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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, 26 February 13
10TH CLEAN COAL FORUM WILL BE HELD ON JUNE 2013
CDMC Events will be presenting the 10th Clean Coal Forum 2013 on June 13 - 14, 2013 in Beijing,China.
It will make you understand regulatory asp ...
Sunday, 24 February 13
COAL SWAPS INCH UP WEEK - ON - WEEK
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q2’ 2013 delivery has gained 0.17 percent and CFR South China coal shipme ...
Sunday, 24 February 13
BDI FELL 1.72 PERCENT BUT FREIGHT MARKET FAIRLY STEADY - VISTAAR
COALspot.com - This freight market has been fairly steady this week but, BDI fell1.72 pct and closed at 740 points.
The cape index also joins BDI ...
Saturday, 23 February 13
IHS MCCLOSKEY 20TH ANNUAL COAL CONFERENCE OF THE AMERICAS
IHS McCloskey 20th Annual Coal Conference of the Americas to be held on 13-14 March 2013 in Cartagena, Colombia
IHS is pleased to invite you to t ...
Thursday, 21 February 13
HANDY : THE PACIFIC MARKET GOT FIRMED UP AS CHINESE CAME BACK FROM HOLIDAYS - FEARNLEYS
Handy
The Atlantic saw more cargoes than last week but rates remained unchanged as lot of ships in the market. The USG-Feast was at USD 18k and Bla ...
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- Karaikal Port Pvt Ltd - India
- Minerals Council of Australia
- Planning Commission, India
- Sakthi Sugars Limited - India
- Parliament of New Zealand
- ICICI Bank Limited - India
- Sarangani Energy Corporation, Philippines
- India Bulls Power Limited - India
- CNBM International Corporation - China
- Price Waterhouse Coopers - Russia
- Holcim Trading Pte Ltd - Singapore
- Bukit Makmur.PT - Indonesia
- Port Waratah Coal Services - Australia
- Kaltim Prima Coal - Indonesia
- Bhushan Steel Limited - India
- GMR Energy Limited - India
- Cigading International Bulk Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Romanian Commodities Exchange
- Eastern Energy - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- SN Aboitiz Power Inc, Philippines
- Larsen & Toubro Limited - India
- Bulk Trading Sa - Switzerland
- Vizag Seaport Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Merrill Lynch Commodities Europe
- Krishnapatnam Port Company Ltd. - India
- TeaM Sual Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- Global Coal Blending Company Limited - Australia
- Africa Commodities Group - South Africa
- SMG Consultants - Indonesia
- Australian Commodity Traders Exchange
- Siam City Cement PLC, Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Formosa Plastics Group - Taiwan
- Energy Link Ltd, New Zealand
- Independent Power Producers Association of India
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- Globalindo Alam Lestari - Indonesia
- Siam City Cement - Thailand
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Dalmia Cement Bharat India
- Bayan Resources Tbk. - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Indian Oil Corporation Limited
- Deloitte Consulting - India
- OPG Power Generation Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Star Paper Mills Limited - India
- New Zealand Coal & Carbon
- Agrawal Coal Company - India
- IEA Clean Coal Centre - UK
- Vedanta Resources Plc - India
- The University of Queensland
- Videocon Industries ltd - India
- Tata Chemicals Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Savvy Resources Ltd - HongKong
- Energy Development Corp, Philippines
- Essar Steel Hazira Ltd - India
- Bhoruka Overseas - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Jindal Steel & Power Ltd - India
- Mercator Lines Limited - India
- Indogreen Group - Indonesia
- Meenaskhi Energy Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sindya Power Generating Company Private Ltd
- GN Power Mariveles Coal Plant, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- PetroVietnam Power Coal Import and Supply Company
- Grasim Industreis Ltd - India
- Kobexindo Tractors - Indoneisa
- Uttam Galva Steels Limited - India
- Antam Resourcindo - Indonesia
- Kideco Jaya Agung - Indonesia
- London Commodity Brokers - England
- Binh Thuan Hamico - Vietnam
- Ceylon Electricity Board - Sri Lanka
- San Jose City I Power Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Singapore Mercantile Exchange
- Baramulti Group, Indonesia
- GVK Power & Infra Limited - India
- Chamber of Mines of South Africa
- Power Finance Corporation Ltd., India
- Thai Mozambique Logistica
- Kumho Petrochemical, South Korea
- Coalindo Energy - Indonesia
- Borneo Indobara - Indonesia
- Therma Luzon, Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coal and Oil Company - UAE
- Parry Sugars Refinery, India
- Georgia Ports Authority, United States
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- Sical Logistics Limited - India
- Bhatia International Limited - India
- Barasentosa Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Carbofer General Trading SA - India
- Cement Manufacturers Association - India
- Jaiprakash Power Ventures ltd
- Eastern Coal Council - USA
- Marubeni Corporation - India
- Pendopo Energi Batubara - Indonesia
- Posco Energy - South Korea
- Sree Jayajothi Cements Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Anglo American - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- ASAPP Information Group - India
- VISA Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Finance - Indonesia
- GAC Shipping (India) Pvt Ltd
- Latin American Coal - Colombia
- Ministry of Transport, Egypt
- Central Java Power - Indonesia
- The State Trading Corporation of India Ltd
- Attock Cement Pakistan Limited
- Rio Tinto Coal - Australia
- Interocean Group of Companies - India
- Mintek Dendrill Indonesia
- Petron Corporation, Philippines
- Global Business Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Wood Mackenzie - Singapore
- Electricity Generating Authority of Thailand
- Trasteel International SA, Italy
- The Treasury - Australian Government
- Neyveli Lignite Corporation Ltd, - India
- European Bulk Services B.V. - Netherlands
- Sojitz Corporation - Japan
- PowerSource Philippines DevCo
- Timah Investasi Mineral - Indoneisa
- Edison Trading Spa - Italy
- Thiess Contractors Indonesia
- Indika Energy - Indonesia
- Bharathi Cement Corporation - India
- Madhucon Powers Ltd - India
- Makarim & Taira - Indonesia
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- PNOC Exploration Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Renaissance Capital - South Africa
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Salva Resources Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Australian Coal Association
- Karbindo Abesyapradhi - Indoneisa
- Riau Bara Harum - Indonesia
- Orica Mining Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Medco Energi Mining Internasional
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- International Coal Ventures Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Chettinad Cement Corporation Ltd - India
- CIMB Investment Bank - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMC Global Power, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Goldman Sachs - Singapore
- Lanco Infratech Ltd - India
- Intertek Mineral Services - Indonesia
- Ambuja Cements Ltd - India
- Standard Chartered Bank - UAE
- Maheswari Brothers Coal Limited - India
- Miang Besar Coal Terminal - Indonesia
- Indian Energy Exchange, India
- White Energy Company Limited
- Altura Mining Limited, Indonesia
- MS Steel International - UAE
- LBH Netherlands Bv - Netherlands
- Orica Australia Pty. Ltd.
- Meralco Power Generation, Philippines
- Economic Council, Georgia
- Indonesian Coal Mining Association
- Tamil Nadu electricity Board
- Kepco SPC Power Corporation, Philippines
- McConnell Dowell - Australia
- Ministry of Mines - Canada
- Samtan Co., Ltd - South Korea
- Malabar Cements Ltd - India
- Xindia Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Directorate Of Revenue Intelligence - India
- Central Electricity Authority - India
- PTC India Limited - India
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