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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, 13 February 19
MALAYSIA WAS THE REGION'S LARGEST COAL IMPORTER WITH 34 MT IN 2018, UP 25% Y-O-Y
Although coal market in 2018 started with strong prices, starting in the beginning of the second half of 2018, the international spot prices for co ...
Wednesday, 13 February 19
SHIPPING MARKET INSIGHT - INTERMODAL
If there is one word that can describe the current shipping environment then that this word is most probably “volatility.” The sentimen ...
Saturday, 09 February 19
SUPRAMAX: A 63,000-TONNER WAS REPORTED FIXED DELIVERY FOR AN EAST KALIMANTAN TRIP, REDELIVERY WEST COAST INDIA, AT $9,250 - THE BALTIC BRIEFING
Cape
The Vale disaster weighed heavily on the market for big ships, with uncertainty about shipments/future exports leading to a sharp drop in ...
Friday, 08 February 19
LOWER-QUALITY INDONESIA EXPORTS ROSE 39 MT IN 2018 YOY PRIMARILY IN RESPONSE TO INCREASED DEMAND FROM CHINA AND INDIA - PEABODY
"Underlying seaborne met and thermal coal conditions remain quite positive and the pace of U.S. coal-fueled power plant retirements is expecte ...
Thursday, 07 February 19
QATAR CAN GAIN FROM DECLINING COAL - THE PENINSULA
With North America and Europe closing down their old coal and nuclear plants, major gas exporters like Qatar can and should gain market share. With ...
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- Aboitiz Power Corporation - Philippines
- Thiess Contractors Indonesia
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Bharathi Cement Corporation - India
- Bulk Trading Sa - Switzerland
- Meenaskhi Energy Private Limited - India
- Dalmia Cement Bharat India
- Price Waterhouse Coopers - Russia
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- Anglo American - United Kingdom
- Mercuria Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Central Java Power - Indonesia
- Straits Asia Resources Limited - Singapore
- Romanian Commodities Exchange
- Georgia Ports Authority, United States
- Mjunction Services Limited - India
- Global Green Power PLC Corporation, Philippines
- Sical Logistics Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Star Paper Mills Limited - India
- The University of Queensland
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Eastern Energy - Thailand
- Indian Oil Corporation Limited
- Gujarat Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Holcim Trading Pte Ltd - Singapore
- European Bulk Services B.V. - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Transport, Egypt
- Indo Tambangraya Megah - Indonesia
- Electricity Generating Authority of Thailand
- Posco Energy - South Korea
- Toyota Tsusho Corporation, Japan
- The State Trading Corporation of India Ltd
- Orica Mining Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- San Jose City I Power Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Karaikal Port Pvt Ltd - India
- Indogreen Group - Indonesia
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Sidhee Cement - India
- Africa Commodities Group - South Africa
- Malabar Cements Ltd - India
- Attock Cement Pakistan Limited
- Sakthi Sugars Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Pendopo Energi Batubara - Indonesia
- Edison Trading Spa - Italy
- Billiton Holdings Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- Samtan Co., Ltd - South Korea
- Binh Thuan Hamico - Vietnam
- SMC Global Power, Philippines
- Bayan Resources Tbk. - Indonesia
- PowerSource Philippines DevCo
- Bukit Asam (Persero) Tbk - Indonesia
- GMR Energy Limited - India
- CNBM International Corporation - China
- Metalloyd Limited - United Kingdom
- LBH Netherlands Bv - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- Jindal Steel & Power Ltd - India
- Sojitz Corporation - Japan
- GN Power Mariveles Coal Plant, Philippines
- Kumho Petrochemical, South Korea
- PNOC Exploration Corporation - Philippines
- Australian Coal Association
- Global Coal Blending Company Limited - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- International Coal Ventures Pvt Ltd - India
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- Bhushan Steel Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Power Finance Corporation Ltd., India
