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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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- Aditya Birla Group - India
- Timah Investasi Mineral - Indoneisa
- Coastal Gujarat Power Limited - India
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Essar Steel Hazira Ltd - India
- Posco Energy - South Korea
- Coalindo Energy - Indonesia
- Bhushan Steel Limited - India
- PowerSource Philippines DevCo
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Billiton Holdings Pty Ltd - Australia
- Heidelberg Cement - Germany
- Bukit Baiduri Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Manunggal Multi Energi - Indonesia
- Tata Chemicals Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Antam Resourcindo - Indonesia
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Orica Australia Pty. Ltd.
- Semirara Mining and Power Corporation, Philippines
- Wilmar Investment Holdings
- Baramulti Group, Indonesia
- Videocon Industries ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Energy Link Ltd, New Zealand
- GAC Shipping (India) Pvt Ltd
- The State Trading Corporation of India Ltd
- Chettinad Cement Corporation Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Mjunction Services Limited - India
- Holcim Trading Pte Ltd - Singapore
- Altura Mining Limited, Indonesia
- Jaiprakash Power Ventures ltd
- PNOC Exploration Corporation - Philippines
- Romanian Commodities Exchange
- White Energy Company Limited
- Independent Power Producers Association of India
- Barasentosa Lestari - Indonesia
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Siam City Cement PLC, Thailand
- Neyveli Lignite Corporation Ltd, - India
- MS Steel International - UAE
- TNB Fuel Sdn Bhd - Malaysia
- SN Aboitiz Power Inc, Philippines
- Oldendorff Carriers - Singapore
- Cigading International Bulk Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Wood Mackenzie - Singapore
- SMC Global Power, Philippines
- Formosa Plastics Group - Taiwan
- Global Coal Blending Company Limited - Australia
- Indo Tambangraya Megah - Indonesia
- Thiess Contractors Indonesia
- CNBM International Corporation - China
- LBH Netherlands Bv - Netherlands
- Ambuja Cements Ltd - India
- Central Java Power - Indonesia
- Uttam Galva Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Malabar Cements Ltd - India
- India Bulls Power Limited - India
- Meralco Power Generation, Philippines
- Borneo Indobara - Indonesia
- Australian Coal Association
- Trasteel International SA, Italy
- Eastern Energy - Thailand
- South Luzon Thermal Energy Corporation
- Eastern Coal Council - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Interocean Group of Companies - India
- VISA Power Limited - India
- Parry Sugars Refinery, India
- Kartika Selabumi Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- GMR Energy Limited - India
- ICICI Bank Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Africa Commodities Group - South Africa
- Gujarat Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vedanta Resources Plc - India
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- Indian Energy Exchange, India
- Ministry of Finance - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kideco Jaya Agung - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Makarim & Taira - Indonesia
- Orica Mining Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Iligan Light & Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Economic Council, Georgia
- Marubeni Corporation - India
- Medco Energi Mining Internasional
- Vizag Seaport Private Limited - India
- Kumho Petrochemical, South Korea
- Electricity Authority, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Grasim Industreis Ltd - India
- Riau Bara Harum - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Gujarat Mineral Development Corp Ltd - India
- Electricity Generating Authority of Thailand
- Chamber of Mines of South Africa
- Mintek Dendrill Indonesia
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Indogreen Group - Indonesia
- Singapore Mercantile Exchange
- Energy Development Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- Aboitiz Power Corporation - Philippines
- Indika Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Madhucon Powers Ltd - India
- IHS Mccloskey Coal Group - USA
- GVK Power & Infra Limited - India
- Indonesian Coal Mining Association
- Goldman Sachs - Singapore
- Ind-Barath Power Infra Limited - India
- Therma Luzon, Inc, Philippines
- Edison Trading Spa - Italy
- Kobexindo Tractors - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cement Manufacturers Association - India
- New Zealand Coal & Carbon
- Australian Commodity Traders Exchange
- Larsen & Toubro Limited - India
- Ministry of Transport, Egypt
- Salva Resources Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Port Waratah Coal Services - Australia
- Sree Jayajothi Cements Limited - India
- Sindya Power Generating Company Private Ltd
- Lanco Infratech Ltd - India
- Dalmia Cement Bharat India
- Sical Logistics Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- Central Electricity Authority - India
- Georgia Ports Authority, United States
- OPG Power Generation Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Bulk Trading Sa - Switzerland
- TeaM Sual Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Simpson Spence & Young - Indonesia
- Rio Tinto Coal - Australia
- Anglo American - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- PTC India Limited - India
- Bangladesh Power Developement Board
- McConnell Dowell - Australia
- Meenaskhi Energy Private Limited - India
- SMG Consultants - Indonesia
- Bharathi Cement Corporation - India
- Renaissance Capital - South Africa
- The University of Queensland
- IEA Clean Coal Centre - UK
- Mercator Lines Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Agrawal Coal Company - India
- Xindia Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Ministry of Mines - Canada
- The Treasury - Australian Government
- Bhatia International Limited - India
- Global Green Power PLC Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Sojitz Corporation - Japan
- Siam City Cement - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Power Finance Corporation Ltd., India
- Commonwealth Bank - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bayan Resources Tbk. - Indonesia
- Tamil Nadu electricity Board
- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Bhoruka Overseas - Indonesia
- Intertek Mineral Services - Indonesia
- Latin American Coal - Colombia
- Indian Oil Corporation Limited
- London Commodity Brokers - England
- Sarangani Energy Corporation, Philippines
- ASAPP Information Group - India
- Price Waterhouse Coopers - Russia
- Semirara Mining Corp, Philippines
- Deloitte Consulting - India
- GN Power Mariveles Coal Plant, Philippines
- Straits Asia Resources Limited - Singapore
- Standard Chartered Bank - UAE
- Global Business Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Banpu Public Company Limited - Thailand
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