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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, 02 January 17
PORT OF NEWCASTLE SHIPPED 13.62 MMT OF COAL IN NOVEMBER; UP 4.18% M/M
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port has shipped $AU 1,201 Mil ...
Friday, 30 December 16
US WEEKLY COAL PRODUCTION TOTALS 15.2 MMST, DOWN 3.1% - EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 15.2 million sho ...
Thursday, 29 December 16
CHINA AIMS TO CAP COAL-FIRED POWER CAPACITY AT 1,100 GIGAWATTS BY THE END OF 2020 - REUTERS
China aims to cap total primary energy consumption at around 4.4 billion tonnes of coal equivalent in 2017, the director of the National Energy Adm ...
Wednesday, 28 December 16
FINANCIAL MARKETS AND COMMODITY MARKETS HAVE ALREADY SHOWED CONSIDERABLE IMPROVEMENT AND RENEWED OPTIMISM - GEORGE LAZARIDIS
As 2016 nears to a close many will be breathing a heavy sigh of relief, having made it through one of the toughest years in this century and lookin ...
Wednesday, 28 December 16
BUMA SIGNED APPROXIMATELY US$ 493 MILLION WORTH OF MINING SERVICES CONTRACTS WITH PT ADARO INDONESIA AND PT ANGSANA JAYA ENERGY
COALspot.com: PT Delta Dunia Makmur Tbk. Has announced that its primary operating subsidiary, PT Bukit Makmur Mandiri Utama ("BUMA") has ...
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- Toyota Tsusho Corporation, Japan
- Sindya Power Generating Company Private Ltd
- Holcim Trading Pte Ltd - Singapore
- Indian Oil Corporation Limited
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Oldendorff Carriers - Singapore
- Electricity Authority, New Zealand
- Manunggal Multi Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Chettinad Cement Corporation Ltd - India
- OPG Power Generation Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Australian Coal Association
- Madhucon Powers Ltd - India
- Chamber of Mines of South Africa
- San Jose City I Power Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Dalmia Cement Bharat India
- Uttam Galva Steels Limited - India
- Bukit Makmur.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Directorate Of Revenue Intelligence - India
- Gujarat Mineral Development Corp Ltd - India
- ICICI Bank Limited - India
- IEA Clean Coal Centre - UK
- Georgia Ports Authority, United States
- PNOC Exploration Corporation - Philippines
- Mercator Lines Limited - India
- LBH Netherlands Bv - Netherlands
- Parry Sugars Refinery, India
- Karbindo Abesyapradhi - Indoneisa
- Cement Manufacturers Association - India
- Orica Australia Pty. Ltd.
- Australian Commodity Traders Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coastal Gujarat Power Limited - India
- Grasim Industreis Ltd - India
- Aboitiz Power Corporation - Philippines
- Star Paper Mills Limited - India
- Economic Council, Georgia
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- Bharathi Cement Corporation - India
- Bhoruka Overseas - Indonesia
- Renaissance Capital - South Africa
- Kepco SPC Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Leighton Contractors Pty Ltd - Australia
- Eastern Energy - Thailand
- Meenaskhi Energy Private Limited - India
- GAC Shipping (India) Pvt Ltd
- International Coal Ventures Pvt Ltd - India
- Posco Energy - South Korea
- PTC India Limited - India
- Coal and Oil Company - UAE
- Global Business Power Corporation, Philippines
- SMC Global Power, Philippines
- Videocon Industries ltd - India
- Xindia Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Meralco Power Generation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The State Trading Corporation of India Ltd
- Standard Chartered Bank - UAE
- Heidelberg Cement - Germany
- Vedanta Resources Plc - India
- Semirara Mining and Power Corporation, Philippines
- Lanco Infratech Ltd - India
- MS Steel International - UAE
- Borneo Indobara - Indonesia
- Kumho Petrochemical, South Korea
- GMR Energy Limited - India
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Kideco Jaya Agung - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Deloitte Consulting - India
- Minerals Council of Australia
- Ministry of Transport, Egypt
- Central Electricity Authority - India
