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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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Thursday, 28 January 16
WHAT ARE THE PROSPECTS FOR COAL IN LIGHT OF THE PARIS CLIMATE AGREEMENT? - GERMAN COAL IMPORTERS ASSOCIATION
This depends – says the VDKi – to a very great extent on who you want to believe more, the United Nations or the International Energy A ...
Thursday, 28 January 16
RICHARDS BAY COAL SWAPS FOR Q1,Q2 AND Q3 DELIVERIES FIRM THIS PAST WEEK
COALspot.com: Q1’ 2016 API4 FOB Richards Bay Coal swap rose month over month and week over week.
The Q1’ 2016 FOB Richards Bay Coa ...
Wednesday, 27 January 16
API 5 FOB NEWCASTLE COAL SWAPS CLOSE MIXED
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery rose another $1.17 per ton (3.13%) this past week compared to the sam ...
Wednesday, 27 January 16
CHINA'S STALLING ECONOMY HAS HAD A GREAT EFFECT ON VARIOUS COMMODITIES; DECREASED DEMAND DRIVING COMMODITY PRICES LOWER AND LOWER - LINOS ALEXANDROS KOGEVINAS
Having gone through the first few weeks of 2016, it’s starting to look like another challenging year is ahead of us. Hopes for a recovery in ...
Wednesday, 27 January 16
WORLD HARD COAL PRODUCTION AND CONSUMPTION DECLINE IN 2015 FOR THE FIRST TIME IN OVER A DECADE - VDKI
COALspot.com: Seaborne hard coal trade and the changes in this area were decisively affected by China and India - VDKi.
China bears the g ...
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- AsiaOL BioFuels Corp., Philippines
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- Posco Energy - South Korea
- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Standard Chartered Bank - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- San Jose City I Power Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Bulk Trading Sa - Switzerland
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Central Electricity Authority - India
- Siam City Cement PLC, Thailand
- White Energy Company Limited
- Videocon Industries ltd - India
- Bangladesh Power Developement Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Independent Power Producers Association of India
- Riau Bara Harum - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- PTC India Limited - India
- Vedanta Resources Plc - India
- MS Steel International - UAE
- Commonwealth Bank - Australia
- Cigading International Bulk Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Sidhee Cement - India
- Electricity Authority, New Zealand
- Madhucon Powers Ltd - India
- VISA Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Trasteel International SA, Italy
- Directorate General of MIneral and Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Borneo Indobara - Indonesia
- Eastern Coal Council - USA
- McConnell Dowell - Australia
- Latin American Coal - Colombia
- Mercator Lines Limited - India
- Sree Jayajothi Cements Limited - India
- Xindia Steels Limited - India
- South Luzon Thermal Energy Corporation
- Ambuja Cements Ltd - India
- Meralco Power Generation, Philippines
- Australian Commodity Traders Exchange
- CNBM International Corporation - China
- Energy Development Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Leighton Contractors Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- Marubeni Corporation - India
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- LBH Netherlands Bv - Netherlands
- Planning Commission, India
- International Coal Ventures Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Georgia Ports Authority, United States
- Billiton Holdings Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- Carbofer General Trading SA - India
- Indonesian Coal Mining Association
- Aditya Birla Group - India
- Goldman Sachs - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Economic Council, Georgia
- Indika Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Renaissance Capital - South Africa
- Miang Besar Coal Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PNOC Exploration Corporation - Philippines
- London Commodity Brokers - England
- Sindya Power Generating Company Private Ltd
- Straits Asia Resources Limited - Singapore
- India Bulls Power Limited - India
- Grasim Industreis Ltd - India
- Attock Cement Pakistan Limited
- Larsen & Toubro Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- The State Trading Corporation of India Ltd
- Binh Thuan Hamico - Vietnam
- Global Coal Blending Company Limited - Australia
- CIMB Investment Bank - Malaysia
- Malabar Cements Ltd - India
- Australian Coal Association
- Merrill Lynch Commodities Europe
- ICICI Bank Limited - India
- Pendopo Energi Batubara - Indonesia
- New Zealand Coal & Carbon
- Electricity Generating Authority of Thailand
- Coal and Oil Company - UAE
- Maheswari Brothers Coal Limited - India
- Gujarat Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Baramulti Group, Indonesia
- SMG Consultants - Indonesia
- Rashtriya Ispat Nigam Limited - India
- GVK Power & Infra Limited - India
- Rio Tinto Coal - Australia
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining and Power Corporation, Philippines
- Ministry of Mines - Canada
- Uttam Galva Steels Limited - India
- SMC Global Power, Philippines
- Vizag Seaport Private Limited - India
- Altura Mining Limited, Indonesia
- Indian Oil Corporation Limited
- Meenaskhi Energy Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Java Power - Indonesia
- Manunggal Multi Energi - Indonesia
- Romanian Commodities Exchange
- Kepco SPC Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Coastal Gujarat Power Limited - India
- Makarim & Taira - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Jaiprakash Power Ventures ltd
- Anglo American - United Kingdom
- Jindal Steel & Power Ltd - India
- The Treasury - Australian Government
- TNB Fuel Sdn Bhd - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Antam Resourcindo - Indonesia
- Minerals Council of Australia
- Sinarmas Energy and Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Iligan Light & Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Eastern Energy - Thailand
- Bhushan Steel Limited - India
- Aboitiz Power Corporation - Philippines
- Medco Energi Mining Internasional
- Sojitz Corporation - Japan
- Wilmar Investment Holdings
- Parry Sugars Refinery, India
- Sarangani Energy Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Cement Manufacturers Association - India
- Ministry of Finance - Indonesia
- Power Finance Corporation Ltd., India
- Kumho Petrochemical, South Korea
- Bukit Makmur.PT - Indonesia
- IEA Clean Coal Centre - UK
- Thiess Contractors Indonesia
- Interocean Group of Companies - India
- Salva Resources Pvt Ltd - India
- The University of Queensland
- Chamber of Mines of South Africa
- Mjunction Services Limited - India
- Bharathi Cement Corporation - India
- Kobexindo Tractors - Indoneisa
- Tamil Nadu electricity Board
- Energy Link Ltd, New Zealand
- PowerSource Philippines DevCo
- Therma Luzon, Inc, Philippines
- Tata Chemicals Ltd - India
- Dalmia Cement Bharat India
- Ministry of Transport, Egypt
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
- Heidelberg Cement - Germany
- Formosa Plastics Group - Taiwan
- Orica Mining Services - Indonesia
- Intertek Mineral Services - Indonesia
- Sical Logistics Limited - India
- Agrawal Coal Company - India
- Krishnapatnam Port Company Ltd. - India
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- TeaM Sual Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Star Paper Mills Limited - India
- Oldendorff Carriers - Singapore
- Samtan Co., Ltd - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sakthi Sugars Limited - India
- Indo Tambangraya Megah - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Singapore Mercantile Exchange
- Thai Mozambique Logistica
- Petron Corporation, Philippines
- Deloitte Consulting - India
- Wood Mackenzie - Singapore
- Semirara Mining Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Toyota Tsusho Corporation, Japan
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bhoruka Overseas - Indonesia
- Bukit Baiduri Energy - Indonesia
- Port Waratah Coal Services - Australia
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