Indonesia
- Meenaskhi Energy Private Limited - India
- PNOC Exploration Corporation - Philippines
- MS Steel International - UAE
- Cigading International Bulk Terminal - Indonesia
- Coal and Oil Company - UAE
- Semirara Mining and Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Commonwealth Bank - Australia
- Bhatia International Limited - India
- Electricity Authority, New Zealand
- IHS Mccloskey Coal Group - USA
- White Energy Company Limited
- Kideco Jaya Agung - Indonesia
- Chettinad Cement Corporation Ltd - India
- Indo Tambangraya Megah - Indonesia
- Deloitte Consulting - India
- Maheswari Brothers Coal Limited - India
- Kepco SPC Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Antam Resourcindo - Indonesia
- Sojitz Corporation - Japan
- Riau Bara Harum - Indonesia
- PowerSource Philippines DevCo
- PetroVietnam Power Coal Import and Supply Company
- Wilmar Investment Holdings
- Africa Commodities Group - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Attock Cement Pakistan Limited
- CNBM International Corporation - China
- TeaM Sual Corporation - Philippines
- Posco Energy - South Korea
- Sakthi Sugars Limited - India
- Jindal Steel & Power Ltd - India
- Port Waratah Coal Services - Australia
- Star Paper Mills Limited - India
- Gujarat Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Borneo Indobara - Indonesia
- Wood Mackenzie - Singapore
- Independent Power Producers Association of India
- Holcim Trading Pte Ltd - Singapore
- Indonesian Coal Mining Association
- Sree Jayajothi Cements Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Global Business Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Bharathi Cement Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- San Jose City I Power Corp, Philippines
- Australian Commodity Traders Exchange
- Mercuria Energy - Indonesia
- Energy Link Ltd, New Zealand
- The Treasury - Australian Government
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Central Java Power - Indonesia
- VISA Power Limited - India
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
- Central Electricity Authority - India
- Neyveli Lignite Corporation Ltd, - India
- Electricity Generating Authority of Thailand
- Rio Tinto Coal - Australia
- Timah Investasi Mineral - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Georgia Ports Authority, United States
- Manunggal Multi Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Makarim & Taira - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Indika Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Metalloyd Limited - United Kingdom
- Tamil Nadu electricity Board
- Krishnapatnam Port Company Ltd. - India
- Bahari Cakrawala Sebuku - Indonesia
- Formosa Plastics Group - Taiwan
- Therma Luzon, Inc, Philippines
- Medco Energi Mining Internasional
- IEA Clean Coal Centre - UK
- GVK Power & Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- Mercator Lines Limited - India
- Romanian Commodities Exchange
- Bangladesh Power Developement Board
- Videocon Industries ltd - India
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- Vijayanagar Sugar Pvt Ltd - India
- London Commodity Brokers - England
- SMG Consultants - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- Straits Asia Resources Limited - Singapore
- India Bulls Power Limited - India
- Chamber of Mines of South Africa
- Heidelberg Cement - Germany
- European Bulk Services B.V. - Netherlands
- Aditya Birla Group - India
- Meralco Power Generation, Philippines
- ASAPP Information Group - India
- Ministry of Finance - Indonesia
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- New Zealand Coal & Carbon
- Banpu Public Company Limited - Thailand
- Ministry of Transport, Egypt
- Madhucon Powers Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Parliament of New Zealand
- Petron Corporation, Philippines
- Merrill Lynch Commodities Europe
- The State Trading Corporation of India Ltd
- Agrawal Coal Company - India
- Dalmia Cement Bharat India
- Toyota Tsusho Corporation, Japan
- McConnell Dowell - Australia
- Minerals Council of Australia
- PTC India Limited - India
- Economic Council, Georgia
- Aboitiz Power Corporation - Philippines
- Planning Commission, India
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