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