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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, 03 July 13
NEWCASTLE COAL EXPORTS DIP 24.79 PER CENT WOW
COALspot.com - Newcastle Coal exports fell 24.79% to 2.33 million tons WoW.
Newcastle port in Australia has loaded 2,332,513 tons of coal for the ...
Monday, 01 July 13
12TH CLEAN COAL FORUM INDONESIA 2013
Press Release: Produced by CDMC Events, The 12th Clean Coal Forum Indonesia 2013 will be held on Dec 5-6,2013 in Jakarta, Indonesia. It will generat ...
Monday, 01 July 13
INDIA AND CHINA STILL DOMINATING THE INDONESIAN THERMAL COAL EXPORT MARKET
COALspot.com: Indonesia, the world's largest multi types coal exporter shipped 35.83* million tons of coal in May 2013, 1.40 per cent l ...
Sunday, 30 June 13
YEAR 2014 INDO SUB-BIT COAL SWAPS EXPECTED TO STAY BELOW 2013 LEVEL
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average August 2013 delivery have gained 0.08 percent on a day lost on week ...
Sunday, 30 June 13
CAPESIZE RATES SEEN INCREASING ON HIGH DEMAND - VISTAAR
COALspot.com - The BDI continued to rise and saw a big gain on Friday. BDI increased 14 per cent week ended 28 June 2013, closed at 1171 points driv ...
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- Alfred C Toepfer International GmbH - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Development Corp, Philippines
- Latin American Coal - Colombia
- Marubeni Corporation - India
- Eastern Energy - Thailand
- Parry Sugars Refinery, India
- Borneo Indobara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Power Finance Corporation Ltd., India
- Semirara Mining and Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- The State Trading Corporation of India Ltd
- Bhushan Steel Limited - India
- Dalmia Cement Bharat India
- Aboitiz Power Corporation - Philippines
- Goldman Sachs - Singapore
- Kideco Jaya Agung - Indonesia
- MS Steel International - UAE
- Eastern Coal Council - USA
- Chettinad Cement Corporation Ltd - India
- GAC Shipping (India) Pvt Ltd
- Oldendorff Carriers - Singapore
- Straits Asia Resources Limited - Singapore
- Sarangani Energy Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Independent Power Producers Association of India
- Bukit Makmur.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bharathi Cement Corporation - India
- Central Electricity Authority - India
- Ministry of Transport, Egypt
- Sree Jayajothi Cements Limited - India
- Deloitte Consulting - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- TeaM Sual Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Bulk Trading Sa - Switzerland
- Neyveli Lignite Corporation Ltd, - India
- Larsen & Toubro Limited - India
- Altura Mining Limited, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Toyota Tsusho Corporation, Japan
- Kumho Petrochemical, South Korea
- PowerSource Philippines DevCo
- Romanian Commodities Exchange
- Georgia Ports Authority, United States
- Indonesian Coal Mining Association
- Trasteel International SA, Italy
- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- Star Paper Mills Limited - India
- Agrawal Coal Company - India
- Formosa Plastics Group - Taiwan
- Mercator Lines Limited - India
- Bayan Resources Tbk. - Indonesia
- GMR Energy Limited - India
- Kaltim Prima Coal - Indonesia
- Africa Commodities Group - South Africa
- Vedanta Resources Plc - India
- Indian Energy Exchange, India
- Meralco Power Generation, Philippines
- McConnell Dowell - Australia
- Electricity Generating Authority of Thailand
- Malabar Cements Ltd - India
- San Jose City I Power Corp, Philippines
- Commonwealth Bank - Australia
- PTC India Limited - India
- Meenaskhi Energy Private Limited - India
- Petron Corporation, Philippines
- London Commodity Brokers - England
- Baramulti Group, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Semirara Mining Corp, Philippines
- ASAPP Information Group - India
- Grasim Industreis Ltd - India
- Indo Tambangraya Megah - Indonesia
- Coalindo Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Jindal Steel & Power Ltd - India
- Standard Chartered Bank - UAE
- Sakthi Sugars Limited - India
- OPG Power Generation Pvt Ltd - India
- New Zealand Coal & Carbon
- Australian Coal Association
- IEA Clean Coal Centre - UK
- SMC Global Power, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Global Business Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Ambuja Cements Ltd - India
- Posco Energy - South Korea
- Attock Cement Pakistan Limited
- Indian Oil Corporation Limited
- Kohat Cement Company Ltd. - Pakistan
- Ind-Barath Power Infra Limited - India
- Parliament of New Zealand
- Intertek Mineral Services - Indonesia
- Carbofer General Trading SA - India
- Indogreen Group - Indonesia
- Simpson Spence & Young - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhoruka Overseas - Indonesia
- Directorate Of Revenue Intelligence - India
- Orica Mining Services - Indonesia
- Energy Link Ltd, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- The Treasury - Australian Government
- Sical Logistics Limited - India
- Samtan Co., Ltd - South Korea
- CIMB Investment Bank - Malaysia
- IHS Mccloskey Coal Group - USA
- Merrill Lynch Commodities Europe
- Singapore Mercantile Exchange
- Asmin Koalindo Tuhup - Indonesia
- Central Java Power - Indonesia
- The University of Queensland
- Bahari Cakrawala Sebuku - Indonesia
- Kobexindo Tractors - Indoneisa
- Wood Mackenzie - Singapore
- Medco Energi Mining Internasional
- Uttam Galva Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- Sojitz Corporation - Japan
- Ministry of Mines - Canada
- SN Aboitiz Power Inc, Philippines
- Australian Commodity Traders Exchange
- Minerals Council of Australia
- Timah Investasi Mineral - Indoneisa
- Anglo American - United Kingdom
- Vizag Seaport Private Limited - India
- India Bulls Power Limited - India
- Salva Resources Pvt Ltd - India
- Madhucon Powers Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Karbindo Abesyapradhi - Indoneisa
- Bangladesh Power Developement Board
- Kepco SPC Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Manunggal Multi Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Mjunction Services Limited - India
- Mercuria Energy - Indonesia
- Tamil Nadu electricity Board
- International Coal Ventures Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Siam City Cement - Thailand
- Siam City Cement PLC, Thailand
- Heidelberg Cement - Germany
- Thai Mozambique Logistica
- Billiton Holdings Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- Videocon Industries ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- CNBM International Corporation - China
- Riau Bara Harum - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Thiess Contractors Indonesia
- Xindia Steels Limited - India
- VISA Power Limited - India
- Bhatia International Limited - India
- Interocean Group of Companies - India
- Globalindo Alam Lestari - Indonesia
- White Energy Company Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMG Consultants - Indonesia
- Bukit Baiduri Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Authority, New Zealand
- Indika Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Antam Resourcindo - Indonesia
- Sindya Power Generating Company Private Ltd
- Cement Manufacturers Association - India
- Savvy Resources Ltd - HongKong
- Binh Thuan Hamico - Vietnam
- Tata Chemicals Ltd - India
- Price Waterhouse Coopers - Russia
- Maheswari Brothers Coal Limited - India
- Jaiprakash Power Ventures ltd
- Economic Council, Georgia
- GVK Power & Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Chamber of Mines of South Africa
- Rio Tinto Coal - Australia
- Wilmar Investment Holdings
- Ministry of Finance - Indonesia
- Lanco Infratech Ltd - India
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Sidhee Cement - India
- Global Green Power PLC Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- Iligan Light & Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Banpu Public Company Limited - Thailand
- Port Waratah Coal Services - Australia
- Makarim & Taira - Indonesia
- PNOC Exploration Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
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