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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, 03 March 17
U.S. WEEKLY COAL PRODUCTION ESTIMATED AT 15.7 MMST; DECLINE 6.7% W/W - EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 15.7 million short ton ...
Thursday, 02 March 17
ULTRAMAX: INDONESIA TO INDIA COAL ROUNDS IS BEING FIXED AT AROUND MID 11K BSS SINGAPORE DELIVERY - FEARNLEYS
Supramax
Holiday mode within Atlantic i.e. very few movements but rates remained still positive, mostly in the USG region where tight tonnage sup ...
Wednesday, 01 March 17
2017 IS LOOKING LIKE IT WILL BE A GOOD YEAR FOR A NUMBER OF COMMODITIES - LINOS KOGEVINAS
2017 is looking like it will be a good year for a number of commodities. Following the price recovery witnessed in 2016 across a number of commodit ...
Tuesday, 28 February 17
PORT OF NEWCASTLE SHIPPED 17.39% LESS COAL IN JANUARY; TRADE VALUE UP 11.87% M/M
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port has shipped $AU 1,625.6 M ...
Monday, 27 February 17
THE FREIGHT MARKET WAS FIRMED UP THIS PAST WEEK; BCI ROSE 57.64% W/W
COALspot.com: The Freight market was firmed up this past week.
The Baltic Exchange, tracking rates for ships carrying dry bulk commod ...
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- Tamil Nadu electricity Board
- Gujarat Sidhee Cement - India
- Binh Thuan Hamico - Vietnam
- Bangladesh Power Developement Board
- Salva Resources Pvt Ltd - India
- Bharathi Cement Corporation - India
- Coastal Gujarat Power Limited - India
- The University of Queensland
- Eastern Energy - Thailand
- Interocean Group of Companies - India
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- Cement Manufacturers Association - India
- Oldendorff Carriers - Singapore
- Madhucon Powers Ltd - India
- Banpu Public Company Limited - Thailand
- Karaikal Port Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Indogreen Group - Indonesia
- Marubeni Corporation - India
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- Miang Besar Coal Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Medco Energi Mining Internasional
- CNBM International Corporation - China
- VISA Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Wilmar Investment Holdings
- Central Java Power - Indonesia
- International Coal Ventures Pvt Ltd - India
- Deloitte Consulting - India
- Kapuas Tunggal Persada - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Toyota Tsusho Corporation, Japan
- Standard Chartered Bank - UAE
- Chettinad Cement Corporation Ltd - India
- Kobexindo Tractors - Indoneisa
- Edison Trading Spa - Italy
- Mintek Dendrill Indonesia
- White Energy Company Limited
- CIMB Investment Bank - Malaysia
- Semirara Mining Corp, Philippines
- Power Finance Corporation Ltd., India
- Commonwealth Bank - Australia
- IEA Clean Coal Centre - UK
- SMC Global Power, Philippines
- Energy Link Ltd, New Zealand
- Manunggal Multi Energi - Indonesia
- Indonesian Coal Mining Association
- Electricity Generating Authority of Thailand
- Rio Tinto Coal - Australia
- Directorate Of Revenue Intelligence - India
- Economic Council, Georgia
- Uttam Galva Steels Limited - India
- Bhatia International Limited - India
- Grasim Industreis Ltd - India
- Goldman Sachs - Singapore
- Thiess Contractors Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Romanian Commodities Exchange
- Latin American Coal - Colombia
- Georgia Ports Authority, United States
- Mercuria Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Energy Development Corp, Philippines
- London Commodity Brokers - England
- Chamber of Mines of South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Riau Bara Harum - Indonesia
- Tata Chemicals Ltd - India
- The State Trading Corporation of India Ltd
- Meenaskhi Energy Private Limited - India
- Sical Logistics Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coalindo Energy - Indonesia
- Ambuja Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Vedanta Resources Plc - India
- Sree Jayajothi Cements Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- SMG Consultants - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- Sarangani Energy Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Wood Mackenzie - Singapore
- Timah Investasi Mineral - Indoneisa
- Merrill Lynch Commodities Europe
- Independent Power Producers Association of India
- Savvy Resources Ltd - HongKong
- Australian Commodity Traders Exchange
- Malabar Cements Ltd - India
- San Jose City I Power Corp, Philippines
- ICICI Bank Limited - India
- Bayan Resources Tbk. - Indonesia
- Sakthi Sugars Limited - India
- Petron Corporation, Philippines
- Attock Cement Pakistan Limited
- Jaiprakash Power Ventures ltd
- Vizag Seaport Private Limited - India
- ASAPP Information Group - India
- TeaM Sual Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Posco Energy - South Korea
- Renaissance Capital - South Africa
- Agrawal Coal Company - India
- SN Aboitiz Power Inc, Philippines
- McConnell Dowell - Australia
- Directorate General of MIneral and Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Coal and Oil Company - UAE
- Singapore Mercantile Exchange
- Kepco SPC Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Thai Mozambique Logistica
- Ministry of Transport, Egypt
- Bukit Baiduri Energy - Indonesia
- Larsen & Toubro Limited - India
- Formosa Plastics Group - Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Central Electricity Authority - India
- Jindal Steel & Power Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Billiton Holdings Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- GVK Power & Infra Limited - India
- Mjunction Services Limited - India
- Anglo American - United Kingdom
- Australian Coal Association
- OPG Power Generation Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Global Business Power Corporation, Philippines
- Indian Energy Exchange, India
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- Eastern Coal Council - USA
- Bahari Cakrawala Sebuku - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Sojitz Corporation - Japan
- Bulk Trading Sa - Switzerland
- Indika Energy - Indonesia
- Carbofer General Trading SA - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aditya Birla Group - India
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- Siam City Cement PLC, Thailand
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- Altura Mining Limited, Indonesia
- Therma Luzon, Inc, Philippines
- Ministry of Mines - Canada
- Mercator Lines Limited - India
- Meralco Power Generation, Philippines
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- Minerals Council of Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Port Waratah Coal Services - Australia
- Maheswari Brothers Coal Limited - India
- Trasteel International SA, Italy
- Ceylon Electricity Board - Sri Lanka
- Pendopo Energi Batubara - Indonesia
- Dalmia Cement Bharat India
- European Bulk Services B.V. - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Samtan Co., Ltd - South Korea
- Parliament of New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Planning Commission, India
- Straits Asia Resources Limited - Singapore
- AsiaOL BioFuels Corp., Philippines
- Bukit Makmur.PT - Indonesia
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- Krishnapatnam Port Company Ltd. - India
- Vijayanagar Sugar Pvt Ltd - India
- Indian Oil Corporation Limited
- Kaltim Prima Coal - Indonesia
- Xindia Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Indo Tambangraya Megah - Indonesia
- New Zealand Coal & Carbon
- Baramulti Group, Indonesia
- Makarim & Taira - Indonesia
- PowerSource Philippines DevCo
- Ministry of Finance - Indonesia
- MS Steel International - UAE
- Borneo Indobara - Indonesia
- Intertek Mineral Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- Metalloyd Limited - United Kingdom
- Bhushan Steel Limited - India
- Electricity Authority, New Zealand
- Orica Australia Pty. Ltd.
- Asmin Koalindo Tuhup - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GMR Energy Limited - India
- Lanco Infratech Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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