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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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Monday, 08 May 17
US WEEKLY COAL OUTPUT ON THE DOWN - EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 13.8 million short tons ...
Thursday, 04 May 17
SUPRAMAX: INDO COAL ROUNDS LEVELS WITH DELIVERY CHINA IS TRADING AROUND LOW $6K, TRIP BACK TO CHINA
Supramax
The short week brought weaker rates across all routes. Supras from USG to Japan were fixed around $19-20 k daily and from ECSA to ECI $1 ...
Wednesday, 03 May 17
MALAYSIA SEEMS AS BIGGEST ADARO COAL IMPORTER IN Q1' 17
COALspot.com: In 1Q17, 30% of Adaro's sales went to Indonesia, the data from unaudited consolidated financial statement shows.
Malaysia ca ...
Wednesday, 03 May 17
MARKET INSIGHT - STELIOS KOLLINTZAS
The overall performance of each sector within the edible oil markets has remained poor for the past weeks. Apart from the veg oil exports fro ...
Tuesday, 02 May 17
THE FREIGHT MARKET CONTINUE TO SLUMP THIS PAST WEEK
COALspot.com: The Freight market continues to slump this past week, as all segments except Handy Size show a negative downward trend.
The Balt ...
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- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Romanian Commodities Exchange
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- Gujarat Mineral Development Corp Ltd - India
- SMC Global Power, Philippines
- Coal and Oil Company - UAE
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- European Bulk Services B.V. - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Posco Energy - South Korea
- Globalindo Alam Lestari - Indonesia
- Thiess Contractors Indonesia
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- Renaissance Capital - South Africa
- Goldman Sachs - Singapore
- Indogreen Group - Indonesia
- Tata Chemicals Ltd - India
- Maheswari Brothers Coal Limited - India
- Electricity Authority, New Zealand
- Indonesian Coal Mining Association
- Samtan Co., Ltd - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Wilmar Investment Holdings
- Baramulti Group, Indonesia
- Meralco Power Generation, Philippines
- Singapore Mercantile Exchange
- Ambuja Cements Ltd - India
- Parliament of New Zealand
- Bulk Trading Sa - Switzerland
- White Energy Company Limited
- Oldendorff Carriers - Singapore
- Intertek Mineral Services - Indonesia
- Energy Development Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- PNOC Exploration Corporation - Philippines
- Carbofer General Trading SA - India
- Makarim & Taira - Indonesia
- Kobexindo Tractors - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- Siam City Cement PLC, Thailand
- Lanco Infratech Ltd - India
- Larsen & Toubro Limited - India
- Sojitz Corporation - Japan
- Heidelberg Cement - Germany
- Global Green Power PLC Corporation, Philippines
- Edison Trading Spa - Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Mining Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Mintek Dendrill Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- Jaiprakash Power Ventures ltd
- OPG Power Generation Pvt Ltd - India
- Cement Manufacturers Association - India
- Pipit Mutiara Jaya. PT, Indonesia
- Mercator Lines Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Australian Commodity Traders Exchange
- Eastern Energy - Thailand
- GVK Power & Infra Limited - India
- IEA Clean Coal Centre - UK
- Marubeni Corporation - India
- Uttam Galva Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Borneo Indobara - Indonesia
- Merrill Lynch Commodities Europe
- MS Steel International - UAE
- Latin American Coal - Colombia
- Formosa Plastics Group - Taiwan
- Rio Tinto Coal - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Australian Coal Association
- Price Waterhouse Coopers - Russia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Videocon Industries ltd - India
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- GMR Energy Limited - India
- Interocean Group of Companies - India
- Chettinad Cement Corporation Ltd - India
- Star Paper Mills Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Central Electricity Authority - India
- Directorate Of Revenue Intelligence - India
- Tamil Nadu electricity Board
- SMG Consultants - Indonesia
- Kepco SPC Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Manunggal Multi Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- LBH Netherlands Bv - Netherlands
- Ceylon Electricity Board - Sri Lanka
- Coalindo Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- Medco Energi Mining Internasional
- Jorong Barutama Greston.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- Wood Mackenzie - Singapore
- Sical Logistics Limited - India
- Siam City Cement - Thailand
- Africa Commodities Group - South Africa
- GAC Shipping (India) Pvt Ltd
- The Treasury - Australian Government
- Agrawal Coal Company - India
- Sree Jayajothi Cements Limited - India
- International Coal Ventures Pvt Ltd - India
- Xindia Steels Limited - India
- South Luzon Thermal Energy Corporation
- New Zealand Coal & Carbon
- Kideco Jaya Agung - Indonesia
- Coastal Gujarat Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- PowerSource Philippines DevCo
- Bharathi Cement Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- Deloitte Consulting - India
- Power Finance Corporation Ltd., India
- Commonwealth Bank - Australia
- Gujarat Sidhee Cement - India
- Independent Power Producers Association of India
- Sakthi Sugars Limited - India
- Leighton Contractors Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- Malabar Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- India Bulls Power Limited - India
- Altura Mining Limited, Indonesia
- Bukit Makmur.PT - Indonesia
- Ministry of Transport, Egypt
- Straits Asia Resources Limited - Singapore
- Electricity Generating Authority of Thailand
- Billiton Holdings Pty Ltd - Australia
- ASAPP Information Group - India
- TeaM Sual Corporation - Philippines
- Indian Energy Exchange, India
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- Aditya Birla Group - India
- Bhatia International Limited - India
- CIMB Investment Bank - Malaysia
- Planning Commission, India
- Central Java Power - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Finance - Indonesia
- Binh Thuan Hamico - Vietnam
- Riau Bara Harum - Indonesia
- VISA Power Limited - India
- Sarangani Energy Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Krishnapatnam Port Company Ltd. - India
- Kaltim Prima Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Antam Resourcindo - Indonesia
- Eastern Coal Council - USA
- Kartika Selabumi Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Essar Steel Hazira Ltd - India
- Cigading International Bulk Terminal - Indonesia
- London Commodity Brokers - England
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indo Tambangraya Megah - Indonesia
- McConnell Dowell - Australia
- PTC India Limited - India
- Standard Chartered Bank - UAE
- The State Trading Corporation of India Ltd
- Economic Council, Georgia
- Parry Sugars Refinery, India
- Bhoruka Overseas - Indonesia
- Global Coal Blending Company Limited - Australia
- The University of Queensland
- Indian Oil Corporation Limited
- Bukit Baiduri Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Grasim Industreis Ltd - India
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Timah Investasi Mineral - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dalmia Cement Bharat India
- Thai Mozambique Logistica
- Asmin Koalindo Tuhup - Indonesia
- Meenaskhi Energy Private Limited - India
- Minerals Council of Australia
- Chamber of Mines of South Africa
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Indika Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Global Business Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- ICICI Bank Limited - India
- Therma Luzon, Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
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