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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, 24 October 19
AUSTRALIA'S HOPES TO EXPAND COAL EXPORTS IN SOUTH-EAST ASIA 'DELUSIONAL', EXPERTS SAY - THE GUARDIAN
The number of new coal-fired power plants starting construction across south-east Asia has fallen markedly over the past two years as Australia has ...
Thursday, 24 October 19
PANAMAX: NEGATIVE SENTIMENT IN THE MARKET AS IT CONTINUES TO WEAKEN - FEARNLEYS
Capesize
The market has continued to slide the last week, as lack of fresh requirements and a slight oversupply of tonnage heading towards Sout ...
Wednesday, 23 October 19
CHINA'S 2019 COAL IMPORTS SET TO RISE MORE THAN 10%: ANALYSTS - REUTERS
China, the world’s top coal buyer, is on track to boost imports of the fuel by more than 10% this year, traders and analysts said on Tuesday, ...
Wednesday, 23 October 19
SHIPPING MARKET INSIGHT - INTERMODAL
Moving closer to the end of the year, we are facing what the market was expecting for quite a while, the ship repair sector booming with the shipya ...
Tuesday, 22 October 19
DRY BULK: DESPITE THE DOWNWARD CORRECTION NOTED OVER THE PAST MONTH, RATES ARE STILL HOLDING OFF AT FAVORABLE LEVELS - ALLIED SHIPPING
Despite the downward correction that has been noted in the dry bulk market over the past month, rates are still holding off at favorable levels. Ev ...
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- Interocean Group of Companies - India
- PNOC Exploration Corporation - Philippines
- Energy Development Corp, Philippines
- PowerSource Philippines DevCo
- Holcim Trading Pte Ltd - Singapore
- IEA Clean Coal Centre - UK
- Coal and Oil Company - UAE
- Rio Tinto Coal - Australia
- Electricity Authority, New Zealand
- Kepco SPC Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Agrawal Coal Company - India
- South Luzon Thermal Energy Corporation
- Bukit Baiduri Energy - Indonesia
- Madhucon Powers Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Ambuja Cements Ltd - India
- The University of Queensland
- MS Steel International - UAE
- Lanco Infratech Ltd - India
- Minerals Council of Australia
- Chettinad Cement Corporation Ltd - India
- Makarim & Taira - Indonesia
- Attock Cement Pakistan Limited
- Bangladesh Power Developement Board
- Videocon Industries ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Economic Council, Georgia
- Thai Mozambique Logistica
- Krishnapatnam Port Company Ltd. - India
- ASAPP Information Group - India
- Sindya Power Generating Company Private Ltd
- Singapore Mercantile Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Mines - Canada
- International Coal Ventures Pvt Ltd - India
- Aditya Birla Group - India
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- Mjunction Services Limited - India
- Medco Energi Mining Internasional
- Kideco Jaya Agung - Indonesia
- Wood Mackenzie - Singapore
- Aboitiz Power Corporation - Philippines
- Orica Mining Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Independent Power Producers Association of India
- Jaiprakash Power Ventures ltd
- Essar Steel Hazira Ltd - India
- GVK Power & Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Grasim Industreis Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Vedanta Resources Plc - India
- Bulk Trading Sa - Switzerland
- Kapuas Tunggal Persada - Indonesia
- Commonwealth Bank - Australia
- Mercator Lines Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Indogreen Group - Indonesia
- Port Waratah Coal Services - Australia
- Banpu Public Company Limited - Thailand
- Karaikal Port Pvt Ltd - India
- Deloitte Consulting - India
- Carbofer General Trading SA - India
- Siam City Cement PLC, Thailand
- Timah Investasi Mineral - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Bhatia International Limited - India
- Indonesian Coal Mining Association
- Kaltim Prima Coal - Indonesia
- Petron Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Bharathi Cement Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- McConnell Dowell - Australia
- Ceylon Electricity Board - Sri Lanka
- Romanian Commodities Exchange
- Kumho Petrochemical, South Korea
- Merrill Lynch Commodities Europe
- Georgia Ports Authority, United States
