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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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Tuesday, 21 February 17
CHINESE EXPORTS SHOWED A YEAR-ON-YEAR RISE FOR THE FIRST TIME IN TEN MONTHS; S. KOREA'S EXPORTS UP FOR PAST THREE MONTHS IN A ROW - GEORGE LAZARIDIS
We have started to some sparks of life in the commodities markets these past weeks, with prices having shown a strong push during the past couple o ...
Tuesday, 21 February 17
CHINA SUSPENDS COAL IMPORTS FROM NORTH KOREA FROM 19 FEB
COALspot.com: China is suspended coal imports from North Korea until December 2017. China says it will suspend all imports of coal from North Korea ...
Monday, 20 February 17
OCEAN FREIGHT RATES SLIGHTLY UP WEEK OVER WEEK
COALspot.com: The Freight market was firmed up this past week. The Panamax segment was declined for the week ending 17 February 2017.
The Balt ...
Friday, 17 February 17
U.S. COAL PRODUCTION SLIPS SLIGHTLY WEEK OVER WEEK, SAYS EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 16.5 million sh ...
Thursday, 16 February 17
CAPE MARKET HAVE EXPERIENCED A STRONG DOWNTURN - FEARNLEYS
Supramax
Market has shifted sides from Atlantic to Pacific, where Atlantic is now lagging behind with little action and sliding indices, notably ...
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- Goldman Sachs - Singapore
- Kobexindo Tractors - Indoneisa
- Indonesian Coal Mining Association
- Cement Manufacturers Association - India
- Antam Resourcindo - Indonesia
- Iligan Light & Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Sinarmas Energy and Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- New Zealand Coal & Carbon
- Oldendorff Carriers - Singapore
- Semirara Mining Corp, Philippines
- Manunggal Multi Energi - Indonesia
- CNBM International Corporation - China
- Samtan Co., Ltd - South Korea
- Ambuja Cements Ltd - India
- Dalmia Cement Bharat India
- Banpu Public Company Limited - Thailand
- Edison Trading Spa - Italy
- Toyota Tsusho Corporation, Japan
- GN Power Mariveles Coal Plant, Philippines
- VISA Power Limited - India
- Bhoruka Overseas - Indonesia
- Global Business Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Asmin Koalindo Tuhup - Indonesia
- Kartika Selabumi Mining - Indonesia
- Larsen & Toubro Limited - India
- Videocon Industries ltd - India
- Leighton Contractors Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- TeaM Sual Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Vizag Seaport Private Limited - India
- Agrawal Coal Company - India
- McConnell Dowell - Australia
- Semirara Mining and Power Corporation, Philippines
- Vedanta Resources Plc - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Xindia Steels Limited - India
- PowerSource Philippines DevCo
- The Treasury - Australian Government
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Medco Energi Mining Internasional
- Riau Bara Harum - Indonesia
- Bharathi Cement Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Standard Chartered Bank - UAE
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- Ministry of Finance - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- Sakthi Sugars Limited - India
- Baramulti Group, Indonesia
- IEA Clean Coal Centre - UK
- Attock Cement Pakistan Limited
- Singapore Mercantile Exchange
- Georgia Ports Authority, United States
- Intertek Mineral Services - Indonesia
- Metalloyd Limited - United Kingdom
- Madhucon Powers Ltd - India
- Ministry of Mines - Canada
- Straits Asia Resources Limited - Singapore
- Parliament of New Zealand
- AsiaOL BioFuels Corp., Philippines
- Australian Coal Association
- Carbofer General Trading SA - India
- Chettinad Cement Corporation Ltd - India
- Sarangani Energy Corporation, Philippines
- Indika Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Kumho Petrochemical, South Korea
- SN Aboitiz Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Parry Sugars Refinery, India
- Renaissance Capital - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMG Consultants - Indonesia
- Sree Jayajothi Cements Limited - India
- Global Green Power PLC Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Holcim Trading Pte Ltd - Singapore
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- Meralco Power Generation, Philippines
- Coastal Gujarat Power Limited - India
- Wilmar Investment Holdings
- Global Coal Blending Company Limited - Australia
- Ministry of Transport, Egypt
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Central Java Power - Indonesia
- Barasentosa Lestari - Indonesia
- Romanian Commodities Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indogreen Group - Indonesia
- Makarim & Taira - Indonesia
- Thai Mozambique Logistica
- Bukit Makmur.PT - Indonesia
- Trasteel International SA, Italy
- Electricity Authority, New Zealand
- Jaiprakash Power Ventures ltd
- Simpson Spence & Young - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Sojitz Corporation - Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CIMB Investment Bank - Malaysia
- GMR Energy Limited - India
- Economic Council, Georgia
- Cigading International Bulk Terminal - Indonesia
- Energy Development Corp, Philippines
- Marubeni Corporation - India
- ICICI Bank Limited - India
- Indo Tambangraya Megah - Indonesia
- Ind-Barath Power Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- Grasim Industreis Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- International Coal Ventures Pvt Ltd - India
- Bhatia International Limited - India
- Tata Chemicals Ltd - India
- Kepco SPC Power Corporation, Philippines
- Eastern Energy - Thailand
- Essar Steel Hazira Ltd - India
- European Bulk Services B.V. - Netherlands
- Malabar Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Tamil Nadu electricity Board
- Aboitiz Power Corporation - Philippines
- Planning Commission, India
- Siam City Cement - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Mjunction Services Limited - India
- Orica Australia Pty. Ltd.
- Merrill Lynch Commodities Europe
- Mercuria Energy - Indonesia
- Electricity Generating Authority of Thailand
- Globalindo Alam Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Sidhee Cement - India
- Sical Logistics Limited - India
- Wood Mackenzie - Singapore
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- Coal and Oil Company - UAE
- Thiess Contractors Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Meenaskhi Energy Private Limited - India
- India Bulls Power Limited - India
- Power Finance Corporation Ltd., India
- Savvy Resources Ltd - HongKong
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement PLC, Thailand
- Kaltim Prima Coal - Indonesia
- Deloitte Consulting - India
- Bulk Trading Sa - Switzerland
- Interocean Group of Companies - India
- Orica Mining Services - Indonesia
- Price Waterhouse Coopers - Russia
- Bukit Asam (Persero) Tbk - Indonesia
- The University of Queensland
- Commonwealth Bank - Australia
- MS Steel International - UAE
- PetroVietnam Power Coal Import and Supply Company
- Petron Corporation, Philippines
- Heidelberg Cement - Germany
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Anglo American - United Kingdom
- Energy Link Ltd, New Zealand
- San Jose City I Power Corp, Philippines
- Star Paper Mills Limited - India
- Chamber of Mines of South Africa
- Billiton Holdings Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- White Energy Company Limited
- TNB Fuel Sdn Bhd - Malaysia
- Mercator Lines Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Bhushan Steel Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Coalindo Energy - Indonesia
- Africa Commodities Group - South Africa
- Directorate General of MIneral and Coal - Indonesia
- PTC India Limited - India
- Therma Luzon, Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Maheswari Brothers Coal Limited - India
- Bayan Resources Tbk. - Indonesia
- Indian Energy Exchange, India
- Lanco Infratech Ltd - India
- Uttam Galva Steels Limited - India
- Bangladesh Power Developement Board
- Eastern Coal Council - USA
- Minerals Council of Australia
- Altura Mining Limited, Indonesia
- London Commodity Brokers - England
- OPG Power Generation Pvt Ltd - India
- Port Waratah Coal Services - Australia
- SMC Global Power, Philippines
- IHS Mccloskey Coal Group - USA
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- Rio Tinto Coal - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Central Electricity Authority - India
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