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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, 11 March 13
SUB-BIT FOB INDONESIA COAL SWAPS FELL 1.41 PERCENT W-W
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q2’ 2013 delivery has lost 1.41percent and CFR South China coal shipment ...
Sunday, 10 March 13
INDIA - INDONESIA SUPRAMAX FREIGHT : FIRM TREND
COALspot.com – This week freight market was raised and remained firm in all segments.
The BDI was up by 6.70 pct closed at 843 points, ...
Sunday, 10 March 13
INDONESIA'S FORESTRY DEPARTMENT IS TO INCREASE BORROW-TO-USE PERMITS (IJIN PINJAM PAKAI) FEE SOON
COALspot.com : Indonesia to increase borrows-to-use permit fees by 33.33 percent. The government of Indonesia is planning to increase the state&rsqu ...
Friday, 08 March 13
EKO SANTOSO BUDIANTO APPOINTED AS PRESDIENT DIRECTOR OF BERAU COAL ENERGY
COALspot.com - PT Berau Coal Energy has appointed Eko Santoso Budianto as new president director, replacing Rosan Roeslani. Berau’s extraordin ...
Friday, 08 March 13
INDONESIAN HBA UP FOR FIVE CONSECUTIVE MONTHS
COALspot.com - The Indonesian government has declared bench mark price for coal has moved upwards in March 2013.
The monthly coal reference ...
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- Iligan Light & Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Mintek Dendrill Indonesia
- Sindya Power Generating Company Private Ltd
- Intertek Mineral Services - Indonesia
- Commonwealth Bank - Australia
- Latin American Coal - Colombia
- Aditya Birla Group - India
- Meralco Power Generation, Philippines
- Malabar Cements Ltd - India
- Australian Commodity Traders Exchange
- Tamil Nadu electricity Board
- Sical Logistics Limited - India
- Bukit Makmur.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Romanian Commodities Exchange
- Essar Steel Hazira Ltd - India
- Singapore Mercantile Exchange
- The State Trading Corporation of India Ltd
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Posco Energy - South Korea
- The University of Queensland
- Lanco Infratech Ltd - India
- Mercuria Energy - Indonesia
- Australian Coal Association
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- Metalloyd Limited - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Meenaskhi Energy Private Limited - India
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- Wood Mackenzie - Singapore
- Edison Trading Spa - Italy
- Goldman Sachs - Singapore
- Uttam Galva Steels Limited - India
- Ministry of Transport, Egypt
- Orica Mining Services - Indonesia
- Bhatia International Limited - India
- Merrill Lynch Commodities Europe
- OPG Power Generation Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Mineral Development Corp Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Electricity Authority, New Zealand
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- Madhucon Powers Ltd - India
- Africa Commodities Group - South Africa
- Agrawal Coal Company - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bharathi Cement Corporation - India
- New Zealand Coal & Carbon
- PNOC Exploration Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Videocon Industries ltd - India
- Bhoruka Overseas - Indonesia
- Directorate Of Revenue Intelligence - India
- Port Waratah Coal Services - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
- London Commodity Brokers - England
- Indonesian Coal Mining Association
- Marubeni Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Energy Link Ltd, New Zealand
- Barasentosa Lestari - Indonesia
- Independent Power Producers Association of India
- Coastal Gujarat Power Limited - India
- Kobexindo Tractors - Indoneisa
- Petron Corporation, Philippines
- Larsen & Toubro Limited - India
- Binh Thuan Hamico - Vietnam
- Renaissance Capital - South Africa
- Indian Energy Exchange, India
- Alfred C Toepfer International GmbH - Germany
- Medco Energi Mining Internasional
- Eastern Coal Council - USA
- Bulk Trading Sa - Switzerland
- Parliament of New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- SMC Global Power, Philippines
- Manunggal Multi Energi - Indonesia
- Carbofer General Trading SA - India
- Coal and Oil Company - UAE
- Mercator Lines Limited - India
- Cement Manufacturers Association - India
- Standard Chartered Bank - UAE
- Eastern Energy - Thailand
- Indogreen Group - Indonesia
- India Bulls Power Limited - India
- Formosa Plastics Group - Taiwan
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Aboitiz Power Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- LBH Netherlands Bv - Netherlands
- McConnell Dowell - Australia
- Baramulti Group, Indonesia
- Coalindo Energy - Indonesia
- Bangladesh Power Developement Board
- Rashtriya Ispat Nigam Limited - India
- Globalindo Alam Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- Maheswari Brothers Coal Limited - India
- PTC India Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Sinarmas Energy and Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Riau Bara Harum - Indonesia
- ASAPP Information Group - India
- Interocean Group of Companies - India
- Anglo American - United Kingdom
- Jaiprakash Power Ventures ltd
- SN Aboitiz Power Inc, Philippines
- Indika Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Chamber of Mines of South Africa
- SMG Consultants - Indonesia
- PowerSource Philippines DevCo
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Banpu Public Company Limited - Thailand
- South Luzon Thermal Energy Corporation
- Siam City Cement PLC, Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ICICI Bank Limited - India
- MS Steel International - UAE
- Global Coal Blending Company Limited - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- European Bulk Services B.V. - Netherlands
- Price Waterhouse Coopers - Russia
- Jindal Steel & Power Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Sarangani Energy Corporation, Philippines
- Minerals Council of Australia
- International Coal Ventures Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Planning Commission, India
- Rio Tinto Coal - Australia
- Attock Cement Pakistan Limited
- Antam Resourcindo - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Borneo Indobara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Samtan Co., Ltd - South Korea
- Wilmar Investment Holdings
- Indian Oil Corporation Limited
- White Energy Company Limited
- Salva Resources Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Therma Luzon, Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Trasteel International SA, Italy
- Central Electricity Authority - India
- Ministry of Mines - Canada
- Star Paper Mills Limited - India
- IHS Mccloskey Coal Group - USA
- Energy Development Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Thiess Contractors Indonesia
- Bhushan Steel Limited - India
- Chettinad Cement Corporation Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Central Java Power - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- The Treasury - Australian Government
- Heidelberg Cement - Germany
- Kideco Jaya Agung - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sakthi Sugars Limited - India
- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- Timah Investasi Mineral - Indoneisa
- VISA Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Parry Sugars Refinery, India
- Thai Mozambique Logistica
- AsiaOL BioFuels Corp., Philippines
- Grasim Industreis Ltd - India
- Global Green Power PLC Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Deloitte Consulting - India
- Ind-Barath Power Infra Limited - India
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