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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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Wednesday, 03 August 16
SHIP TRADING AND ORDERING CLOSE TO A STALEMATE AS SUMMER LULL KICKS IN
With newbuilding activity already at a near standstill since the start of the year, most of 2016’s trading activity in shipping was evident i ...
Tuesday, 02 August 16
INDONESIAN CS COAL INDICES STAY POSITIVE
COALspot.com: Average 5000 GAR coal index of Indonesian origin rose 0.71% week over week to averaging $41.12 per ton this past week, shows CS (i) C ...
Monday, 01 August 16
4200 GAR INDONESIAN COAL PRICE MAY TOUCH $ 32/33 A TON LEVELS SOON
COALspot.com: Indonesian coal prices are likely surge further in 2016 as the recent price movement in Indonesian coal markets suggests that the mar ...
Monday, 01 August 16
BALTIC INDEX ENDED NEGATIVE NOTE THIS PAST WEEK ON WEAKER RATES ACROSS ALL LARGE VESSEL SEGMENTS
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities slide slightly as Cape, Panamax and Supramax segments end ...
Friday, 29 July 16
U.S. COAL OUTPUT SLIPS SLIGHTLY WEEK OVER WEEK
COALspot.com – U.S., the world’s second largest coal producers has produced approximately totalled an estimated 15 million short tons ( ...
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- Thiess Contractors Indonesia
- Standard Chartered Bank - UAE
- Larsen & Toubro Limited - India
- Orica Mining Services - Indonesia
- Minerals Council of Australia
- Interocean Group of Companies - India
- Merrill Lynch Commodities Europe
- Kideco Jaya Agung - Indonesia
- Madhucon Powers Ltd - India
- Metalloyd Limited - United Kingdom
- San Jose City I Power Corp, Philippines
- Jindal Steel & Power Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- The University of Queensland
- Lanco Infratech Ltd - India
- Vizag Seaport Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Independent Power Producers Association of India
- Energy Link Ltd, New Zealand
- Chamber of Mines of South Africa
- Indian Oil Corporation Limited
- Mjunction Services Limited - India
- Commonwealth Bank - Australia
- Indo Tambangraya Megah - Indonesia
- Manunggal Multi Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Gujarat Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- GMR Energy Limited - India
- Indika Energy - Indonesia
- Indonesian Coal Mining Association
- Central Electricity Authority - India
- Thai Mozambique Logistica
- Karaikal Port Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- ASAPP Information Group - India
- Bhoruka Overseas - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Mintek Dendrill Indonesia
- Romanian Commodities Exchange
- Sindya Power Generating Company Private Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Parliament of New Zealand
- Parry Sugars Refinery, India
- McConnell Dowell - Australia
- Australian Commodity Traders Exchange
- Straits Asia Resources Limited - Singapore
- Borneo Indobara - Indonesia
- Jaiprakash Power Ventures ltd
- Samtan Co., Ltd - South Korea
- South Luzon Thermal Energy Corporation
- Bulk Trading Sa - Switzerland
- Essar Steel Hazira Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- Power Finance Corporation Ltd., India
- London Commodity Brokers - England
- Miang Besar Coal Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Bhushan Steel Limited - India
- Alfred C Toepfer International GmbH - Germany
- Bangladesh Power Developement Board
- Edison Trading Spa - Italy
- PetroVietnam Power Coal Import and Supply Company
- Directorate General of MIneral and Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Riau Bara Harum - Indonesia
- Petron Corporation, Philippines
- Mercuria Energy - Indonesia
- Baramulti Group, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kumho Petrochemical, South Korea
- Australian Coal Association
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Iligan Light & Power Inc, Philippines
- Carbofer General Trading SA - India
- Agrawal Coal Company - India
- IHS Mccloskey Coal Group - USA
- Xindia Steels Limited - India
- Wilmar Investment Holdings
- Aditya Birla Group - India
- Cigading International Bulk Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Sojitz Corporation - Japan
- Binh Thuan Hamico - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Aboitiz Power Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Mines - Canada
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- Holcim Trading Pte Ltd - Singapore
- Coalindo Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- Malabar Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Port Waratah Coal Services - Australia
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Java Power - Indonesia
- Simpson Spence & Young - Indonesia
- Bayan Resources Tbk. - Indonesia
- Dalmia Cement Bharat India
- Indian Energy Exchange, India
- Renaissance Capital - South Africa
- Krishnapatnam Port Company Ltd. - India
- Jorong Barutama Greston.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Goldman Sachs - Singapore
- Ministry of Transport, Egypt
- Gujarat Sidhee Cement - India
- Sree Jayajothi Cements Limited - India
- VISA Power Limited - India
- Meenaskhi Energy Private Limited - India
- Ind-Barath Power Infra Limited - India
- Singapore Mercantile Exchange
- Toyota Tsusho Corporation, Japan
- Videocon Industries ltd - India
- Cement Manufacturers Association - India
- The State Trading Corporation of India Ltd
- Billiton Holdings Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- MS Steel International - UAE
- Planning Commission, India
- GVK Power & Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Eastern Coal Council - USA
- Wood Mackenzie - Singapore
- Price Waterhouse Coopers - Russia
- Orica Australia Pty. Ltd.
- Georgia Ports Authority, United States
- Directorate Of Revenue Intelligence - India
- Electricity Authority, New Zealand
- OPG Power Generation Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Deloitte Consulting - India
- Africa Commodities Group - South Africa
- Ambuja Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Kaltim Prima Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Anglo American - United Kingdom
- White Energy Company Limited
- TNB Fuel Sdn Bhd - Malaysia
- Global Business Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Grasim Industreis Ltd - India
- Bukit Makmur.PT - Indonesia
- Posco Energy - South Korea
- Semirara Mining Corp, Philippines
- Savvy Resources Ltd - HongKong
- AsiaOL BioFuels Corp., Philippines
- The Treasury - Australian Government
- Marubeni Corporation - India
- LBH Netherlands Bv - Netherlands
- New Zealand Coal & Carbon
- European Bulk Services B.V. - Netherlands
- Coal and Oil Company - UAE
- Ministry of Finance - Indonesia
- India Bulls Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Economic Council, Georgia
- Kepco SPC Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Indogreen Group - Indonesia
- Makarim & Taira - Indonesia
- SN Aboitiz Power Inc, Philippines
- Mercator Lines Limited - India
- Latin American Coal - Colombia
- Formosa Plastics Group - Taiwan
- Star Paper Mills Limited - India
- Semirara Mining and Power Corporation, Philippines
- Eastern Energy - Thailand
- Sical Logistics Limited - India
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Maheswari Brothers Coal Limited - India
- PTC India Limited - India
- PowerSource Philippines DevCo
- Sakthi Sugars Limited - India
- Altura Mining Limited, Indonesia
- Globalindo Alam Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Siam City Cement - Thailand
- PNOC Exploration Corporation - Philippines
- SMC Global Power, Philippines
- Oldendorff Carriers - Singapore
- Tamil Nadu electricity Board
- Tata Chemicals Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CNBM International Corporation - China
- Pendopo Energi Batubara - Indonesia
- Rio Tinto Coal - Australia
- Sinarmas Energy and Mining - Indonesia
- Medco Energi Mining Internasional
- Bukit Asam (Persero) Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Trasteel International SA, Italy
- Heidelberg Cement - Germany
- Attock Cement Pakistan Limited
- Energy Development Corp, Philippines
- SMG Consultants - Indonesia
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