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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 February 17
U.S. COAL OUTPUT IS ESTIMATED TO HAVE DECLINED BY 158 MMST IN 2016 TO 739 MMST, SAYS EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 17 million short tons ...
Wednesday, 08 February 17
MARKET INSIGHT - PANOS MAKRINOS
The challenges the oil market has witnessed since the end of 2014 has resulted in a crisis for the global offshore oil and gas exploration industry ...
Tuesday, 07 February 17
WE ARE STILL RIDING ON A WAVE OF MARKET IMPROVEMENT, WITH THE GLOBAL TRADE OF MOST COMMODITIES STILL SHOWING SIGNS OF IMPROVING GROWTH - GEORGE LAZARIDIS
The end of 2016 came with a rejuvenated sentiment amongst most traders and investors, in part through the sigh of relief that 2016 was finally comi ...
Monday, 06 February 17
AFTER MONTHS OF GAINS, THE INDONESIAN GOVERNMENT DECLARED MONTHLY COAL BENCHMARK PRICE IS STEADILY DROPPING
COALspot.com: Over the past two months, the HBA of Indonesian thermal coal has dropped around 18.06 percent. It sank to $ 83.32 per ton for Februar ...
Monday, 06 February 17
THE FREIGHT MARKET CONTINUED ITS DOWNFALL IN ALL SEGMENTS
COALspot.com: Due to Lunar year holidays and celebration, the Freight market was declined in all segments week ending 27 January. The fall was cont ...
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- VISA Power Limited - India
- Xindia Steels Limited - India
- Singapore Mercantile Exchange
- Price Waterhouse Coopers - Russia
- Sinarmas Energy and Mining - Indonesia
- Australian Commodity Traders Exchange
- White Energy Company Limited
- Eastern Coal Council - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Madhucon Powers Ltd - India
- Makarim & Taira - Indonesia
- Central Electricity Authority - India
- Karaikal Port Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Vedanta Resources Plc - India
- Romanian Commodities Exchange
- Ambuja Cements Ltd - India
- Simpson Spence & Young - Indonesia
- Orica Australia Pty. Ltd.
- TNB Fuel Sdn Bhd - Malaysia
- Mjunction Services Limited - India
- Global Business Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Manunggal Multi Energi - Indonesia
- Oldendorff Carriers - Singapore
- Ministry of Transport, Egypt
- Coal and Oil Company - UAE
- Samtan Co., Ltd - South Korea
- Energy Link Ltd, New Zealand
- Metalloyd Limited - United Kingdom
- European Bulk Services B.V. - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Vizag Seaport Private Limited - India
- Rio Tinto Coal - Australia
- Therma Luzon, Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Aditya Birla Group - India
- Bayan Resources Tbk. - Indonesia
- Coastal Gujarat Power Limited - India
- PTC India Limited - India
- Wilmar Investment Holdings
- Altura Mining Limited, Indonesia
- Ind-Barath Power Infra Limited - India
- Thiess Contractors Indonesia
- Essar Steel Hazira Ltd - India
- Indika Energy - Indonesia
- CNBM International Corporation - China
- Standard Chartered Bank - UAE
- Karbindo Abesyapradhi - Indoneisa
- The State Trading Corporation of India Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Kepco SPC Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Cement Manufacturers Association - India
- Medco Energi Mining Internasional
- Anglo American - United Kingdom
- Kobexindo Tractors - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Videocon Industries ltd - India
- Mintek Dendrill Indonesia
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- Indogreen Group - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Energy Development Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Wood Mackenzie - Singapore
- Bhatia International Limited - India
- TeaM Sual Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Carbofer General Trading SA - India
- Bharathi Cement Corporation - India
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Malabar Cements Ltd - India
- Coalindo Energy - Indonesia
- Indian Oil Corporation Limited
- Timah Investasi Mineral - Indoneisa
- South Luzon Thermal Energy Corporation
- Gujarat Mineral Development Corp Ltd - India
- Chettinad Cement Corporation Ltd - India
- Semirara Mining Corp, Philippines
- Marubeni Corporation - India
