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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, 02 September 16
EIA FORECASTS U.S. COAL EXPORTS TO DECLINE BY 19 MMST IN 2016 TO 55 MMST
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 16.3 million sho ...
Thursday, 01 September 16
SUPRAMAX GETTING LEVELS OF MID/HIGHER 7K DELIVERY SINGAPORE FOR TRIPS TO CHINA AND AROUND 9K FOR DIRECTION INDIA - FEARNLEYS
Supramax
This week started slower with London on bank holiday Monday. The south east Asian market seems to have been taking a breather with chart ...
Thursday, 01 September 16
AUSTRALIA'S NEWCASTLE PORT SHIPPED 2.33 PERCENT MORE COAL IN JULY
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port has shipped $AU 1.10 bill ...
Wednesday, 31 August 16
THE DRY BULK MARKET MANAGED TO FIND FURTHER SUPPORT DURING THE LAST DAYS OF THE SUMMER SEASON - INTERMODAL
The Dry Bulk market managed to find further support during the last days of the summer season, with the BDI climbing above 700 last Friday, reachin ...
Tuesday, 30 August 16
THE SUDDEN SURGE IN IRON ORE TRADE HAS CREPT UP ON THE MARKET THIS PAST WEEK - GEORGE LAZARIDIS
The sudden surge in Iron ore trade has crept up on the market this past week bringing about a change in the prospects for Capes. Continued increase ...
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- Formosa Plastics Group - Taiwan
- OPG Power Generation Pvt Ltd - India
- Central Electricity Authority - India
- Wood Mackenzie - Singapore
- Holcim Trading Pte Ltd - Singapore
- PTC India Limited - India
- Oldendorff Carriers - Singapore
- Malabar Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Chamber of Mines of South Africa
- Kalimantan Lumbung Energi - Indonesia
- Coal and Oil Company - UAE
- London Commodity Brokers - England
- Baramulti Group, Indonesia
- Thai Mozambique Logistica
- Jaiprakash Power Ventures ltd
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Mines - Canada
- Ambuja Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indika Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Standard Chartered Bank - UAE
- Indian Energy Exchange, India
- Medco Energi Mining Internasional
- Rashtriya Ispat Nigam Limited - India
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Mercuria Energy - Indonesia
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- VISA Power Limited - India
- Savvy Resources Ltd - HongKong
- Kartika Selabumi Mining - Indonesia
- Parry Sugars Refinery, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining Corp, Philippines
- Attock Cement Pakistan Limited
- Ministry of Finance - Indonesia
- Star Paper Mills Limited - India
- Merrill Lynch Commodities Europe
- Bhoruka Overseas - Indonesia
- Eastern Energy - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Larsen & Toubro Limited - India
- Madhucon Powers Ltd - India
- Thiess Contractors Indonesia
- GMR Energy Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kumho Petrochemical, South Korea
- Meenaskhi Energy Private Limited - India
- Sindya Power Generating Company Private Ltd
- Tamil Nadu electricity Board
- Salva Resources Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Sree Jayajothi Cements Limited - India
- Cement Manufacturers Association - India
- Trasteel International SA, Italy
- Electricity Generating Authority of Thailand
- Independent Power Producers Association of India
- Power Finance Corporation Ltd., India
- Bukit Baiduri Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMC Global Power, Philippines
- Antam Resourcindo - Indonesia
- Pendopo Energi Batubara - Indonesia
- Manunggal Multi Energi - Indonesia
- Makarim & Taira - Indonesia
- Latin American Coal - Colombia
- Siam City Cement PLC, Thailand
- Iligan Light & Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- White Energy Company Limited
- Aditya Birla Group - India
- Australian Coal Association
- SMG Consultants - Indonesia
- Ind-Barath Power Infra Limited - India
- GVK Power & Infra Limited - India
- Siam City Cement - Thailand
- The University of Queensland
- CNBM International Corporation - China
- Petron Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Meralco Power Generation, Philippines
- Ministry of Transport, Egypt
- South Luzon Thermal Energy Corporation
- Billiton Holdings Pty Ltd - Australia
- Bhushan Steel Limited - India
- Sojitz Corporation - Japan
- Globalindo Alam Lestari - Indonesia
- Carbofer General Trading SA - India
- The State Trading Corporation of India Ltd
- Samtan Co., Ltd - South Korea
- Kobexindo Tractors - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Energy Development Corp, Philippines
- Planning Commission, India
- Mercator Lines Limited - India
- Rio Tinto Coal - Australia
- Jindal Steel & Power Ltd - India
- Anglo American - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Mjunction Services Limited - India
- Intertek Mineral Services - Indonesia
- Toyota Tsusho Corporation, Japan
- Indian Oil Corporation Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Mintek Dendrill Indonesia
- Indogreen Group - Indonesia
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- GAC Shipping (India) Pvt Ltd
- McConnell Dowell - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Price Waterhouse Coopers - Russia
- Sinarmas Energy and Mining - Indonesia
- Parliament of New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Sical Logistics Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Uttam Galva Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Karaikal Port Pvt Ltd - India
- Bangladesh Power Developement Board
- Port Waratah Coal Services - Australia
- Videocon Industries ltd - India
- Singapore Mercantile Exchange
- Economic Council, Georgia
- Miang Besar Coal Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Agrawal Coal Company - India
- IHS Mccloskey Coal Group - USA
- CIMB Investment Bank - Malaysia
- Heidelberg Cement - Germany
- Xindia Steels Limited - India
- MS Steel International - UAE
- Indo Tambangraya Megah - Indonesia
- Borneo Indobara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vedanta Resources Plc - India
- Romanian Commodities Exchange
- TeaM Sual Corporation - Philippines
- Renaissance Capital - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Straits Asia Resources Limited - Singapore
- Gujarat Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Barasentosa Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Edison Trading Spa - Italy
- Bukit Makmur.PT - Indonesia
- IEA Clean Coal Centre - UK
- Directorate Of Revenue Intelligence - India
- Asmin Koalindo Tuhup - Indonesia
- Bharathi Cement Corporation - India
- Altura Mining Limited, Indonesia
- Lanco Infratech Ltd - India
- Africa Commodities Group - South Africa
- Australian Commodity Traders Exchange
- ICICI Bank Limited - India
- Global Green Power PLC Corporation, Philippines
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- The Treasury - Australian Government
- Kaltim Prima Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Essar Steel Hazira Ltd - India
- Tata Chemicals Ltd - India
- Kideco Jaya Agung - Indonesia
- Chettinad Cement Corporation Ltd - India
- Simpson Spence & Young - Indonesia
- Marubeni Corporation - India
- Vizag Seaport Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Orica Mining Services - Indonesia
- Georgia Ports Authority, United States
- Timah Investasi Mineral - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Wilmar Investment Holdings
- Banpu Public Company Limited - Thailand
- Interocean Group of Companies - India
- Dalmia Cement Bharat India
- PNOC Exploration Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Bhatia International Limited - India
- New Zealand Coal & Carbon
- PowerSource Philippines DevCo
- Maheswari Brothers Coal Limited - India
- Indonesian Coal Mining Association
- LBH Netherlands Bv - Netherlands
- Orica Australia Pty. Ltd.
- Therma Luzon, Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Posco Energy - South Korea
- Minerals Council of Australia
- Grasim Industreis Ltd - India
- ASAPP Information Group - India
- Leighton Contractors Pty Ltd - Australia
- India Bulls Power Limited - India
- Sarangani Energy Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
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