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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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Tuesday, 01 December 15
TANKERS VERSUS BULKERS - JUST PLAYING CATCH UP? - CLARKSONS
It’s now more than a year since the tanker market took off. In mid-2014 tanker earnings picked up and since then have been in the $30-$40,000 ...
Monday, 30 November 15
ASSOCARBONI LOOKS AT COAL FROM A DIFFERENT ANGLE
ASSOCARBONI is in favour of an international mechanism to provide financial support to countries building high efficiency low emission coal plants. ...
Monday, 30 November 15
CS 5000 GAR COAL INDEX FIRM D-O-D; WEAK W-O-W
COALspot.com: The 5000 GAR CS (i) coal index up slightly day over day.
According to the system generated index, the CS 50 (5000 GAR coal) was ...
Monday, 30 November 15
CFR SOUTH CHINA COAL SWAPS REMAINED UNCHANGED FROM LAST WEEK
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery declined US$ 4.50 (9.78%) per ton month over month.
A commodity swap ...
Sunday, 29 November 15
CAPE INDEX SURGES 383 POINTS WEEK OVER WEEK, BOOSTS BALTIC DRY INDEX
COALspot.com: The Baltic Dry Index, a measure of shipping rates, fell to 498 points on 20 November and touched a 30-year low, but on 27 November th ...
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- Manunggal Multi Energi - Indonesia
- Attock Cement Pakistan Limited
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Renaissance Capital - South Africa
- Central Java Power - Indonesia
- Directorate Of Revenue Intelligence - India
- Pendopo Energi Batubara - Indonesia
- Power Finance Corporation Ltd., India
- Bulk Trading Sa - Switzerland
- Xindia Steels Limited - India
- Thai Mozambique Logistica
- Heidelberg Cement - Germany
- Coalindo Energy - Indonesia
- Ministry of Transport, Egypt
- Sarangani Energy Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Chamber of Mines of South Africa
- Goldman Sachs - Singapore
- PTC India Limited - India
- Bangladesh Power Developement Board
- New Zealand Coal & Carbon
- Bhushan Steel Limited - India
- Indian Energy Exchange, India
- MS Steel International - UAE
- Ceylon Electricity Board - Sri Lanka
- India Bulls Power Limited - India
- Sree Jayajothi Cements Limited - India
- Ind-Barath Power Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Riau Bara Harum - Indonesia
- Indonesian Coal Mining Association
- Chettinad Cement Corporation Ltd - India
- ICICI Bank Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Kaltim Prima Coal - Indonesia
- Aditya Birla Group - India
- Gujarat Mineral Development Corp Ltd - India
- ASAPP Information Group - India
- Sical Logistics Limited - India
- Cigading International Bulk Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Global Green Power PLC Corporation, Philippines
- Gujarat Sidhee Cement - India
- Planning Commission, India
- Kartika Selabumi Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Simpson Spence & Young - Indonesia
- Georgia Ports Authority, United States
- Central Electricity Authority - India
- Port Waratah Coal Services - Australia
- Kobexindo Tractors - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Wilmar Investment Holdings
- Tamil Nadu electricity Board
- Marubeni Corporation - India
- Vizag Seaport Private Limited - India
- Baramulti Group, Indonesia
- Carbofer General Trading SA - India
- Mintek Dendrill Indonesia
- Alfred C Toepfer International GmbH - Germany
- McConnell Dowell - Australia
- Latin American Coal - Colombia
- Cement Manufacturers Association - India
- Kalimantan Lumbung Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- PowerSource Philippines DevCo
- Romanian Commodities Exchange
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- Energy Development Corp, Philippines
- Medco Energi Mining Internasional
- Minerals Council of Australia
- Semirara Mining and Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Anglo American - United Kingdom
- Semirara Mining Corp, Philippines
- Mercator Lines Limited - India
- Sakthi Sugars Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sojitz Corporation - Japan
- Indian Oil Corporation Limited
- Uttam Galva Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Gujarat Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Indika Energy - Indonesia
- Makarim & Taira - Indonesia
- PNOC Exploration Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Sindya Power Generating Company Private Ltd
- Eastern Coal Council - USA
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- Essar Steel Hazira Ltd - India
- Posco Energy - South Korea
- Global Coal Blending Company Limited - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- PetroVietnam Power Coal Import and Supply Company
- Bharathi Cement Corporation - India
- Africa Commodities Group - South Africa
- CIMB Investment Bank - Malaysia
- Parry Sugars Refinery, India
- European Bulk Services B.V. - Netherlands
- The Treasury - Australian Government
- Mjunction Services Limited - India
- Metalloyd Limited - United Kingdom
- GVK Power & Infra Limited - India
- Borneo Indobara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Madhucon Powers Ltd - India
- Aboitiz Power Corporation - Philippines
- Independent Power Producers Association of India
- Australian Commodity Traders Exchange
- Parliament of New Zealand
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- Economic Council, Georgia
- Jaiprakash Power Ventures ltd
- Videocon Industries ltd - India
- Coal and Oil Company - UAE
- Kideco Jaya Agung - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Australian Coal Association
- Eastern Energy - Thailand
- VISA Power Limited - India
- San Jose City I Power Corp, Philippines
- Altura Mining Limited, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Edison Trading Spa - Italy
- Kumho Petrochemical, South Korea
- SMG Consultants - Indonesia
- Globalindo Alam Lestari - Indonesia
- Ministry of Finance - Indonesia
- Singapore Mercantile Exchange
- Karbindo Abesyapradhi - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Energy Link Ltd, New Zealand
- Timah Investasi Mineral - Indoneisa
- Rio Tinto Coal - Australia
- Deloitte Consulting - India
- Bhatia International Limited - India
- Iligan Light & Power Inc, Philippines
- London Commodity Brokers - England
- Therma Luzon, Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Samtan Co., Ltd - South Korea
- The State Trading Corporation of India Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Oldendorff Carriers - Singapore
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- Thiess Contractors Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Lanco Infratech Ltd - India
- Intertek Mineral Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Jindal Steel & Power Ltd - India
- Meralco Power Generation, Philippines
- Siam City Cement PLC, Thailand
- Antam Resourcindo - Indonesia
- Banpu Public Company Limited - Thailand
- Mercuria Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Global Business Power Corporation, Philippines
- Star Paper Mills Limited - India
- Commonwealth Bank - Australia
- White Energy Company Limited
- Bayan Resources Tbk. - Indonesia
- Bhoruka Overseas - Indonesia
- Merrill Lynch Commodities Europe
- Interocean Group of Companies - India
- Barasentosa Lestari - Indonesia
- CNBM International Corporation - China
- SMC Global Power, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Malabar Cements Ltd - India
- Agrawal Coal Company - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Mines - Canada
- GAC Shipping (India) Pvt Ltd
- GMR Energy Limited - India
- Siam City Cement - Thailand
- Grasim Industreis Ltd - India
- Indo Tambangraya Megah - Indonesia
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- Ambuja Cements Ltd - India
- Tata Chemicals Ltd - India
- Orica Australia Pty. Ltd.
- Electricity Generating Authority of Thailand
- Larsen & Toubro Limited - India
- Kapuas Tunggal Persada - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Standard Chartered Bank - UAE
- Binh Thuan Hamico - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Orica Mining Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Dalmia Cement Bharat India
- Petrochimia International Co. Ltd.- Taiwan
- Toyota Tsusho Corporation, Japan
- The University of Queensland
- Directorate General of MIneral and Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
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