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