- Bayan Resources Tbk. - Indonesia
- Central Java Power - Indonesia
- Global Business Power Corporation, Philippines
- Chamber of Mines of South Africa
- Edison Trading Spa - Italy
- Toyota Tsusho Corporation, Japan
- Jindal Steel & Power Ltd - India
- TeaM Sual Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Siam City Cement - Thailand
- Metalloyd Limited - United Kingdom
- India Bulls Power Limited - India
- Samtan Co., Ltd - South Korea
- Sarangani Energy Corporation, Philippines
- Xindia Steels Limited - India
- Eastern Coal Council - USA
- Central Electricity Authority - India
- Savvy Resources Ltd - HongKong
- SMC Global Power, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mintek Dendrill Indonesia
- The State Trading Corporation of India Ltd
- Miang Besar Coal Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Standard Chartered Bank - UAE
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Salva Resources Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Indian Energy Exchange, India
- Kalimantan Lumbung Energi - Indonesia
- GMR Energy Limited - India
- Maheswari Brothers Coal Limited - India
- Bhushan Steel Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Posco Energy - South Korea
- SN Aboitiz Power Inc, Philippines
- Borneo Indobara - Indonesia
- European Bulk Services B.V. - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Dalmia Cement Bharat India
- Meralco Power Generation, Philippines
- Cement Manufacturers Association - India
- Intertek Mineral Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Global Green Power PLC Corporation, Philippines
- Wilmar Investment Holdings
- ICICI Bank Limited - India
- VISA Power Limited - India
- Altura Mining Limited, Indonesia
- Ministry of Finance - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Tamil Nadu electricity Board
- London Commodity Brokers - England
- Africa Commodities Group - South Africa
- Australian Coal Association
- Australian Commodity Traders Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- OPG Power Generation Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Therma Luzon, Inc, Philippines
- San Jose City I Power Corp, Philippines
- New Zealand Coal & Carbon
- AsiaOL BioFuels Corp., Philippines
- Bhoruka Overseas - Indonesia
- Ind-Barath Power Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
- Parliament of New Zealand
- Orica Australia Pty. Ltd.
- Price Waterhouse Coopers - Russia
- Indo Tambangraya Megah - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Sakthi Sugars Limited - India
- Riau Bara Harum - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining Corp, Philippines
- Star Paper Mills Limited - India
- Antam Resourcindo - Indonesia
- Malabar Cements Ltd - India
- Indian Oil Corporation Limited
- PTC India Limited - India
- SMG Consultants - Indonesia
- Eastern Energy - Thailand
- Heidelberg Cement - Germany
- Iligan Light & Power Inc, Philippines
- Uttam Galva Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Planning Commission, India
- Meenaskhi Energy Private Limited - India
- Goldman Sachs - Singapore
- Energy Link Ltd, New Zealand
- Leighton Contractors Pty Ltd - Australia
- Mercuria Energy - Indonesia
- CIMB Investment Bank - Malaysia
- The Treasury - Australian Government
- White Energy Company Limited
- Indika Energy - Indonesia
- Baramulti Group, Indonesia
- Barasentosa Lestari - Indonesia
- CNBM International Corporation - China
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Coastal Gujarat Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Kobexindo Tractors - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Sidhee Cement - India
- Binh Thuan Hamico - Vietnam
- Renaissance Capital - South Africa
- Coalindo Energy - Indonesia
- Larsen & Toubro Limited - India
- Vizag Seaport Private Limited - India
- Sical Logistics Limited - India
- Trasteel International SA, Italy
- Gujarat Mineral Development Corp Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Oldendorff Carriers - Singapore
- Sree Jayajothi Cements Limited - India
- Sojitz Corporation - Japan
- Marubeni Corporation - India
- Latin American Coal - Colombia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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