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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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Friday, 07 August 15
COAL PRICE DEVELOPMENTS CAN ONLY BE DESCRIBED, SUCCINCTLY AS "OVERSUPPLY MEETS SUBDUED DEMAND" - VDKI
Coal Outlook 2015 – International
Regarding the outlook for global coal trading, two questions arise: firstly, “ whether the years of ...
Friday, 07 August 15
U.S. YEAR-TO-DATE COAL PRODUCTION TOTALED 528.1 MMST; DOWN 8.7% Y/Y - EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 17.7 million shor ...
Thursday, 06 August 15
THE RATES FOR CAPES SHOOT UP LAST WEEK; GIVING THIS RECENT RALLY SOME MUCH NEEDED LEGS - INTERMODAL
COALspot.com: The Dry Bulk market noted another positive closing last week, entirely supported by Capesize performance, which managed to balance th ...
Thursday, 06 August 15
HARD COAL AND COKE IMPORTS TO GERMANY REACH NEW ALL-TIME HIGH OF 56.2M TONES IN 2014
Demand for German and imported hard coal In 2014, in 2014 fell by almost 8%, or 4.8m TCE, to 56.2m TCE.
According to German Coal Importer ...
Thursday, 06 August 15
SEABORNE WORLD TRADE IN STEAM COAL GROWS BY 3% YOY - GERMAN COAL IMPORTER ASSOCIATION
Global trade with hard coal, at 1,272m tones in 2014, increased by 35m tonnes or 3% in comparison with the previous year.
According to associa ...
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- Sree Jayajothi Cements Limited - India
- Georgia Ports Authority, United States
- Africa Commodities Group - South Africa
- Price Waterhouse Coopers - Russia
- Latin American Coal - Colombia
- Manunggal Multi Energi - Indonesia
- Rio Tinto Coal - Australia
- Commonwealth Bank - Australia
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- Electricity Authority, New Zealand
- Iligan Light & Power Inc, Philippines
- Bangladesh Power Developement Board
- Karaikal Port Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercator Lines Limited - India
- MS Steel International - UAE
- Maharashtra Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- GVK Power & Infra Limited - India
- Uttam Galva Steels Limited - India
- New Zealand Coal & Carbon
- Binh Thuan Hamico - Vietnam
- White Energy Company Limited
- Bayan Resources Tbk. - Indonesia
- Wood Mackenzie - Singapore
- Borneo Indobara - Indonesia
- Indian Oil Corporation Limited
- Energy Development Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Tamil Nadu electricity Board
- Grasim Industreis Ltd - India
- CNBM International Corporation - China
- Bhatia International Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Carbofer General Trading SA - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Salva Resources Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- GMR Energy Limited - India
- ICICI Bank Limited - India
- Jorong Barutama Greston.PT - Indonesia
- IEA Clean Coal Centre - UK
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- Indian Energy Exchange, India
- Miang Besar Coal Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Heidelberg Cement - Germany
- PTC India Limited - India
- International Coal Ventures Pvt Ltd - India
- Thiess Contractors Indonesia
- Billiton Holdings Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Kartika Selabumi Mining - Indonesia
- Indonesian Coal Mining Association
- Kaltim Prima Coal - Indonesia
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- Global Business Power Corporation, Philippines
- Planning Commission, India
- Tata Chemicals Ltd - India
- Riau Bara Harum - Indonesia
- Trasteel International SA, Italy
- Ministry of Finance - Indonesia
- Savvy Resources Ltd - HongKong
- Banpu Public Company Limited - Thailand
- Maheswari Brothers Coal Limited - India
- Power Finance Corporation Ltd., India
- AsiaOL BioFuels Corp., Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vedanta Resources Plc - India
- Neyveli Lignite Corporation Ltd, - India
- Agrawal Coal Company - India
- Gujarat Mineral Development Corp Ltd - India
- SMC Global Power, Philippines
- PNOC Exploration Corporation - Philippines
- Gujarat Sidhee Cement - India
- Electricity Generating Authority of Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Videocon Industries ltd - India
- Coal and Oil Company - UAE
- European Bulk Services B.V. - Netherlands
