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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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Saturday, 18 January 20
BIMCO: LOW-SULPHUR FUEL SALE JUMPS TO A 70% SHARE IN SINGAPORE, AS THE IMO 2020 SULPHUR CAP KICKS IN
The final quarter of 2019 marked a massive decline of HSFO sales, as the industry transitioned into compliance of the IMO 2020 Sulphur Cap (IMO2020 ...
Saturday, 18 January 20
GERMAN STEAM COAL IMPORTS IN 2019 PLUMMETED BY 17 % - COAL IMPORTERS ASSOCIATION
Press Release: According to preliminary calculations by the German Coal Importers Association (Verein der Kohlenimporteure e. V.), world trade in h ...
Saturday, 18 January 20
A 61,400 DWT FIXED FROM SOUTH EAST ASIA DELIVERY EAST KALIMANTAN REDELIVERY WEST COAST INDIA IN THE LOW $7,000S - BALTIC BRIEFING
Capesize
The market was relatively stable over this past week putting an end to the past months of more extreme declines. While the Capesize 5T ...
Friday, 17 January 20
EIA ESTIMATES THAT U.S. COAL PRODUCTION DECLINED BY 65 MMST (9%) TO 690 MMST IN 2019. IN 2020, COAL PRODUCTION WILL DECLINE BY A FURTHER 14% TO 597 MMST
U.S. Coal Supply.
EIA estimates that U.S. coal production declined by 65 million short tons (MMst) (9%) to 690 MMst in 2019. In 2020, EIA ...
Friday, 17 January 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index, a gauge of coal p ...
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- Port Waratah Coal Services - Australia
- Jindal Steel & Power Ltd - India
- Antam Resourcindo - Indonesia
- GAC Shipping (India) Pvt Ltd
- Kartika Selabumi Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- Electricity Generating Authority of Thailand
- Asmin Koalindo Tuhup - Indonesia
- Merrill Lynch Commodities Europe
- Indogreen Group - Indonesia
- Marubeni Corporation - India
- Carbofer General Trading SA - India
- Jaiprakash Power Ventures ltd
- Agrawal Coal Company - India
- Electricity Authority, New Zealand
- McConnell Dowell - Australia
- Global Green Power PLC Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Gujarat Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Meenaskhi Energy Private Limited - India
- Planning Commission, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indika Energy - Indonesia
- ICICI Bank Limited - India
- Sojitz Corporation - Japan
- Madhucon Powers Ltd - India
- Simpson Spence & Young - Indonesia
- Vizag Seaport Private Limited - India
- PTC India Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Barasentosa Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Independent Power Producers Association of India
- Neyveli Lignite Corporation Ltd, - India
- Central Electricity Authority - India
- Tata Chemicals Ltd - India
- Banpu Public Company Limited - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Bhoruka Overseas - Indonesia
- Mercuria Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Sakthi Sugars Limited - India
- Directorate Of Revenue Intelligence - India
- Orica Australia Pty. Ltd.
