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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, 14 October 20
CHINA COKING COAL FUTURES RALLY ON REPORTED BAN ON AUSTRALIA CARGOES - REUTERS
Dalian coking coal futures rallied for a sixth straight session on Tuesday after reports surfaced that China had stopped buying coal from Australia ...
Wednesday, 14 October 20
MARKET INSIGHT - INTERMODAL
The tanker market has experienced severe freight rate and asset value declines over the past 5 months. A potential market upturn may arise in the c ...
Friday, 09 October 20
INDIA'S COAL IMPORTS IMPROVE SOMEWHAT, BUT RECOVERY IS UNEVEN - REUTERS
India’s coal imports, depressed by the impact of coronavirus this year, regained ground in September, but in an uneven uptick – shipmen ...
Thursday, 08 October 20
CHINA'S COAL IMPORTS FROM INDONESIA DECLINED 16.4% Y-O-Y, TO 80.2 MLN TONNES IN THE FIRST 9 MONTHS OF 2020 - BANCHERO COSTA
China's coal imports boomed in 2019, surprising many who had expected the government would clamp down strictly on shipments.
...
Thursday, 08 October 20
GLIMMER OF LIGHT FOR COAL, BUT SHORT TERM - FNARENA
Is coal on the rebound? Demand appears stronger and supply reductions have underpinned a tightening market. Certainly, the Newcastle thermal coal p ...
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- Siam City Cement - Thailand
- Banpu Public Company Limited - Thailand
- Bhoruka Overseas - Indonesia
- Maheswari Brothers Coal Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vedanta Resources Plc - India
- Makarim & Taira - Indonesia
- Indonesian Coal Mining Association
- Holcim Trading Pte Ltd - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Timah Investasi Mineral - Indoneisa
- White Energy Company Limited
- Intertek Mineral Services - Indonesia
- Vizag Seaport Private Limited - India
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- Malabar Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Indika Energy - Indonesia
- Sakthi Sugars Limited - India
- Metalloyd Limited - United Kingdom
- Meralco Power Generation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Renaissance Capital - South Africa
- Global Green Power PLC Corporation, Philippines
- Lanco Infratech Ltd - India
- Thiess Contractors Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Australian Commodity Traders Exchange
- Mercator Lines Limited - India
- Electricity Authority, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Coalindo Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Jaiprakash Power Ventures ltd
- ASAPP Information Group - India
- Directorate General of MIneral and Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Baramulti Group, Indonesia
- PTC India Limited - India
- Independent Power Producers Association of India
- European Bulk Services B.V. - Netherlands
- Iligan Light & Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Kepco SPC Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Orica Mining Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Borneo Indobara - Indonesia
- Trasteel International SA, Italy
- Ministry of Mines - Canada
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Neyveli Lignite Corporation Ltd, - India
- Videocon Industries ltd - India
- Sarangani Energy Corporation, Philippines
- The University of Queensland
- Bukit Makmur.PT - Indonesia
- Altura Mining Limited, Indonesia
- Chamber of Mines of South Africa
- Kaltim Prima Coal - Indonesia
- Electricity Generating Authority of Thailand
- Gujarat Mineral Development Corp Ltd - India
- Savvy Resources Ltd - HongKong
- Ambuja Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Latin American Coal - Colombia
- Edison Trading Spa - Italy
- Bhushan Steel Limited - India
- New Zealand Coal & Carbon
- Sical Logistics Limited - India
- VISA Power Limited - India
- Singapore Mercantile Exchange
- Anglo American - United Kingdom
- Economic Council, Georgia
- Cement Manufacturers Association - India
- Jindal Steel & Power Ltd - India
- Mercuria Energy - Indonesia
- Mjunction Services Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Goldman Sachs - Singapore
- Coastal Gujarat Power Limited - India
- Parliament of New Zealand
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Wilmar Investment Holdings
- SMC Global Power, Philippines
- Medco Energi Mining Internasional
- Bukit Baiduri Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- SMG Consultants - Indonesia
- Eastern Energy - Thailand
- Kapuas Tunggal Persada - Indonesia
- Ministry of Finance - Indonesia
- Parry Sugars Refinery, India
- Global Business Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- San Jose City I Power Corp, Philippines
- Karaikal Port Pvt Ltd - India
- McConnell Dowell - Australia
- Formosa Plastics Group - Taiwan
- Kobexindo Tractors - Indoneisa
- Star Paper Mills Limited - India
- GMR Energy Limited - India
- London Commodity Brokers - England
- Asmin Koalindo Tuhup - Indonesia
- Attock Cement Pakistan Limited
- Dalmia Cement Bharat India
- Merrill Lynch Commodities Europe
- Uttam Galva Steels Limited - India
- Tamil Nadu electricity Board
- Africa Commodities Group - South Africa
- The Treasury - Australian Government
- Energy Development Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Xindia Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Thai Mozambique Logistica
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining and Power Corporation, Philippines
- Agrawal Coal Company - India
- Billiton Holdings Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- OPG Power Generation Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Australian Coal Association
- Toyota Tsusho Corporation, Japan
- Sojitz Corporation - Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Marubeni Corporation - India
- Eastern Coal Council - USA
- India Bulls Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Heidelberg Cement - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Interocean Group of Companies - India
- Bayan Resources Tbk. - Indonesia
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- MS Steel International - UAE
- Gujarat Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Georgia Ports Authority, United States
- Barasentosa Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Minerals Council of Australia
- Port Waratah Coal Services - Australia
- CIMB Investment Bank - Malaysia
- Planning Commission, India
- Ind-Barath Power Infra Limited - India
- Indian Energy Exchange, India
- Oldendorff Carriers - Singapore
- AsiaOL BioFuels Corp., Philippines
- Ministry of Transport, Egypt
- Antam Resourcindo - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bharathi Cement Corporation - India
- Commonwealth Bank - Australia
- Wood Mackenzie - Singapore
- Aditya Birla Group - India
- Samtan Co., Ltd - South Korea
- Kumho Petrochemical, South Korea
- Romanian Commodities Exchange
- Leighton Contractors Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Indogreen Group - Indonesia
- Therma Luzon, Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Chettinad Cement Corporation Ltd - India
- Meenaskhi Energy Private Limited - India
- IEA Clean Coal Centre - UK
- Maharashtra Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Gujarat Sidhee Cement - India
- Essar Steel Hazira Ltd - India
- Bhatia International Limited - India
- Deloitte Consulting - India
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- South Luzon Thermal Energy Corporation
- Price Waterhouse Coopers - Russia
- Standard Chartered Bank - UAE
- Rio Tinto Coal - Australia
- Simpson Spence & Young - Indonesia
- Grasim Industreis Ltd - India
- Sindya Power Generating Company Private Ltd
- Global Coal Blending Company Limited - Australia
- SN Aboitiz Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Central Java Power - Indonesia
- Carbofer General Trading SA - India
- Indian Oil Corporation Limited
- Posco Energy - South Korea
- ICICI Bank Limited - India
- Madhucon Powers Ltd - India
- Energy Link Ltd, New Zealand
- Petron Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Mintek Dendrill Indonesia
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