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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, 31 July 19
INDIA'S 2019 THERMAL COAL IMPORTS SEEN AT 180-185 MLN T - WOODMAC
India is expected to import 180-185 million tonnes of thermal coal in 2019, said Dale Hazelton, head of thermal coal at consultancy Wood Mackenzie. ...
Wednesday, 31 July 19
SHIPPING MARKET INSIGHT - INTERMODAL
It was a fairly busy week in the dry S&P market. Despite the ease of Capesize rates which impacted Panamaxes as well, interest from potential b ...
Sunday, 28 July 19
ULTRAMAX - INDONESIAN COAL CARGOES SAW A 63,000DWT SHIP FIXING DELIVERY FOR A SOUTH CHINA TRIP VIA INDONESIA, REDELIVERY CHINA, AT $11,700 - BALTIC BRIEFING
Capesize
The market was a white knuckled ride this past week as a large downside movement shed value quickly leaving many in bewilderment. The ...
Wednesday, 24 July 19
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.27 PCT - XINHUA
China Taiyuan coal transaction price index stood at 138.78 points Monday, down 0.27 percent week on week.
The index, released by Chi ...
Wednesday, 24 July 19
SHIPPING MARKET INSIGHT - INTERMODAL
Tonnes of ink has been spent analysing the rebound of the dry bulk market the last weeks with the most representative example being the rising perf ...
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- Coastal Gujarat Power Limited - India
- Aboitiz Power Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Cement Manufacturers Association - India
- Meralco Power Generation, Philippines
- Edison Trading Spa - Italy
- Indian Oil Corporation Limited
- Maharashtra Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- TNB Fuel Sdn Bhd - Malaysia
- Tamil Nadu electricity Board
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Bhoruka Overseas - Indonesia
- Siam City Cement - Thailand
- Central Java Power - Indonesia
- Oldendorff Carriers - Singapore
- Coalindo Energy - Indonesia
- Chamber of Mines of South Africa
- Bhushan Steel Limited - India
- The University of Queensland
- Thiess Contractors Indonesia
- SMC Global Power, Philippines
- Wilmar Investment Holdings
- Banpu Public Company Limited - Thailand
- Attock Cement Pakistan Limited
- Deloitte Consulting - India
- Global Green Power PLC Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Australian Coal Association
- Energy Link Ltd, New Zealand
- Sarangani Energy Corporation, Philippines
- Australian Commodity Traders Exchange
- GVK Power & Infra Limited - India
- Mjunction Services Limited - India
- Therma Luzon, Inc, Philippines
- Mercator Lines Limited - India
- GMR Energy Limited - India
- LBH Netherlands Bv - Netherlands
- Romanian Commodities Exchange
- New Zealand Coal & Carbon
- Lanco Infratech Ltd - India
- Planning Commission, India
- Makarim & Taira - Indonesia
- Interocean Group of Companies - India
- Xindia Steels Limited - India
- Independent Power Producers Association of India
- Antam Resourcindo - Indonesia
- Latin American Coal - Colombia
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- Riau Bara Harum - Indonesia
- Timah Investasi Mineral - Indoneisa
- Borneo Indobara - Indonesia
- Kaltim Prima Coal - Indonesia
- Salva Resources Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Siam City Cement PLC, Thailand
- Leighton Contractors Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- Global Business Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Directorate Of Revenue Intelligence - India
- Commonwealth Bank - Australia
- ASAPP Information Group - India
- Sindya Power Generating Company Private Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kapuas Tunggal Persada - Indonesia
- Medco Energi Mining Internasional
- Bukit Baiduri Energy - Indonesia
- Minerals Council of Australia
- Formosa Plastics Group - Taiwan
- Bukit Makmur.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- Bhatia International Limited - India
- Coal and Oil Company - UAE
- SMG Consultants - Indonesia
- Uttam Galva Steels Limited - India
- Aditya Birla Group - India
- Ministry of Finance - Indonesia
- PTC India Limited - India
- The State Trading Corporation of India Ltd
- Trasteel International SA, Italy
- Iligan Light & Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Metalloyd Limited - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- Indo Tambangraya Megah - Indonesia
- Sree Jayajothi Cements Limited - India
- Miang Besar Coal Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- San Jose City I Power Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Ministry of Mines - Canada
- Port Waratah Coal Services - Australia
- Maheswari Brothers Coal Limited - India
- Vedanta Resources Plc - India
- Electricity Generating Authority of Thailand
- Essar Steel Hazira Ltd - India
- Central Electricity Authority - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Energy Exchange, India
- Bahari Cakrawala Sebuku - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Eastern Coal Council - USA
- SN Aboitiz Power Inc, Philippines
- Goldman Sachs - Singapore
- Economic Council, Georgia
- Gujarat Mineral Development Corp Ltd - India
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- Parliament of New Zealand
- Mintek Dendrill Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Holcim Trading Pte Ltd - Singapore
- PNOC Exploration Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Grasim Industreis Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Malabar Cements Ltd - India
- Georgia Ports Authority, United States
- Standard Chartered Bank - UAE
- The Treasury - Australian Government
- Thai Mozambique Logistica
- TeaM Sual Corporation - Philippines
- PowerSource Philippines DevCo
- Singapore Mercantile Exchange
- International Coal Ventures Pvt Ltd - India
- Bangladesh Power Developement Board
- Kobexindo Tractors - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kohat Cement Company Ltd. - Pakistan
- Tata Chemicals Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Energy Development Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Eastern Energy - Thailand
- VISA Power Limited - India
- Straits Asia Resources Limited - Singapore
- Simpson Spence & Young - Indonesia
- MS Steel International - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bulk Trading Sa - Switzerland
- European Bulk Services B.V. - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Carbofer General Trading SA - India
- Sojitz Corporation - Japan
- Intertek Mineral Services - Indonesia
- Altura Mining Limited, Indonesia
- Sical Logistics Limited - India
- Ministry of Transport, Egypt
- Madhucon Powers Ltd - India
- Semirara Mining Corp, Philippines
- ICICI Bank Limited - India
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- Heidelberg Cement - Germany
- Jorong Barutama Greston.PT - Indonesia
- Marubeni Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Indika Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Africa Commodities Group - South Africa
- OPG Power Generation Pvt Ltd - India
- CNBM International Corporation - China
- Posco Energy - South Korea
- IHS Mccloskey Coal Group - USA
- Pendopo Energi Batubara - Indonesia
- McConnell Dowell - Australia
- London Commodity Brokers - England
- Karaikal Port Pvt Ltd - India
- Agrawal Coal Company - India
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- Manunggal Multi Energi - Indonesia
- Ambuja Cements Ltd - India
- Sakthi Sugars Limited - India
- Ceylon Electricity Board - Sri Lanka
- Dalmia Cement Bharat India
- Gujarat Sidhee Cement - India
- India Bulls Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- Orica Australia Pty. Ltd.
- Kartika Selabumi Mining - Indonesia
- Wood Mackenzie - Singapore
- Toyota Tsusho Corporation, Japan
- Petron Corporation, Philippines
- Mercuria Energy - Indonesia
- Orica Mining Services - Indonesia
- Baramulti Group, Indonesia
- Chettinad Cement Corporation Ltd - India
- Kumho Petrochemical, South Korea
- Star Paper Mills Limited - India
- Kepco SPC Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Electricity Authority, New Zealand
- Barasentosa Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
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