- Xindia Steels Limited - India
- Siam City Cement PLC, Thailand
- Jorong Barutama Greston.PT - Indonesia
- Georgia Ports Authority, United States
- Borneo Indobara - Indonesia
- Videocon Industries ltd - India
- Kepco SPC Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Renaissance Capital - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Bayan Resources Tbk. - Indonesia
- Wood Mackenzie - Singapore
- LBH Netherlands Bv - Netherlands
- Makarim & Taira - Indonesia
- Latin American Coal - Colombia
- Malabar Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Central Java Power - Indonesia
- MS Steel International - UAE
- Kaltim Prima Coal - Indonesia
- Trasteel International SA, Italy
- New Zealand Coal & Carbon
- The University of Queensland
- Chamber of Mines of South Africa
- Energy Link Ltd, New Zealand
- Sical Logistics Limited - India
- Petron Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Orica Mining Services - Indonesia
- Binh Thuan Hamico - Vietnam
- Global Coal Blending Company Limited - Australia
- Indonesian Coal Mining Association
- Kideco Jaya Agung - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dalmia Cement Bharat India
- Bhushan Steel Limited - India
- PetroVietnam Power Coal Import and Supply Company
- VISA Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Salva Resources Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- CNBM International Corporation - China
- White Energy Company Limited
- Indo Tambangraya Megah - Indonesia
- Attock Cement Pakistan Limited
- IHS Mccloskey Coal Group - USA
- GVK Power & Infra Limited - India
- Savvy Resources Ltd - HongKong
- Cement Manufacturers Association - India
- Chettinad Cement Corporation Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Ministry of Mines - Canada
- Gujarat Mineral Development Corp Ltd - India
- Bangladesh Power Developement Board
- Power Finance Corporation Ltd., India
- Anglo American - United Kingdom
- Ministry of Finance - Indonesia
- Semirara Mining Corp, Philippines
- Commonwealth Bank - Australia
- Krishnapatnam Port Company Ltd. - India
- Toyota Tsusho Corporation, Japan
- OPG Power Generation Pvt Ltd - India
- Parliament of New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Sidhee Cement - India
- Eastern Energy - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Oil Corporation Limited
- Star Paper Mills Limited - India
- SMC Global Power, Philippines
- Leighton Contractors Pty Ltd - Australia
- Goldman Sachs - Singapore
- Iligan Light & Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IEA Clean Coal Centre - UK
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- PNOC Exploration Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Kobexindo Tractors - Indoneisa
- Wilmar Investment Holdings
- Holcim Trading Pte Ltd - Singapore
- Africa Commodities Group - South Africa
- Standard Chartered Bank - UAE
- Miang Besar Coal Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Parry Sugars Refinery, India
- Heidelberg Cement - Germany
- Grasim Industreis Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Samtan Co., Ltd - South Korea
- Ambuja Cements Ltd - India
- Aditya Birla Group - India
- Tamil Nadu electricity Board
- Karaikal Port Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Mintek Dendrill Indonesia
- Altura Mining Limited, Indonesia
- Larsen & Toubro Limited - India
- ASAPP Information Group - India
- Thai Mozambique Logistica
- Essar Steel Hazira Ltd - India
- Ministry of Transport, Egypt
- San Jose City I Power Corp, Philippines
- Lanco Infratech Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GMR Energy Limited - India
- Metalloyd Limited - United Kingdom
- Therma Luzon, Inc, Philippines
- Mercator Lines Limited - India
- Deloitte Consulting - India
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Makmur.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- SMG Consultants - Indonesia
- Medco Energi Mining Internasional
- Pendopo Energi Batubara - Indonesia
- The State Trading Corporation of India Ltd
- Rio Tinto Coal - Australia
- CIMB Investment Bank - Malaysia
- South Luzon Thermal Energy Corporation
- Bulk Trading Sa - Switzerland
- Alfred C Toepfer International GmbH - Germany
- Oldendorff Carriers - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Minerals Council of Australia
- Mjunction Services Limited - India
- Edison Trading Spa - Italy
- India Bulls Power Limited - India
- PowerSource Philippines DevCo
- Directorate General of MIneral and Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kumho Petrochemical, South Korea
- Thiess Contractors Indonesia
- Energy Development Corp, Philippines
- London Commodity Brokers - England
- International Coal Ventures Pvt Ltd - India
- Economic Council, Georgia
- Kohat Cement Company Ltd. - Pakistan
- Meralco Power Generation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Coal and Oil Company - UAE
- The Treasury - Australian Government
- Siam City Cement - Thailand
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bharathi Cement Corporation - India
- Baramulti Group, Indonesia
- Romanian Commodities Exchange
- Globalindo Alam Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Australian Coal Association
- Sindya Power Generating Company Private Ltd
- Riau Bara Harum - Indonesia
- Straits Asia Resources Limited - Singapore
- Interocean Group of Companies - India
- Aboitiz Power Corporation - Philippines
- Singapore Mercantile Exchange
- Timah Investasi Mineral - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Coalindo Energy - Indonesia
- Posco Energy - South Korea
- Australian Commodity Traders Exchange
- Vedanta Resources Plc - India
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