- Banpu Public Company Limited - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sakthi Sugars Limited - India
- Essar Steel Hazira Ltd - India
- Sical Logistics Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Pendopo Energi Batubara - Indonesia
- Attock Cement Pakistan Limited
- VISA Power Limited - India
- PowerSource Philippines DevCo
- Metalloyd Limited - United Kingdom
- Sarangani Energy Corporation, Philippines
- Thai Mozambique Logistica
- Timah Investasi Mineral - Indoneisa
- Coalindo Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Tata Chemicals Ltd - India
- India Bulls Power Limited - India
- Eastern Coal Council - USA
- The Treasury - Australian Government
- Indogreen Group - Indonesia
- Anglo American - United Kingdom
- Vizag Seaport Private Limited - India
- Orica Mining Services - Indonesia
- Makarim & Taira - Indonesia
- Commonwealth Bank - Australia
- White Energy Company Limited
- CNBM International Corporation - China
- Mintek Dendrill Indonesia
- Global Coal Blending Company Limited - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ambuja Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Goldman Sachs - Singapore
- Globalindo Alam Lestari - Indonesia
- Africa Commodities Group - South Africa
- Intertek Mineral Services - Indonesia
- Indika Energy - Indonesia
- Medco Energi Mining Internasional
- Marubeni Corporation - India
- Bulk Trading Sa - Switzerland
- Kobexindo Tractors - Indoneisa
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- Binh Thuan Hamico - Vietnam
- Maheswari Brothers Coal Limited - India
- Tamil Nadu electricity Board
- Karaikal Port Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Edison Trading Spa - Italy
- ASAPP Information Group - India
- Rio Tinto Coal - Australia
- Central Java Power - Indonesia
- Wilmar Investment Holdings
- Kohat Cement Company Ltd. - Pakistan
- Indian Energy Exchange, India
- Interocean Group of Companies - India
- Kalimantan Lumbung Energi - Indonesia
- Agrawal Coal Company - India
- Iligan Light & Power Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- New Zealand Coal & Carbon
- Bukit Baiduri Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- GVK Power & Infra Limited - India
- Energy Development Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Wood Mackenzie - Singapore
- Electricity Generating Authority of Thailand
- Ministry of Mines - Canada
- Bhushan Steel Limited - India
- Indonesian Coal Mining Association
- Baramulti Group, Indonesia
- Bhatia International Limited - India
- Siam City Cement - Thailand
- Sojitz Corporation - Japan
- Aditya Birla Group - India
- Ministry of Finance - Indonesia
- London Commodity Brokers - England
- AsiaOL BioFuels Corp., Philippines
- CIMB Investment Bank - Malaysia
- Jaiprakash Power Ventures ltd
- Energy Link Ltd, New Zealand
- Samtan Co., Ltd - South Korea
- Kaltim Prima Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Larsen & Toubro Limited - India
- Gujarat Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Planning Commission, India
- Indo Tambangraya Megah - Indonesia
- Rashtriya Ispat Nigam Limited - India
- SMG Consultants - Indonesia
- Independent Power Producers Association of India
- Jindal Steel & Power Ltd - India
- Riau Bara Harum - Indonesia
- Latin American Coal - Colombia
- Mercuria Energy - Indonesia
- Romanian Commodities Exchange
- TNB Fuel Sdn Bhd - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Port Waratah Coal Services - Australia
- Global Green Power PLC Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Thiess Contractors Indonesia
- Malabar Cements Ltd - India
- Therma Luzon, Inc, Philippines
- Power Finance Corporation Ltd., India
- Merrill Lynch Commodities Europe
- Miang Besar Coal Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Siam City Cement PLC, Thailand
- South Luzon Thermal Energy Corporation
- Altura Mining Limited, Indonesia
- Semirara Mining Corp, Philippines
- Barasentosa Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Carbofer General Trading SA - India
- Singapore Mercantile Exchange
- Bangladesh Power Developement Board
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