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