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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 December 17
REFINED COAL HAS MADE UP NEARLY ONE-FIFTH OF COAL-FIRED POWER GENERATION SO FAR IN 2017 - EIA
The U.S. power sector consumption of coal is increasingly shifting to refined coal, even as coal-fired electricity generation decreases. Use of ref ...
Wednesday, 13 December 17
DEMAND FOR THERMAL COAL LOOKED RELATIVELY ROBUST - DANIEL HYNES
Coal prices were a touch higher. Demand for thermal coal looked relatively robust, after reports continued to surface that Chinese authorities have ...
Wednesday, 13 December 17
SHIPPING MARKET INSIGHT - GEORGE PANAGOPOULOS
As another year is coming to an end and much has been already written about the positive reversal in the dry bulk market, we think it is interestin ...
Monday, 11 December 17
INDIA CONSUMERS ARE SAID TO BE DESPERATELY SEEKING CARGOES - DANIEL HYNES
Coal markets were stronger, as strong demand outside China continues to spur buying said Daniel Hynes, Senior Commodity Strategist at ANZ.
Acc ...
Monday, 11 December 17
CAPESIZE FFA MARKET LOOKING PROMISING MOVING FORWARD - FIS
Capesize
Another very promising day for the big ships as rates continued to firm in both oceans and the paper market ate into the backwardation s ...
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- Baramulti Group, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sical Logistics Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Deloitte Consulting - India
- Gujarat Mineral Development Corp Ltd - India
- Orica Mining Services - Indonesia
- Coastal Gujarat Power Limited - India
- Samtan Co., Ltd - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Economic Council, Georgia
- Thai Mozambique Logistica
- Wilmar Investment Holdings
- Bhoruka Overseas - Indonesia
- Singapore Mercantile Exchange
- Ind-Barath Power Infra Limited - India
- Tata Chemicals Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- OPG Power Generation Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- TeaM Sual Corporation - Philippines
- Vedanta Resources Plc - India
- LBH Netherlands Bv - Netherlands
- Vizag Seaport Private Limited - India
- Indian Energy Exchange, India
- Heidelberg Cement - Germany
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Meenaskhi Energy Private Limited - India
- Sree Jayajothi Cements Limited - India
- New Zealand Coal & Carbon
- Straits Asia Resources Limited - Singapore
- Africa Commodities Group - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Iligan Light & Power Inc, Philippines
- Australian Commodity Traders Exchange
- Alfred C Toepfer International GmbH - Germany
- Chettinad Cement Corporation Ltd - India
- Gujarat Sidhee Cement - India
- Maharashtra Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Mercator Lines Limited - India
- PNOC Exploration Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Romanian Commodities Exchange
- Indonesian Coal Mining Association
- Rashtriya Ispat Nigam Limited - India
- European Bulk Services B.V. - Netherlands
- Posco Energy - South Korea
- Electricity Generating Authority of Thailand
- IEA Clean Coal Centre - UK
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- Madhucon Powers Ltd - India
- Simpson Spence & Young - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Attock Cement Pakistan Limited
- CNBM International Corporation - China
- Aboitiz Power Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bhushan Steel Limited - India
- SMG Consultants - Indonesia
- Formosa Plastics Group - Taiwan
- Karbindo Abesyapradhi - Indoneisa
- Chamber of Mines of South Africa
- Goldman Sachs - Singapore
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- Port Waratah Coal Services - Australia
- Kohat Cement Company Ltd. - Pakistan
- Global Coal Blending Company Limited - Australia
- Petrochimia International Co. Ltd.- Taiwan
- VISA Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Cement Manufacturers Association - India
- Siam City Cement PLC, Thailand
- ASAPP Information Group - India
- Barasentosa Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- London Commodity Brokers - England
- Kideco Jaya Agung - Indonesia
- Thiess Contractors Indonesia
- Larsen & Toubro Limited - India
- Tamil Nadu electricity Board
- Malabar Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- Kepco SPC Power Corporation, Philippines
- Coalindo Energy - Indonesia
- GMR Energy Limited - India
- Bulk Trading Sa - Switzerland
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- Central Electricity Authority - India
- Bukit Makmur.PT - Indonesia
- Wood Mackenzie - Singapore
- Global Business Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Central Java Power - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- IHS Mccloskey Coal Group - USA
- Krishnapatnam Port Company Ltd. - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ambuja Cements Ltd - India
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- AsiaOL BioFuels Corp., Philippines
- Bukit Baiduri Energy - Indonesia
- Electricity Authority, New Zealand
- Holcim Trading Pte Ltd - Singapore
- Minerals Council of Australia
- Essar Steel Hazira Ltd - India
- Aditya Birla Group - India
- Rio Tinto Coal - Australia
- MS Steel International - UAE
- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Coal Council - USA
- Lanco Infratech Ltd - India
- Kumho Petrochemical, South Korea
- Salva Resources Pvt Ltd - India
- Parry Sugars Refinery, India
- Makarim & Taira - Indonesia
- Renaissance Capital - South Africa
- Semirara Mining and Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Ministry of Transport, Egypt
- Meralco Power Generation, Philippines
- Sakthi Sugars Limited - India
- Antam Resourcindo - Indonesia
- Bhatia International Limited - India
- Altura Mining Limited, Indonesia
- Anglo American - United Kingdom
- Coal and Oil Company - UAE
- Karaikal Port Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Intertek Mineral Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Sojitz Corporation - Japan
- Bayan Resources Tbk. - Indonesia
- Georgia Ports Authority, United States
- Banpu Public Company Limited - Thailand
- Xindia Steels Limited - India
- PTC India Limited - India
- Parliament of New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Latin American Coal - Colombia
- Orica Australia Pty. Ltd.
- Directorate General of MIneral and Coal - Indonesia
- Indogreen Group - Indonesia
- Bharathi Cement Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- ICICI Bank Limited - India
- Dalmia Cement Bharat India
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- White Energy Company Limited
- Kobexindo Tractors - Indoneisa
- Australian Coal Association
- Gujarat Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Energy Development Corp, Philippines
- Ministry of Mines - Canada
- Semirara Mining Corp, Philippines
- GVK Power & Infra Limited - India
- Merrill Lynch Commodities Europe
- Eastern Energy - Thailand
- Directorate Of Revenue Intelligence - India
- Medco Energi Mining Internasional
- Globalindo Alam Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Petron Corporation, Philippines
- Mintek Dendrill Indonesia
- International Coal Ventures Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- Sarangani Energy Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Marubeni Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Planning Commission, India
- The State Trading Corporation of India Ltd
- Price Waterhouse Coopers - Russia
- Interocean Group of Companies - India
- Siam City Cement - Thailand
- Indian Oil Corporation Limited
- Toyota Tsusho Corporation, Japan
- Mjunction Services Limited - India
- Commonwealth Bank - Australia
- Billiton Holdings Pty Ltd - Australia
- PowerSource Philippines DevCo
- Bangladesh Power Developement Board
- Uttam Galva Steels Limited - India
- Grasim Industreis Ltd - India
- Ministry of Finance - Indonesia
- Agrawal Coal Company - India
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