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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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Sunday, 22 November 15
INDONESIA TO INDIA FREIGHT RATES TO REMAIN DULL NEXT WEEK
COALspot.com: The BDI was down to historical lows closing at 498 points which is down by almost 95.77 per cent compared to 11,800 points in 2008.
...
Sunday, 22 November 15
INDIA COULD PROVIDE SILVER LINING FOR SHIPPING INDUSTRY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The rise of India as a global player in the shipping market could be just a couple of years away, as the country has the potential to become a seco ...
Friday, 20 November 15
U.S. COAL PRODUCTION FOR THE WEEK ENDING NOVEMBER '14; NO CHANGE FROM LAST WEEK
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 16.5 million shor ...
Friday, 20 November 15
NO IMPROVEMENT SEEN IN NEAR-TERM COAL DEMAND; SWAPS CLOSE LOWER
COALspot.com: Indonesian coal swap for delivery Q1 2016 declined month on month and flat on week over week. Price of coal seen no improvements this ...
Friday, 20 November 15
CHANGING CRUDE SUPPLY TRENDS MAY HELP EUROPEAN REFINERS - FITCH RATINGS
COALspot.com: Changes in global oil supply trends, including high Russian production, the expected renewal of Iranian heavy crude exports and the p ...
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- Petron Corporation, Philippines
- Ministry of Mines - Canada
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Central Electricity Authority - India
- Samtan Co., Ltd - South Korea
- Indo Tambangraya Megah - Indonesia
- Globalindo Alam Lestari - Indonesia
- Lanco Infratech Ltd - India
- Coastal Gujarat Power Limited - India
- Parry Sugars Refinery, India
- Baramulti Group, Indonesia
- Commonwealth Bank - Australia
- Bhoruka Overseas - Indonesia
- Bukit Baiduri Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- SMG Consultants - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Latin American Coal - Colombia
- Chettinad Cement Corporation Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Savvy Resources Ltd - HongKong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CNBM International Corporation - China
- PNOC Exploration Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Larsen & Toubro Limited - India
- The University of Queensland
- Merrill Lynch Commodities Europe
- Billiton Holdings Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Malabar Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Sindya Power Generating Company Private Ltd
- Australian Commodity Traders Exchange
- Sical Logistics Limited - India
- CIMB Investment Bank - Malaysia
- VISA Power Limited - India
- Bhatia International Limited - India
- Cement Manufacturers Association - India
- Binh Thuan Hamico - Vietnam
- Wilmar Investment Holdings
- European Bulk Services B.V. - Netherlands
- IEA Clean Coal Centre - UK
- The Treasury - Australian Government
- Semirara Mining Corp, Philippines
- Therma Luzon, Inc, Philippines
- Edison Trading Spa - Italy
- Medco Energi Mining Internasional
- Aditya Birla Group - India
- Global Business Power Corporation, Philippines
- New Zealand Coal & Carbon
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Sidhee Cement - India
- Anglo American - United Kingdom
- Posco Energy - South Korea
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- Interocean Group of Companies - India
- Standard Chartered Bank - UAE
- Jindal Steel & Power Ltd - India
- SMC Global Power, Philippines
- Straits Asia Resources Limited - Singapore
- Metalloyd Limited - United Kingdom
- Uttam Galva Steels Limited - India
- McConnell Dowell - Australia
- Cigading International Bulk Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Ind-Barath Power Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Sojitz Corporation - Japan
- TeaM Sual Corporation - Philippines
- Orica Australia Pty. Ltd.
- Formosa Plastics Group - Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Riau Bara Harum - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Coalindo Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Australian Coal Association
- LBH Netherlands Bv - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Meralco Power Generation, Philippines
- Renaissance Capital - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Bulk Trading Sa - Switzerland
- Thiess Contractors Indonesia
- Sakthi Sugars Limited - India
- Madhucon Powers Ltd - India
- Siam City Cement PLC, Thailand
- San Jose City I Power Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Chamber of Mines of South Africa
- Energy Link Ltd, New Zealand
- Timah Investasi Mineral - Indoneisa
- Marubeni Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Indogreen Group - Indonesia
- Economic Council, Georgia
- Vizag Seaport Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Holcim Trading Pte Ltd - Singapore
- IHS Mccloskey Coal Group - USA
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Grasim Industreis Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- White Energy Company Limited
- Directorate Of Revenue Intelligence - India
- Mercuria Energy - Indonesia
- Singapore Mercantile Exchange
- Eastern Coal Council - USA
- Ambuja Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rio Tinto Coal - Australia
- Meenaskhi Energy Private Limited - India
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- Trasteel International SA, Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Orica Mining Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Independent Power Producers Association of India
- MS Steel International - UAE
- Heidelberg Cement - Germany
- Bharathi Cement Corporation - India
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- Kartika Selabumi Mining - Indonesia
- Xindia Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Attock Cement Pakistan Limited
- Barasentosa Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Thai Mozambique Logistica
- GAC Shipping (India) Pvt Ltd
- Goldman Sachs - Singapore
- PTC India Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Deloitte Consulting - India
- Kumho Petrochemical, South Korea
- Siam City Cement - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Finance - Indonesia
- Port Waratah Coal Services - Australia
- Iligan Light & Power Inc, Philippines
- Indika Energy - Indonesia
- Parliament of New Zealand
- Simpson Spence & Young - Indonesia
- Africa Commodities Group - South Africa
- London Commodity Brokers - England
- Gujarat Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Georgia Ports Authority, United States
- Sarangani Energy Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Karbindo Abesyapradhi - Indoneisa
- Bangladesh Power Developement Board
- South Luzon Thermal Energy Corporation
- Global Coal Blending Company Limited - Australia
- Tamil Nadu electricity Board
- Coal and Oil Company - UAE
- Bukit Makmur.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- PetroVietnam Power Coal Import and Supply Company
- Romanian Commodities Exchange
- AsiaOL BioFuels Corp., Philippines
- Indian Energy Exchange, India
- Videocon Industries ltd - India
- Energy Development Corp, Philippines
- Mintek Dendrill Indonesia
- GVK Power & Infra Limited - India
- Dalmia Cement Bharat India
- Bahari Cakrawala Sebuku - Indonesia
- Carbofer General Trading SA - India
- Salva Resources Pvt Ltd - India
- Minerals Council of Australia
- Oldendorff Carriers - Singapore
- Wood Mackenzie - Singapore
- Mercator Lines Limited - India
- Ministry of Transport, Egypt
- Planning Commission, India
- Tata Chemicals Ltd - India
- The State Trading Corporation of India Ltd
- GN Power Mariveles Coal Plant, Philippines
- Bhushan Steel Limited - India
- Rashtriya Ispat Nigam Limited - India
- Directorate General of MIneral and Coal - Indonesia
- GMR Energy Limited - India
- SN Aboitiz Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Indian Oil Corporation Limited
- Mjunction Services Limited - India
- Vedanta Resources Plc - India
- Power Finance Corporation Ltd., India
- Alfred C Toepfer International GmbH - Germany
- Kobexindo Tractors - Indoneisa
- Agrawal Coal Company - India
- ASAPP Information Group - India
- Eastern Energy - Thailand
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Antam Resourcindo - Indonesia
- Sinarmas Energy and Mining - Indonesia
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