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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, 03 July 15
U.S DELIVERS WEAK FIRST HALF COAL PRODUCTION; 8.8% LOWER Y-O-Y
COALspot.com – United States the second largest coal producer in the world has produced approximately totaled an estimated 15.5 million short ...
Friday, 03 July 15
SHIPPING CONFIDENCE EQUALS SEVEN-YEAR LOW - MOORE STEPHENS
Overall confidence levels in the shipping industry fell during the three months to May 2015 to a level equal to the lowest rating recorded in the p ...
Thursday, 02 July 15
TECHNOLOGY AND INNOVATION IN MINING 2015 - IXG
Information Exchange Group’s Technology and Innovation in Mining 2015- International Summit on Mining
Press Release: The inaugural editi ...
Thursday, 02 July 15
THE PERFORMANCE OF THE CAPESIZE SEGMENT PUSHED DRY BULK MARKET TO UPWARD LAST WEEK
COALspot.com: The Dry Bulk market continued its upward movement last week, with the BDI closing off on Friday (26 June) in excess of 800 points, wh ...
Wednesday, 01 July 15
Q4'15 AND Q1'16 FOB RICHARDS BAY COAL SWAPS ROSE W-O-W AND M-O-M
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q3' 2015 rose month over month and down week over week.
The Q3 swap was up US$ ...
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- Krishnapatnam Port Company Ltd. - India
- PetroVietnam Power Coal Import and Supply Company
- Thiess Contractors Indonesia
- European Bulk Services B.V. - Netherlands
- Rio Tinto Coal - Australia
- Global Business Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Meenaskhi Energy Private Limited - India
- Malabar Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Bhushan Steel Limited - India
- Minerals Council of Australia
- AsiaOL BioFuels Corp., Philippines
- Leighton Contractors Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Orica Mining Services - Indonesia
- GMR Energy Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Samtan Co., Ltd - South Korea
- Semirara Mining Corp, Philippines
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- Metalloyd Limited - United Kingdom
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- PTC India Limited - India
- The Treasury - Australian Government
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Makarim & Taira - Indonesia
- Salva Resources Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Africa Commodities Group - South Africa
- Kaltim Prima Coal - Indonesia
- SMG Consultants - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Riau Bara Harum - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Port Waratah Coal Services - Australia
- Thai Mozambique Logistica
- Timah Investasi Mineral - Indoneisa
- Tamil Nadu electricity Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Bharathi Cement Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- MS Steel International - UAE
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- Antam Resourcindo - Indonesia
- SN Aboitiz Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Goldman Sachs - Singapore
- Ministry of Transport, Egypt
- Tata Chemicals Ltd - India
- Sindya Power Generating Company Private Ltd
- Australian Coal Association
- Gujarat Sidhee Cement - India
- Singapore Mercantile Exchange
- Alfred C Toepfer International GmbH - Germany
- Central Electricity Authority - India
- White Energy Company Limited
- Petron Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Parry Sugars Refinery, India
- Wilmar Investment Holdings
- Global Green Power PLC Corporation, Philippines
- Orica Australia Pty. Ltd.
- Sarangani Energy Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Independent Power Producers Association of India
- Jaiprakash Power Ventures ltd
- Interocean Group of Companies - India
- Chettinad Cement Corporation Ltd - India
- Kobexindo Tractors - Indoneisa
- Xindia Steels Limited - India
- Bulk Trading Sa - Switzerland
- Eastern Coal Council - USA
- Mjunction Services Limited - India
- Ind-Barath Power Infra Limited - India
- San Jose City I Power Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Edison Trading Spa - Italy
- Barasentosa Lestari - Indonesia
- Chamber of Mines of South Africa
- CNBM International Corporation - China
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Electricity Authority, New Zealand
- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Cement Manufacturers Association - India
- Altura Mining Limited, Indonesia
- Bayan Resources Tbk. - Indonesia
- Ambuja Cements Ltd - India
- Vedanta Resources Plc - India
- Trasteel International SA, Italy
- Binh Thuan Hamico - Vietnam
- SMC Global Power, Philippines
- Globalindo Alam Lestari - Indonesia
- McConnell Dowell - Australia
- Global Coal Blending Company Limited - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Commonwealth Bank - Australia
- Siam City Cement PLC, Thailand
- Mercator Lines Limited - India
- Gujarat Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Sical Logistics Limited - India
- Price Waterhouse Coopers - Russia
- Coal and Oil Company - UAE
- ASAPP Information Group - India
- Karbindo Abesyapradhi - Indoneisa
- Maheswari Brothers Coal Limited - India
- Power Finance Corporation Ltd., India
- Bukit Baiduri Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kohat Cement Company Ltd. - Pakistan
- Madhucon Powers Ltd - India
- Standard Chartered Bank - UAE
- Agrawal Coal Company - India
- Grasim Industreis Ltd - India
- Bukit Makmur.PT - Indonesia
- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- London Commodity Brokers - England
- Posco Energy - South Korea
- Baramulti Group, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sojitz Corporation - Japan
- Toyota Tsusho Corporation, Japan
- Formosa Plastics Group - Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- Renaissance Capital - South Africa
- Videocon Industries ltd - India
- Siam City Cement - Thailand
- Sakthi Sugars Limited - India
- Indian Energy Exchange, India
- Oldendorff Carriers - Singapore
- Latin American Coal - Colombia
- Merrill Lynch Commodities Europe
- Central Java Power - Indonesia
- Planning Commission, India
- Ministry of Mines - Canada
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- Bhatia International Limited - India
- Lanco Infratech Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aditya Birla Group - India
- Deloitte Consulting - India
- Billiton Holdings Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Dalmia Cement Bharat India
- Maharashtra Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- Meralco Power Generation, Philippines
- VISA Power Limited - India
- Manunggal Multi Energi - Indonesia
- Parliament of New Zealand
- Karaikal Port Pvt Ltd - India
- Mintek Dendrill Indonesia
- PNOC Exploration Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Romanian Commodities Exchange
- Larsen & Toubro Limited - India
- CIMB Investment Bank - Malaysia
- Bhoruka Overseas - Indonesia
- Pendopo Energi Batubara - Indonesia
- ICICI Bank Limited - India
- Jindal Steel & Power Ltd - India
- Iligan Light & Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
- Indika Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Borneo Indobara - Indonesia
- Banpu Public Company Limited - Thailand
- Indian Oil Corporation Limited
- Georgia Ports Authority, United States
- India Bulls Power Limited - India
- Energy Development Corp, Philippines
- Coalindo Energy - Indonesia
- Marubeni Corporation - India
- GAC Shipping (India) Pvt Ltd
- Directorate Of Revenue Intelligence - India
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- Coastal Gujarat Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rashtriya Ispat Nigam Limited - India
- Heidelberg Cement - Germany
- The State Trading Corporation of India Ltd
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- GVK Power & Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Economic Council, Georgia
- Cigading International Bulk Terminal - Indonesia
- New Zealand Coal & Carbon
- Wood Mackenzie - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- PowerSource Philippines DevCo
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