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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, 10 September 20
U.S. COAL PRODUCTION IN 2020 TO BE 511 MMST, 28 PER CENT LOWER THAN IN 2019 - EIA
EIA expects total U.S. coal production in 2020 to be 511 million short tons (MMst), 194 MMst (28%) lower than in 2019. Mitigation efforts related t ...
Thursday, 10 September 20
DRY BULK SHIPPING: CHINA'S DEMAND KEEPING THE DRY BULK MARKET GOING - PETER SAND | BIMCO
Overview
An impressive recovery in Chinese dry bulk imports has protected the industry from the effects of falling demand in the rest of the wo ...
Thursday, 10 September 20
TANKER SHIPPING: FREIGHT RATES BACK AT LOSS-MAKING LEVELS AFTER 12 VERY PROFITABLE MONTHS - BIMCO
Overview
A stunningly strong 12 months for the tanker shipping industry is now being replaced by lower freight rates, as lower oil product ...
Thursday, 10 September 20
INDIA'S COAL IMPORTS STUMBLE IN AUGUST, RAISING RISK OF SLOW RECOVERY - REFINITIV | BANCHERO COSTA
After posting a mild recovery in July, India's coal imports have stumbled in August as the South Asian nation battles to restart it ...
Thursday, 10 September 20
THE FIRST 8 MONTHS OF 2020, INDONESIA EXPORTED 217.4 MLN TONNES OF COAL BASED ON REFINITIV - BANCHERO COSTA
The coal market has been hit by a weaker global economy as a result of COVID-19 pandemic and falling industrial electricity demand ...
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- San Jose City I Power Corp, Philippines
- Borneo Indobara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Australian Coal Association
- Formosa Plastics Group - Taiwan
- Planning Commission, India
- Maharashtra Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Timah Investasi Mineral - Indoneisa
- Sree Jayajothi Cements Limited - India
- Ministry of Mines - Canada
- Dalmia Cement Bharat India
- Independent Power Producers Association of India
- Altura Mining Limited, Indonesia
- Ind-Barath Power Infra Limited - India
- Manunggal Multi Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Port Waratah Coal Services - Australia
- Eastern Energy - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kartika Selabumi Mining - Indonesia
- Australian Commodity Traders Exchange
- The State Trading Corporation of India Ltd
- McConnell Dowell - Australia
- Wilmar Investment Holdings
- Coalindo Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Business Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- Chamber of Mines of South Africa
- Sakthi Sugars Limited - India
- Minerals Council of Australia
- CNBM International Corporation - China
- Bhushan Steel Limited - India
- Essar Steel Hazira Ltd - India
- CIMB Investment Bank - Malaysia
- Power Finance Corporation Ltd., India
- Toyota Tsusho Corporation, Japan
- Kalimantan Lumbung Energi - Indonesia
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- Semirara Mining Corp, Philippines
- Aditya Birla Group - India
- Indian Oil Corporation Limited
- Gujarat Mineral Development Corp Ltd - India
- Barasentosa Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Petron Corporation, Philippines
- Rio Tinto Coal - Australia
- Coal and Oil Company - UAE
- Indonesian Coal Mining Association
- SN Aboitiz Power Inc, Philippines
- Economic Council, Georgia
- GAC Shipping (India) Pvt Ltd
- Goldman Sachs - Singapore
- Bayan Resources Tbk. - Indonesia
- Bulk Trading Sa - Switzerland
- New Zealand Coal & Carbon
- PNOC Exploration Corporation - Philippines
- Sical Logistics Limited - India
- Orica Mining Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Price Waterhouse Coopers - Russia
- Ministry of Transport, Egypt
- Samtan Co., Ltd - South Korea
- PowerSource Philippines DevCo
- The Treasury - Australian Government
- Sarangani Energy Corporation, Philippines
- Intertek Mineral Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Rashtriya Ispat Nigam Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- Uttam Galva Steels Limited - India
- Energy Development Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- Orica Australia Pty. Ltd.
- SMC Global Power, Philippines
- Madhucon Powers Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Sidhee Cement - India
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Merrill Lynch Commodities Europe
- Romanian Commodities Exchange
- Ambuja Cements Ltd - India
- Bukit Baiduri Energy - Indonesia
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- Larsen & Toubro Limited - India
- Trasteel International SA, Italy
- Karbindo Abesyapradhi - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Tamil Nadu electricity Board
- MS Steel International - UAE
- London Commodity Brokers - England
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Baramulti Group, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Chettinad Cement Corporation Ltd - India
- PTC India Limited - India
- Oldendorff Carriers - Singapore
- TeaM Sual Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Coastal Gujarat Power Limited - India
- Africa Commodities Group - South Africa
- Antam Resourcindo - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Marubeni Corporation - India
- Anglo American - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Central Electricity Authority - India
- Bukit Makmur.PT - Indonesia
- Mintek Dendrill Indonesia
- Maheswari Brothers Coal Limited - India
- Indo Tambangraya Megah - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Latin American Coal - Colombia
- VISA Power Limited - India
- Grasim Industreis Ltd - India
- Kideco Jaya Agung - Indonesia
- Thai Mozambique Logistica
- Star Paper Mills Limited - India
- Singapore Mercantile Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Posco Energy - South Korea
- Makarim & Taira - Indonesia
- LBH Netherlands Bv - Netherlands
- Siam City Cement PLC, Thailand
- Central Java Power - Indonesia
- Attock Cement Pakistan Limited
- Commonwealth Bank - Australia
- Banpu Public Company Limited - Thailand
- Edison Trading Spa - Italy
- Deloitte Consulting - India
- Bukit Asam (Persero) Tbk - Indonesia
- Parliament of New Zealand
- Krishnapatnam Port Company Ltd. - India
- Riau Bara Harum - Indonesia
- International Coal Ventures Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- SMG Consultants - Indonesia
- IEA Clean Coal Centre - UK
- Mjunction Services Limited - India
- Energy Link Ltd, New Zealand
- Renaissance Capital - South Africa
- Semirara Mining and Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Electricity Authority, New Zealand
- Therma Luzon, Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- IHS Mccloskey Coal Group - USA
- Indika Energy - Indonesia
- Sojitz Corporation - Japan
- Standard Chartered Bank - UAE
- OPG Power Generation Pvt Ltd - India
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- Videocon Industries ltd - India
- Meenaskhi Energy Private Limited - India
- Xindia Steels Limited - India
- Tata Chemicals Ltd - India
- Iligan Light & Power Inc, Philippines
- Bharathi Cement Corporation - India
- Kumho Petrochemical, South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Generating Authority of Thailand
- Salva Resources Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Indogreen Group - Indonesia
- Directorate Of Revenue Intelligence - India
- Thiess Contractors Indonesia
- Bangladesh Power Developement Board
- Ministry of Finance - Indonesia
- Bhatia International Limited - India
- Eastern Coal Council - USA
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Meralco Power Generation, Philippines
- ICICI Bank Limited - India
- Leighton Contractors Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Heidelberg Cement - Germany
- Indian Energy Exchange, India
- Siam City Cement - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- ASAPP Information Group - India
- India Bulls Power Limited - India
- Mercator Lines Limited - India
- Simpson Spence & Young - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kobexindo Tractors - Indoneisa
- South Luzon Thermal Energy Corporation
- Savvy Resources Ltd - HongKong
- Gujarat Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Bhoruka Overseas - Indonesia
- Cigading International Bulk Terminal - Indonesia
- The University of Queensland
- White Energy Company Limited
- Global Green Power PLC Corporation, Philippines
- Interocean Group of Companies - India
- Global Coal Blending Company Limited - Australia
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