- Barasentosa Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Pipit Mutiara Jaya. PT, Indonesia
- The Treasury - Australian Government
- PowerSource Philippines DevCo
- Eastern Energy - Thailand
- Electricity Authority, New Zealand
- Grasim Industreis Ltd - India
- Globalindo Alam Lestari - Indonesia
- Commonwealth Bank - Australia
- Kapuas Tunggal Persada - Indonesia
- India Bulls Power Limited - India
- Larsen & Toubro Limited - India
- New Zealand Coal & Carbon
- Bukit Makmur.PT - Indonesia
- Baramulti Group, Indonesia
- Indian Energy Exchange, India
- Minerals Council of Australia
- Jaiprakash Power Ventures ltd
- Interocean Group of Companies - India
- ASAPP Information Group - India
- Siam City Cement PLC, Thailand
- SMC Global Power, Philippines
- Meralco Power Generation, Philippines
- Planning Commission, India
- Chamber of Mines of South Africa
- OPG Power Generation Pvt Ltd - India
- Tamil Nadu electricity Board
- Bangladesh Power Developement Board
- Intertek Mineral Services - Indonesia
- Toyota Tsusho Corporation, Japan
- Parliament of New Zealand
- Semirara Mining and Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Sarangani Energy Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Cigading International Bulk Terminal - Indonesia
- Dalmia Cement Bharat India
- Bhoruka Overseas - Indonesia
- Goldman Sachs - Singapore
- Attock Cement Pakistan Limited
- Alfred C Toepfer International GmbH - Germany
- Star Paper Mills Limited - India
- IEA Clean Coal Centre - UK
- Salva Resources Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- Central Java Power - Indonesia
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meenaskhi Energy Private Limited - India
- Bulk Trading Sa - Switzerland
- Port Waratah Coal Services - Australia
- Binh Thuan Hamico - Vietnam
- Economic Council, Georgia
- Antam Resourcindo - Indonesia
- SMG Consultants - Indonesia
- Indo Tambangraya Megah - Indonesia
- CIMB Investment Bank - Malaysia
- The University of Queensland
- Posco Energy - South Korea
- Trasteel International SA, Italy
- Africa Commodities Group - South Africa
- Kalimantan Lumbung Energi - Indonesia
- Sical Logistics Limited - India
- Kaltim Prima Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Sindya Power Generating Company Private Ltd
- San Jose City I Power Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Petron Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Pendopo Energi Batubara - Indonesia
- Siam City Cement - Thailand
- GVK Power & Infra Limited - India
- Riau Bara Harum - Indonesia
- Global Green Power PLC Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Uttam Galva Steels Limited - India
- Formosa Plastics Group - Taiwan
- Kartika Selabumi Mining - Indonesia
- MS Steel International - UAE
- Ceylon Electricity Board - Sri Lanka
- Krishnapatnam Port Company Ltd. - India
- Power Finance Corporation Ltd., India
- London Commodity Brokers - England
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Finance - Indonesia
- Merrill Lynch Commodities Europe
- Iligan Light & Power Inc, Philippines
- Sojitz Corporation - Japan
- Agrawal Coal Company - India
- Gujarat Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Deloitte Consulting - India
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- Kumho Petrochemical, South Korea
- Global Coal Blending Company Limited - Australia
- ICICI Bank Limited - India
- Sree Jayajothi Cements Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Lanco Infratech Ltd - India
- Orica Mining Services - Indonesia
- Latin American Coal - Colombia
- Renaissance Capital - South Africa
- SN Aboitiz Power Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Heidelberg Cement - Germany
- Maharashtra Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Banpu Public Company Limited - Thailand
- Borneo Indobara - Indonesia
- Parry Sugars Refinery, India
- McConnell Dowell - Australia
- Bhushan Steel Limited - India
- Bukit Baiduri Energy - Indonesia
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Independent Power Producers Association of India
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- Billiton Holdings Pty Ltd - Australia
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