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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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Friday, 10 March 17
ESTIMATED U.S. COAL PRODUCTION ALMOST FLAT WEEK ENDED MARCH 4, SAYS EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 15.7 million short ton ...
Friday, 10 March 17
THE 5TH PHILIPPINES POWER AND ELECTRICITY WEEK RETURNS WITH A UNIQUE FOCUS IN 2017
5th Annual Philippines Power & Electricity
18-21 July 2017
Solaire Resort & Casino,Manila, Philippines
http://www.philippinespowe ...
Thursday, 09 March 17
INDONESIAN COAL BENCHMARK PRICE DROPPED FOR A THIRD STRAIGHT MONTH IN MARCH, GOVERNMENT DATA SHOWED
COALspot.com: Indonesian government declared coal benchmark price dropped for a fourth straight month in March, government data showed. The ...
Wednesday, 08 March 17
THE FREIGHT MARKET TODAY PROVIDES MUCH MORE CONFIDENCE COMPARED TO LAST YEAR - TIMOS PAPADIMITRIOU
So what's all the fuss about? During the past five months SnP activity has being surging exponentially in the dry bulk sector. Buyers are looki ...
Monday, 06 March 17
THE FREIGHT MARKET WAS CONTINUING TO FIRM UP THIS PAST WEEK
COALspot.com: The Freight market was continuing to firm up this past week.
The Baltic Exchange, tracking rates for ships carrying dry bulk com ...
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- Sakthi Sugars Limited - India
- Petron Corporation, Philippines
- Australian Commodity Traders Exchange
- ASAPP Information Group - India
- Rashtriya Ispat Nigam Limited - India
- Simpson Spence & Young - Indonesia
- Kepco SPC Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Orica Mining Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Antam Resourcindo - Indonesia
- Toyota Tsusho Corporation, Japan
- Romanian Commodities Exchange
- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
- Attock Cement Pakistan Limited
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- New Zealand Coal & Carbon
- Oldendorff Carriers - Singapore
- Metalloyd Limited - United Kingdom
- Semirara Mining Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- PowerSource Philippines DevCo
- Mintek Dendrill Indonesia
- Grasim Industreis Ltd - India
- SMG Consultants - Indonesia
- International Coal Ventures Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Thiess Contractors Indonesia
- Global Coal Blending Company Limited - Australia
- Asmin Koalindo Tuhup - Indonesia
- Electricity Generating Authority of Thailand
- Bayan Resources Tbk. - Indonesia
- Interocean Group of Companies - India
- Kohat Cement Company Ltd. - Pakistan
- Indian Energy Exchange, India
- Cigading International Bulk Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining and Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Formosa Plastics Group - Taiwan
- Dalmia Cement Bharat India
- Bukit Baiduri Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Siam City Cement - Thailand
- Energy Development Corp, Philippines
- Gujarat Sidhee Cement - India
- TeaM Sual Corporation - Philippines
- Global Business Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Lanco Infratech Ltd - India
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- Economic Council, Georgia
- SMC Global Power, Philippines
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- Carbofer General Trading SA - India
- Sarangani Energy Corporation, Philippines
- Australian Coal Association
- Bhoruka Overseas - Indonesia
- Manunggal Multi Energi - Indonesia
- Riau Bara Harum - Indonesia
- Agrawal Coal Company - India
- Sinarmas Energy and Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Minerals Council of Australia
- Aditya Birla Group - India
- Madhucon Powers Ltd - India
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
- IEA Clean Coal Centre - UK
- ICICI Bank Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Sical Logistics Limited - India
- Pendopo Energi Batubara - Indonesia
- Aboitiz Power Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- Mercuria Energy - Indonesia
- GMR Energy Limited - India
- Central Electricity Authority - India
- Siam City Cement PLC, Thailand
- Commonwealth Bank - Australia
- Indo Tambangraya Megah - Indonesia
- Mercator Lines Limited - India
- Global Green Power PLC Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Tamil Nadu electricity Board
- Planning Commission, India
- Kartika Selabumi Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Vijayanagar Sugar Pvt Ltd - India
- Malabar Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- VISA Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Globalindo Alam Lestari - Indonesia
- Indogreen Group - Indonesia
- Altura Mining Limited, Indonesia
- Power Finance Corporation Ltd., India
- Latin American Coal - Colombia
- Independent Power Producers Association of India
- Indika Energy - Indonesia
- Coalindo Energy - Indonesia
- Deloitte Consulting - India
- Salva Resources Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- White Energy Company Limited
- Alfred C Toepfer International GmbH - Germany
- Kaltim Prima Coal - Indonesia
- Xindia Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Directorate General of MIneral and Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Meenaskhi Energy Private Limited - India
- Vedanta Resources Plc - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Marubeni Corporation - India
- Edison Trading Spa - Italy
- Merrill Lynch Commodities Europe
- European Bulk Services B.V. - Netherlands
- Tata Chemicals Ltd - India
- Ambuja Cements Ltd - India
- Ministry of Finance - Indonesia
- Makarim & Taira - Indonesia
- South Luzon Thermal Energy Corporation
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- PetroVietnam Power Coal Import and Supply Company
- McConnell Dowell - Australia
- The Treasury - Australian Government
- CIMB Investment Bank - Malaysia
- Bhatia International Limited - India
- Bhushan Steel Limited - India
- Sindya Power Generating Company Private Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sojitz Corporation - Japan
- Ministry of Transport, Egypt
- Eastern Coal Council - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Uttam Galva Steels Limited - India
- Electricity Authority, New Zealand
- Thai Mozambique Logistica
- Africa Commodities Group - South Africa
- PTC India Limited - India
- Energy Link Ltd, New Zealand
- The University of Queensland
- Baramulti Group, Indonesia
- Coastal Gujarat Power Limited - India
- Cement Manufacturers Association - India
- Star Paper Mills Limited - India
- Eastern Energy - Thailand
- Karaikal Port Pvt Ltd - India
- India Bulls Power Limited - India
- Ministry of Mines - Canada
- Indian Oil Corporation Limited
- MS Steel International - UAE
- London Commodity Brokers - England
- Posco Energy - South Korea
- Standard Chartered Bank - UAE
- Barasentosa Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- Georgia Ports Authority, United States
- Miang Besar Coal Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Bahari Cakrawala Sebuku - Indonesia
- Parliament of New Zealand
- AsiaOL BioFuels Corp., Philippines
- The State Trading Corporation of India Ltd
- Bulk Trading Sa - Switzerland
- GAC Shipping (India) Pvt Ltd
- Directorate Of Revenue Intelligence - India
- Pipit Mutiara Jaya. PT, Indonesia
- Banpu Public Company Limited - Thailand
- Mjunction Services Limited - India
- Videocon Industries ltd - India
- SN Aboitiz Power Inc, Philippines
- Vizag Seaport Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- Renaissance Capital - South Africa
- Bangladesh Power Developement Board
- Kideco Jaya Agung - Indonesia
- Port Waratah Coal Services - Australia
- Goldman Sachs - Singapore
- Heidelberg Cement - Germany
- Trasteel International SA, Italy
- Ceylon Electricity Board - Sri Lanka
- Medco Energi Mining Internasional
- Kumho Petrochemical, South Korea
- Kobexindo Tractors - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Bharathi Cement Corporation - India
- Essar Steel Hazira Ltd - India
- PNOC Exploration Corporation - Philippines
- CNBM International Corporation - China
- Bukit Makmur.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Singapore Mercantile Exchange
- IHS Mccloskey Coal Group - USA
- Rio Tinto Coal - Australia
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