- Oldendorff Carriers - Singapore
- Eastern Coal Council - USA
- Indogreen Group - Indonesia
- Interocean Group of Companies - India
- Australian Coal Association
- Ministry of Mines - Canada
- McConnell Dowell - Australia
- PowerSource Philippines DevCo
- Eastern Energy - Thailand
- Bukit Makmur.PT - Indonesia
- Mjunction Services Limited - India
- GN Power Mariveles Coal Plant, Philippines
- The University of Queensland
- Meralco Power Generation, Philippines
- Directorate Of Revenue Intelligence - India
- Sakthi Sugars Limited - India
- Wilmar Investment Holdings
- Goldman Sachs - Singapore
- Renaissance Capital - South Africa
- Madhucon Powers Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Coalindo Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Star Paper Mills Limited - India
- Parry Sugars Refinery, India
- Australian Commodity Traders Exchange
- Marubeni Corporation - India
- Sical Logistics Limited - India
- Economic Council, Georgia
- Jaiprakash Power Ventures ltd
- Sojitz Corporation - Japan
- Semirara Mining Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- TeaM Sual Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Dalmia Cement Bharat India
- ASAPP Information Group - India
- Jindal Steel & Power Ltd - India
- Vizag Seaport Private Limited - India
- Barasentosa Lestari - Indonesia
- Siam City Cement - Thailand
- CIMB Investment Bank - Malaysia
- Chamber of Mines of South Africa
- PetroVietnam Power Coal Import and Supply Company
- Port Waratah Coal Services - Australia
- Bhoruka Overseas - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Singapore Mercantile Exchange
- Coastal Gujarat Power Limited - India
- Mercuria Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Bhushan Steel Limited - India
- Larsen & Toubro Limited - India
- Ind-Barath Power Infra Limited - India
- Xindia Steels Limited - India
- Orica Australia Pty. Ltd.
- Central Electricity Authority - India
- Aboitiz Power Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Thai Mozambique Logistica
- IHS Mccloskey Coal Group - USA
- Bharathi Cement Corporation - India
- Sindya Power Generating Company Private Ltd
- Kapuas Tunggal Persada - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Kumho Petrochemical, South Korea
- Therma Luzon, Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Formosa Plastics Group - Taiwan
- Ambuja Cements Ltd - India
- The Treasury - Australian Government
- Bulk Trading Sa - Switzerland
- Straits Asia Resources Limited - Singapore
- Mintek Dendrill Indonesia
- London Commodity Brokers - England
- Kepco SPC Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Independent Power Producers Association of India
- SN Aboitiz Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Anglo American - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Posco Energy - South Korea
- Cement Manufacturers Association - India
- San Jose City I Power Corp, Philippines
- SMG Consultants - Indonesia
- Energy Link Ltd, New Zealand
- Lanco Infratech Ltd - India
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
- Parliament of New Zealand
- Petron Corporation, Philippines
- Romanian Commodities Exchange
- Deloitte Consulting - India
- Essar Steel Hazira Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Toyota Tsusho Corporation, Japan
- Kideco Jaya Agung - Indonesia
- Kobexindo Tractors - Indoneisa
- Antam Resourcindo - Indonesia
- Simpson Spence & Young - Indonesia
- Aditya Birla Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Medco Energi Mining Internasional
- Edison Trading Spa - Italy
- Ministry of Transport, Egypt
- Gujarat Electricity Regulatory Commission - India
- Bukit Baiduri Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- GAC Shipping (India) Pvt Ltd
- Krishnapatnam Port Company Ltd. - India
- Samtan Co., Ltd - South Korea
- Rashtriya Ispat Nigam Limited - India
- VISA Power Limited - India
- Baramulti Group, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Indika Energy - Indonesia
- Altura Mining Limited, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- OPG Power Generation Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Makarim & Taira - Indonesia
- Malabar Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
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