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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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Thursday, 01 November 12
SOUTH KOREAN POWER UTILITY EWP TO PURCHASE 670,000 MT OF COAL FOR JAN - FEB 2013 DELIVERY
COALspot.com: Korea East-West Power Co. Ltd. on behalf of Korea South-East Power Co. Ltd., Korea Southern Power Co. Ltd., Korea Midland Power Co. Lt ...
Thursday, 01 November 12
KOMIPO LOOKING FOR 440,000 MT OF 4600 KCAL/KG NAR COAL FOR BORYEONG POWER PLANT
COALspot.com - Korea Midland Power Co. Ltd.(KOMIPO) is inviting bids from coal producers, marketing companies or traders to supply of 440,000 Metric ...
Thursday, 01 November 12
CAPESIZE RATES FALL, DRY BULK MARKET RETREATS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
It was another lackluster session yesterday in the dry bulk markets, with the industry's benchmark, the BDI (Baltic Dry Index) retreating by 1.63 p ...
Thursday, 01 November 12
HANDY : WCI-CHINA RATES ARE AT AROUND USD 5,000 AND ECI-CHINA AROUND USD 4000 - FEARNLEYS AS
Handy
The Atlantic market remains quiet due to a lack of cargoes and an increased supply of ships. Rates from the Continent to east Med were around ...
Tuesday, 30 October 12
COAL PRODUCTION TO RISE BY FIVE PERCENT IN 2013 - TEMPO INTERACTIVE
TEMPO Interactive reported that, Indonesian Coal Mining Association (APBI) chairman Bob Kamandanu has estimated that Indonesian coal production will ...
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- Edison Trading Spa - Italy
- Petrochimia International Co. Ltd.- Taiwan
- Essar Steel Hazira Ltd - India
- Kumho Petrochemical, South Korea
- Australian Coal Association
- Iligan Light & Power Inc, Philippines
- Latin American Coal - Colombia
- Posco Energy - South Korea
- Meenaskhi Energy Private Limited - India
- Merrill Lynch Commodities Europe
- Mercator Lines Limited - India
- Economic Council, Georgia
- Global Coal Blending Company Limited - Australia
- South Luzon Thermal Energy Corporation
- Parry Sugars Refinery, India
- Bayan Resources Tbk. - Indonesia
- Uttam Galva Steels Limited - India
- GVK Power & Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Heidelberg Cement - Germany
- Coal and Oil Company - UAE
- Global Business Power Corporation, Philippines
- Eastern Coal Council - USA
- Karaikal Port Pvt Ltd - India
- Deloitte Consulting - India
- Sindya Power Generating Company Private Ltd
- Bangladesh Power Developement Board
- White Energy Company Limited
- McConnell Dowell - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Anglo American - United Kingdom
- India Bulls Power Limited - India
- Thiess Contractors Indonesia
- Parliament of New Zealand
- MS Steel International - UAE
- International Coal Ventures Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Gujarat Sidhee Cement - India
- The State Trading Corporation of India Ltd
- AsiaOL BioFuels Corp., Philippines
- Banpu Public Company Limited - Thailand
- Petron Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- PNOC Exploration Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Timah Investasi Mineral - Indoneisa
- Grasim Industreis Ltd - India
- Central Electricity Authority - India
- Agrawal Coal Company - India
- Altura Mining Limited, Indonesia
- Indo Tambangraya Megah - Indonesia
- Mercuria Energy - Indonesia
- ASAPP Information Group - India
- Indika Energy - Indonesia
- Cement Manufacturers Association - India
- CIMB Investment Bank - Malaysia
- Global Green Power PLC Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- VISA Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
- Formosa Plastics Group - Taiwan
- Ministry of Finance - Indonesia
- Ind-Barath Power Infra Limited - India
- Tata Chemicals Ltd - India
- GAC Shipping (India) Pvt Ltd
- Tamil Nadu electricity Board
- Karbindo Abesyapradhi - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Madhucon Powers Ltd - India
- Electricity Generating Authority of Thailand
- CNBM International Corporation - China
- Bhushan Steel Limited - India
- Coastal Gujarat Power Limited - India
