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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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- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Singapore Mercantile Exchange
- Meenaskhi Energy Private Limited - India
- Wood Mackenzie - Singapore
- Bhatia International Limited - India
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Minerals Council of Australia
- Krishnapatnam Port Company Ltd. - India
- McConnell Dowell - Australia
- Barasentosa Lestari - Indonesia
- Standard Chartered Bank - UAE
- Georgia Ports Authority, United States
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kohat Cement Company Ltd. - Pakistan
- Bukit Asam (Persero) Tbk - Indonesia
- Economic Council, Georgia
- Ministry of Mines - Canada
- Indian Energy Exchange, India
- Kepco SPC Power Corporation, Philippines
- Thiess Contractors Indonesia
- Eastern Energy - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vedanta Resources Plc - India
- London Commodity Brokers - England
- Interocean Group of Companies - India
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- Bharathi Cement Corporation - India
- Oldendorff Carriers - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- ASAPP Information Group - India
- CNBM International Corporation - China
- GMR Energy Limited - India
- Anglo American - United Kingdom
- Metalloyd Limited - United Kingdom
- Indian Oil Corporation Limited
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- Kideco Jaya Agung - Indonesia
- SMG Consultants - Indonesia
- South Luzon Thermal Energy Corporation
- PetroVietnam Power Coal Import and Supply Company
- Dalmia Cement Bharat India
- Pipit Mutiara Jaya. PT, Indonesia
- SN Aboitiz Power Inc, Philippines
- Ministry of Finance - Indonesia
- Xindia Steels Limited - India
- Binh Thuan Hamico - Vietnam
- New Zealand Coal & Carbon
- Riau Bara Harum - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Medco Energi Mining Internasional
- Tata Chemicals Ltd - India
- Marubeni Corporation - India
- Parry Sugars Refinery, India
- Miang Besar Coal Terminal - Indonesia
- Vizag Seaport Private Limited - India
- LBH Netherlands Bv - Netherlands
- Power Finance Corporation Ltd., India
- Intertek Mineral Services - Indonesia
- Madhucon Powers Ltd - India
- Planning Commission, India
- Rashtriya Ispat Nigam Limited - India
- Sarangani Energy Corporation, Philippines
- Mercator Lines Limited - India
- Aboitiz Power Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Antam Resourcindo - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Lanco Infratech Ltd - India
- Thai Mozambique Logistica
- Malabar Cements Ltd - India
- Baramulti Group, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Meralco Power Generation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- White Energy Company Limited
- Africa Commodities Group - South Africa
- Siam City Cement - Thailand
- Bhushan Steel Limited - India
- Mjunction Services Limited - India
- Neyveli Lignite Corporation Ltd, - India
- SMC Global Power, Philippines
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- Manunggal Multi Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Jindal Steel & Power Ltd - India
- Coastal Gujarat Power Limited - India
- Larsen & Toubro Limited - India
- Bulk Trading Sa - Switzerland
- Jorong Barutama Greston.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- Attock Cement Pakistan Limited
- Posco Energy - South Korea
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- Star Paper Mills Limited - India
- Globalindo Alam Lestari - Indonesia
- GVK Power & Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Essar Steel Hazira Ltd - India
- Romanian Commodities Exchange
- San Jose City I Power Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Therma Luzon, Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Indonesian Coal Mining Association
- IEA Clean Coal Centre - UK
- The University of Queensland
- The Treasury - Australian Government
- Bayan Resources Tbk. - Indonesia
- Global Coal Blending Company Limited - Australia
- Uttam Galva Steels Limited - India
- Sindya Power Generating Company Private Ltd
- PowerSource Philippines DevCo
- Cement Manufacturers Association - India
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- Wilmar Investment Holdings
- Timah Investasi Mineral - Indoneisa
- Siam City Cement PLC, Thailand
- Rio Tinto Coal - Australia
- Sical Logistics Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- Tamil Nadu electricity Board
- Indo Tambangraya Megah - Indonesia
- Edison Trading Spa - Italy
- Samtan Co., Ltd - South Korea
- Global Business Power Corporation, Philippines
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Iligan Light & Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- ICICI Bank Limited - India
- Makarim & Taira - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PTC India Limited - India
- Energy Link Ltd, New Zealand
- Bhoruka Overseas - Indonesia
- Parliament of New Zealand
- Toyota Tsusho Corporation, Japan
- Kumho Petrochemical, South Korea
- Cigading International Bulk Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- Australian Coal Association
- Asmin Koalindo Tuhup - Indonesia
- Energy Development Corp, Philippines
- Ministry of Transport, Egypt
- Sinarmas Energy and Mining - Indonesia
- Altura Mining Limited, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Chamber of Mines of South Africa
- Mintek Dendrill Indonesia
- Kobexindo Tractors - Indoneisa
- Salva Resources Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- CIMB Investment Bank - Malaysia
- Bukit Makmur.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bangladesh Power Developement Board
- Gujarat Sidhee Cement - India
- GN Power Mariveles Coal Plant, Philippines
- Electricity Generating Authority of Thailand
- Renaissance Capital - South Africa
- European Bulk Services B.V. - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Videocon Industries ltd - India
- Global Green Power PLC Corporation, Philippines
- MS Steel International - UAE
- OPG Power Generation Pvt Ltd - India
- Grasim Industreis Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Latin American Coal - Colombia
- Trasteel International SA, Italy
- Central Java Power - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- Banpu Public Company Limited - Thailand
- Formosa Plastics Group - Taiwan
- Ambuja Cements Ltd - India
- Indika Energy - Indonesia
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- Alfred C Toepfer International GmbH - Germany
- Bukit Baiduri Energy - Indonesia
- Orica Mining Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Semirara Mining Corp, Philippines
- Commonwealth Bank - Australia
- Electricity Authority, New Zealand
- Petron Corporation, Philippines
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
- Leighton Contractors Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Karaikal Port Pvt Ltd - India
- Sakthi Sugars Limited - India
- Agrawal Coal Company - India
- AsiaOL BioFuels Corp., Philippines
- Orica Australia Pty. Ltd.
- Pendopo Energi Batubara - Indonesia
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