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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, 07 March 16
INDONESIAN 5700 GAR COAL INDEX DECLINE $0.05 A TON WEEK OVER WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 0.28 percent week over week to averaging $38.66 per ton on this past Friday, ...
Monday, 07 March 16
FREIGHT MARKET MOVING POSITIVE; ALL SEGMENTS EXCEPT CAPE SHOWING A FIRM TREND
COALspot.com: The freight market was steady this past week and showing a firm trend for all segments except for Cape index.
The Baltic Dry Ind ...
Friday, 04 March 16
GLOBAL ECONOMY'S JITTERS ARE SLOWING DOWN SHIPPING EVEN FURTHER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The global economy’s shaky condition to say the least is now hampering growth and as a result demand for shipping is slowing down, something ...
Friday, 04 March 16
U.S. YEAR-TO-DATE COAL PRODUCTION TOTALED 109.3 MMST; 30.2% LOWER THAN THE COMPARABLE YEAR-TO-DATE COAL PRODUCTION IN 2015 - EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 13.1 million shor ...
Thursday, 03 March 16
INDIA'S BUDGET NOT ENOUGH TO BOOST STEELMAKERS' PROFITABILITY - FITCH RATINGS
COALspot.com: Fitch Ratings says that increase in proposed infrastructure spending in India's latest government budget is unlikely to provide a ...
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- AsiaOL BioFuels Corp., Philippines
- Ministry of Transport, Egypt
- Africa Commodities Group - South Africa
- Kobexindo Tractors - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Tata Chemicals Ltd - India
- Ministry of Finance - Indonesia
- MS Steel International - UAE
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- Aditya Birla Group - India
- Electricity Authority, New Zealand
- Directorate Of Revenue Intelligence - India
- Malabar Cements Ltd - India
- Economic Council, Georgia
- India Bulls Power Limited - India
- The State Trading Corporation of India Ltd
- Mintek Dendrill Indonesia
- Coastal Gujarat Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Petron Corporation, Philippines
- Georgia Ports Authority, United States
- The Treasury - Australian Government
- Indogreen Group - Indonesia
- Standard Chartered Bank - UAE
- Coalindo Energy - Indonesia
- Rio Tinto Coal - Australia
- Mercator Lines Limited - India
- Semirara Mining Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Toyota Tsusho Corporation, Japan
- Sinarmas Energy and Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CNBM International Corporation - China
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Sidhee Cement - India
- Billiton Holdings Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- Edison Trading Spa - Italy
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Barasentosa Lestari - Indonesia
- Deloitte Consulting - India
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- Maheswari Brothers Coal Limited - India
- SMC Global Power, Philippines
- London Commodity Brokers - England
- Vizag Seaport Private Limited - India
- Interocean Group of Companies - India
- Timah Investasi Mineral - Indoneisa
- Merrill Lynch Commodities Europe
- PowerSource Philippines DevCo
- Kartika Selabumi Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- Manunggal Multi Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Sical Logistics Limited - India
- Thiess Contractors Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Indika Energy - Indonesia
- Eastern Coal Council - USA
- Independent Power Producers Association of India
- South Luzon Thermal Energy Corporation
- New Zealand Coal & Carbon
- Lanco Infratech Ltd - India
- Power Finance Corporation Ltd., India
- IEA Clean Coal Centre - UK
- Global Green Power PLC Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Sarangani Energy Corporation, Philippines
- Borneo Indobara - Indonesia
- Larsen & Toubro Limited - India
- Savvy Resources Ltd - HongKong
- Bulk Trading Sa - Switzerland
- Kumho Petrochemical, South Korea
- TNB Fuel Sdn Bhd - Malaysia
- European Bulk Services B.V. - Netherlands
- Essar Steel Hazira Ltd - India
- Samtan Co., Ltd - South Korea
- VISA Power Limited - India
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- San Jose City I Power Corp, Philippines
- Renaissance Capital - South Africa
- Bangladesh Power Developement Board
- GVK Power & Infra Limited - India
- Commonwealth Bank - Australia
- Sakthi Sugars Limited - India
- Baramulti Group, Indonesia
- Chettinad Cement Corporation Ltd - India
- Tamil Nadu electricity Board
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- Thai Mozambique Logistica
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
- Meralco Power Generation, Philippines
- Wilmar Investment Holdings
- Intertek Mineral Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Energy Link Ltd, New Zealand
- Cement Manufacturers Association - India
- Bhushan Steel Limited - India
- SMG Consultants - Indonesia
- Formosa Plastics Group - Taiwan
- Attock Cement Pakistan Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Salva Resources Pvt Ltd - India
- McConnell Dowell - Australia
- Coal and Oil Company - UAE
- Ambuja Cements Ltd - India
- Jaiprakash Power Ventures ltd
- The University of Queensland
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement PLC, Thailand
- Krishnapatnam Port Company Ltd. - India
- Therma Luzon, Inc, Philippines
- Chamber of Mines of South Africa
- Semirara Mining and Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Metalloyd Limited - United Kingdom
- Indian Oil Corporation Limited
- GAC Shipping (India) Pvt Ltd
- Xindia Steels Limited - India
- Madhucon Powers Ltd - India
- Aboitiz Power Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- ASAPP Information Group - India
- Carbofer General Trading SA - India
- Central Java Power - Indonesia
- Heidelberg Cement - Germany
- Minerals Council of Australia
- TeaM Sual Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Bhatia International Limited - India
- Romanian Commodities Exchange
- Bukit Baiduri Energy - Indonesia
- Star Paper Mills Limited - India
- Trasteel International SA, Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Development Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Sindya Power Generating Company Private Ltd
- Vedanta Resources Plc - India
- Indo Tambangraya Megah - Indonesia
- Price Waterhouse Coopers - Russia
- Indian Energy Exchange, India
- Global Business Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Australia Pty. Ltd.
- ICICI Bank Limited - India
- Singapore Mercantile Exchange
- Ind-Barath Power Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Dalmia Cement Bharat India
- Ministry of Mines - Canada
- Orica Mining Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Ceylon Electricity Board - Sri Lanka
- Parliament of New Zealand
- Central Electricity Authority - India
- Gujarat Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- GMR Energy Limited - India
- Siam City Cement - Thailand
- Simpson Spence & Young - Indonesia
- Posco Energy - South Korea
- Wood Mackenzie - Singapore
- Australian Coal Association
- Medco Energi Mining Internasional
- Antam Resourcindo - Indonesia
- Kaltim Prima Coal - Indonesia
- PTC India Limited - India
- Grasim Industreis Ltd - India
- Mercuria Energy - Indonesia
- Agrawal Coal Company - India
- Pendopo Energi Batubara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sojitz Corporation - Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sree Jayajothi Cements Limited - India
- Videocon Industries ltd - India
- Makarim & Taira - Indonesia
- Mjunction Services Limited - India
- Global Coal Blending Company Limited - Australia
- IHS Mccloskey Coal Group - USA
- Marubeni Corporation - India
- Planning Commission, India
- Australian Commodity Traders Exchange
- White Energy Company Limited
- Port Waratah Coal Services - Australia
- Neyveli Lignite Corporation Ltd, - India
- Jindal Steel & Power Ltd - India
- Kepco SPC Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
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