- Medco Energi Mining Internasional
- Kepco SPC Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Vizag Seaport Private Limited - India
- Baramulti Group, Indonesia
- Minerals Council of Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Kalimantan Lumbung Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- London Commodity Brokers - England
- Thai Mozambique Logistica
- Port Waratah Coal Services - Australia
- Indonesian Coal Mining Association
- Binh Thuan Hamico - Vietnam
- Energy Link Ltd, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Star Paper Mills Limited - India
- Romanian Commodities Exchange
- Kaltim Prima Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Eastern Energy - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- The Treasury - Australian Government
- Maheswari Brothers Coal Limited - India
- Carbofer General Trading SA - India
- Vijayanagar Sugar Pvt Ltd - India
- Trasteel International SA, Italy
- Miang Besar Coal Terminal - Indonesia
- Malabar Cements Ltd - India
- Salva Resources Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Chamber of Mines of South Africa
- Renaissance Capital - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Rashtriya Ispat Nigam Limited - India
- SMG Consultants - Indonesia
- Siam City Cement - Thailand
- Ambuja Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Siam City Cement PLC, Thailand
- Energy Development Corp, Philippines
- Larsen & Toubro Limited - India
- Jaiprakash Power Ventures ltd
- Meralco Power Generation, Philippines
- PTC India Limited - India
- Central Java Power - Indonesia
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- Bukit Baiduri Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- Videocon Industries ltd - India
- Gujarat Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- San Jose City I Power Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Mjunction Services Limited - India
- Bulk Trading Sa - Switzerland
- Bhoruka Overseas - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bhatia International Limited - India
- Intertek Mineral Services - Indonesia
- Aditya Birla Group - India
- Borneo Indobara - Indonesia
- Australian Commodity Traders Exchange
- Commonwealth Bank - Australia
- Antam Resourcindo - Indonesia
- Directorate Of Revenue Intelligence - India
- Goldman Sachs - Singapore
- Sical Logistics Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wilmar Investment Holdings
- Pendopo Energi Batubara - Indonesia
- PowerSource Philippines DevCo
- IHS Mccloskey Coal Group - USA
- Marubeni Corporation - India
- Orica Australia Pty. Ltd.
- Kideco Jaya Agung - Indonesia
- Power Finance Corporation Ltd., India
- Ministry of Transport, Egypt
- Mintek Dendrill Indonesia
- Planning Commission, India
- Electricity Authority, New Zealand
- Savvy Resources Ltd - HongKong
- New Zealand Coal & Carbon
- Bank of Tokyo Mitsubishi UFJ Ltd
- Oldendorff Carriers - Singapore
- Ministry of Mines - Canada
- Makarim & Taira - Indonesia
- Coalindo Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Standard Chartered Bank - UAE
- Rio Tinto Coal - Australia
- Africa Commodities Group - South Africa
- Interocean Group of Companies - India
- Sakthi Sugars Limited - India
- Bukit Makmur.PT - Indonesia
- Semirara Mining Corp, Philippines
- Riau Bara Harum - Indonesia
- Sojitz Corporation - Japan
- The University of Queensland
- TeaM Sual Corporation - Philippines
- Bharathi Cement Corporation - India
- Xindia Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Barasentosa Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Lanco Infratech Ltd - India
- Globalindo Alam Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Attock Cement Pakistan Limited
- Indian Oil Corporation Limited
- IEA Clean Coal Centre - UK
- Gujarat Mineral Development Corp Ltd - India
- Vedanta Resources Plc - India
- Therma Luzon, Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- GMR Energy Limited - India
- Independent Power Producers Association of India
- Singapore Mercantile Exchange
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