- Energy Development Corp, Philippines
- The Treasury - Australian Government
- Larsen & Toubro Limited - India
- Bhatia International Limited - India
- Marubeni Corporation - India
- Carbofer General Trading SA - India
- PTC India Limited - India
- Minerals Council of Australia
- CIMB Investment Bank - Malaysia
- Commonwealth Bank - Australia
- Simpson Spence & Young - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Madhucon Powers Ltd - India
- Singapore Mercantile Exchange
- Eastern Coal Council - USA
- Indonesian Coal Mining Association
- IHS Mccloskey Coal Group - USA
- Independent Power Producers Association of India
- Formosa Plastics Group - Taiwan
- Grasim Industreis Ltd - India
- Economic Council, Georgia
- Maharashtra Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Indika Energy - Indonesia
- Coal and Oil Company - UAE
- Petron Corporation, Philippines
- Ministry of Finance - Indonesia
- Trasteel International SA, Italy
- Altura Mining Limited, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- New Zealand Coal & Carbon
- Parry Sugars Refinery, India
- Timah Investasi Mineral - Indoneisa
- Meralco Power Generation, Philippines
- Bukit Baiduri Energy - Indonesia
- Planning Commission, India
- Manunggal Multi Energi - Indonesia
- Indian Energy Exchange, India
- SN Aboitiz Power Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chamber of Mines of South Africa
- Port Waratah Coal Services - Australia
- Renaissance Capital - South Africa
- Thai Mozambique Logistica
- TeaM Sual Corporation - Philippines
- Borneo Indobara - Indonesia
- Barasentosa Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Videocon Industries ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Directorate General of MIneral and Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Ind-Barath Power Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Cement Manufacturers Association - India
- Uttam Galva Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Orica Australia Pty. Ltd.
- Directorate Of Revenue Intelligence - India
- Xindia Steels Limited - India
- Mintek Dendrill Indonesia
- Makarim & Taira - Indonesia
- Intertek Mineral Services - Indonesia
- Heidelberg Cement - Germany
- Kalimantan Lumbung Energi - Indonesia
- Vedanta Resources Plc - India
- ICICI Bank Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Salva Resources Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Parliament of New Zealand
- OPG Power Generation Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Aditya Birla Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Maheswari Brothers Coal Limited - India
- MS Steel International - UAE
- Essar Steel Hazira Ltd - India
- Rio Tinto Coal - Australia
- Goldman Sachs - Singapore
- IEA Clean Coal Centre - UK
- Neyveli Lignite Corporation Ltd, - India
- Tata Chemicals Ltd - India
- Bangladesh Power Developement Board
- Ambuja Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Semirara Mining Corp, Philippines
- Latin American Coal - Colombia
- Central Electricity Authority - India
- Standard Chartered Bank - UAE
- London Commodity Brokers - England
- Antam Resourcindo - Indonesia
- Coalindo Energy - Indonesia
- India Bulls Power Limited - India
- Interocean Group of Companies - India
- Merrill Lynch Commodities Europe
- Deloitte Consulting - India
- Sree Jayajothi Cements Limited - India
- Vizag Seaport Private Limited - India
- GVK Power & Infra Limited - India
- Wood Mackenzie - Singapore
- Therma Luzon, Inc, Philippines
- Mercator Lines Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Tamil Nadu electricity Board
- Lanco Infratech Ltd - India
- Agrawal Coal Company - India
- Chettinad Cement Corporation Ltd - India
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement PLC, Thailand
- SMG Consultants - Indonesia
- Coastal Gujarat Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- VISA Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- White Energy Company Limited
- AsiaOL BioFuels Corp., Philippines
- Rashtriya Ispat Nigam Limited - India
- Alfred C Toepfer International GmbH - Germany
- Ministry of Mines - Canada
- Australian Commodity Traders Exchange
- ASAPP Information Group - India
- PetroVietnam Power Coal Import and Supply Company
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