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