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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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Tuesday, 23 January 18
OIL MARKET ANALYSIS - ALLIED
Brent oil futures hit a three year high on January 16th touching around USD 70.30 before falling back down to around USD 68.60 at the Time of this ...
Friday, 19 January 18
U.S. WEEKLY COAL OUTPUT WAS 13.5 MMST FOR THE WEEK ENDING JANUARY 13, EIA SAYS
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 13.5 million short tons ...
Thursday, 18 January 18
WORLD TRADE IN HARD COAL RISES BY 1.5% IN 2017 - KOHLENIMPORTEURE
Press Release: World Trade in Hard Coal Rises by 1.5% in 2017. German Steam Coal Imports Plummet by 15% in 2017 – in Contrast to Other Sector ...
Wednesday, 17 January 18
SHIPPING MARKET INSIGHT - INTERMODAL
As we are now well into the first month of 2018, the mood across the entire offshore industry undeniably remains rather positive following the oil ...
Monday, 15 January 18
THE FREIGHT RATES ARE EXPECTED TO BE FLAT TO WEAK THIS WEEK - VISTAAR
COALspot.com: The daily average earnings for Supramax, for the route Indonesia to India passing through Singapore has stayed firm, week over week, ...
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- Economic Council, Georgia
- MS Steel International - UAE
- Kepco SPC Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- Savvy Resources Ltd - HongKong
- Malabar Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Meralco Power Generation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Kideco Jaya Agung - Indonesia
- Orica Australia Pty. Ltd.
- Ambuja Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- The Treasury - Australian Government
- Indian Energy Exchange, India
- Therma Luzon, Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Bharathi Cement Corporation - India
- Georgia Ports Authority, United States
- GVK Power & Infra Limited - India
- Simpson Spence & Young - Indonesia
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- Renaissance Capital - South Africa
- Videocon Industries ltd - India
- Pendopo Energi Batubara - Indonesia
- Siam City Cement PLC, Thailand
- Ind-Barath Power Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Parliament of New Zealand
- Kapuas Tunggal Persada - Indonesia
- SMG Consultants - Indonesia
- Merrill Lynch Commodities Europe
- London Commodity Brokers - England
- Neyveli Lignite Corporation Ltd, - India
- Bukit Baiduri Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Planning Commission, India
- SMC Global Power, Philippines
- Chamber of Mines of South Africa
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Central Electricity Authority - India
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Metalloyd Limited - United Kingdom
- Australian Coal Association
- Essar Steel Hazira Ltd - India
- Indian Oil Corporation Limited
- Gujarat Mineral Development Corp Ltd - India
- Global Green Power PLC Corporation, Philippines
- Borneo Indobara - Indonesia
- Kumho Petrochemical, South Korea
- Africa Commodities Group - South Africa
- Carbofer General Trading SA - India
- Sree Jayajothi Cements Limited - India
- Kaltim Prima Coal - Indonesia
- The University of Queensland
- CIMB Investment Bank - Malaysia
- Siam City Cement - Thailand
- Makarim & Taira - Indonesia
- Indonesian Coal Mining Association
- PTC India Limited - India
- Globalindo Alam Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Meenaskhi Energy Private Limited - India
- Rio Tinto Coal - Australia
- Riau Bara Harum - Indonesia
- Kobexindo Tractors - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Attock Cement Pakistan Limited
- PNOC Exploration Corporation - Philippines
- Bhatia International Limited - India
- Sarangani Energy Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Coalindo Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Star Paper Mills Limited - India
- Barasentosa Lestari - Indonesia
- Thai Mozambique Logistica
- Kalimantan Lumbung Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Grasim Industreis Ltd - India
- ICICI Bank Limited - India
- Independent Power Producers Association of India
- Electricity Authority, New Zealand
- Samtan Co., Ltd - South Korea
- India Bulls Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Toyota Tsusho Corporation, Japan
- Pipit Mutiara Jaya. PT, Indonesia
- Sojitz Corporation - Japan
- Timah Investasi Mineral - Indoneisa
- Maheswari Brothers Coal Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Posco Energy - South Korea
- CNBM International Corporation - China
- Interocean Group of Companies - India
- McConnell Dowell - Australia
- Trasteel International SA, Italy
- Vijayanagar Sugar Pvt Ltd - India
- Tata Chemicals Ltd - India
- Bhushan Steel Limited - India
- Directorate General of MIneral and Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- White Energy Company Limited
- Bhoruka Overseas - Indonesia
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Medco Energi Mining Internasional
- Mercuria Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Romanian Commodities Exchange
- TeaM Sual Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Oldendorff Carriers - Singapore
- Wood Mackenzie - Singapore
- Holcim Trading Pte Ltd - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Agrawal Coal Company - India
- Aditya Birla Group - India
- Madhucon Powers Ltd - India
- Vedanta Resources Plc - India
- Krishnapatnam Port Company Ltd. - India
- Jaiprakash Power Ventures ltd
- Orica Mining Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- Uttam Galva Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- SN Aboitiz Power Inc, Philippines
- Singapore Mercantile Exchange
- Leighton Contractors Pty Ltd - Australia
- Ministry of Transport, Egypt
- Port Waratah Coal Services - Australia
- Eastern Energy - Thailand
- Ministry of Mines - Canada
- Commonwealth Bank - Australia
- Cigading International Bulk Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Straits Asia Resources Limited - Singapore
- Binh Thuan Hamico - Vietnam
- Global Coal Blending Company Limited - Australia
- Electricity Generating Authority of Thailand
- AsiaOL BioFuels Corp., Philippines
- Wilmar Investment Holdings
- PowerSource Philippines DevCo
- Ministry of Finance - Indonesia
- The State Trading Corporation of India Ltd
- Edison Trading Spa - Italy
- Aboitiz Power Corporation - Philippines
- Antam Resourcindo - Indonesia
- Deloitte Consulting - India
- OPG Power Generation Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Standard Chartered Bank - UAE
- Mjunction Services Limited - India
- IHS Mccloskey Coal Group - USA
- ASAPP Information Group - India
- Bulk Trading Sa - Switzerland
- Xindia Steels Limited - India
- Anglo American - United Kingdom
- Sical Logistics Limited - India
- VISA Power Limited - India
- Australian Commodity Traders Exchange
- Coastal Gujarat Power Limited - India
- Salva Resources Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Eastern Coal Council - USA
- Sakthi Sugars Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- New Zealand Coal & Carbon
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercator Lines Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Latin American Coal - Colombia
- Parry Sugars Refinery, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- Dalmia Cement Bharat India
- Bahari Cakrawala Sebuku - Indonesia
- Indika Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Energy Link Ltd, New Zealand
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Thiess Contractors Indonesia
- Karaikal Port Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Tamil Nadu electricity Board
- Global Business Power Corporation, Philippines
- Goldman Sachs - Singapore
- Semirara Mining and Power Corporation, Philippines
- GMR Energy Limited - India
- Gujarat Sidhee Cement - India
- Baramulti Group, Indonesia
- Formosa Plastics Group - Taiwan
- GAC Shipping (India) Pvt Ltd
- Kartika Selabumi Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Cement Manufacturers Association - India
- Minerals Council of Australia
- Bangladesh Power Developement Board
- Heidelberg Cement - Germany
- Central Java Power - Indonesia
- Banpu Public Company Limited - Thailand
- Intertek Mineral Services - Indonesia
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