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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, 22 May 15
FOB INDONESIA COAL Q3'15 SWAP FINISHED THE WEEK UP 38 CENTS TO $43.65 PER MT
COALspot.com: Indonesian coal swap for delivery Q3 2015 gains week over week and lost month on month, past week.
The Q3 swap was declined US$ ...
Friday, 22 May 15
U.S WEEKLY COAL PRODUCTION STAYS FLAT AT 16 MMST
COALspot.com – United States the second largest coal producer in the world has produced approximately totaled an estimated 16.0 million short ...
Thursday, 21 May 15
PORT OF NEWCASTLE ACHIEVED ITS BEST EVER TOTAL COAL EXPORT TURNOVER OF 159 MILLION TONS IN 2014
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $900 million ...
Thursday, 21 May 15
ATLANTIC PANAMAX MARKET STARTED TO IMPROVE SLOWLY - INTERMODAL
COALspot.com: The Dry Bulk market closed off the week on the green last week, purely on the back of improved Capesize performance, while the rest o ...
Wednesday, 20 May 15
LOWER PRICES SEEN IN NEWBUILDING MARKET ON LOW DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Cash-rich ship owners, or at least, owners with substantial access to financing will be among the prime candidates, who will reap the benefits of t ...
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- Tamil Nadu electricity Board
- Latin American Coal - Colombia
- ASAPP Information Group - India
- TeaM Sual Corporation - Philippines
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- Mercator Lines Limited - India
- Chamber of Mines of South Africa
- Kapuas Tunggal Persada - Indonesia
- London Commodity Brokers - England
- Indonesian Coal Mining Association
- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
- Star Paper Mills Limited - India
- SMG Consultants - Indonesia
- The State Trading Corporation of India Ltd
- Ministry of Mines - Canada
- Electricity Authority, New Zealand
- Australian Commodity Traders Exchange
- Deloitte Consulting - India
- GAC Shipping (India) Pvt Ltd
- Bayan Resources Tbk. - Indonesia
- India Bulls Power Limited - India
- Kumho Petrochemical, South Korea
- Independent Power Producers Association of India
- Ministry of Finance - Indonesia
- South Luzon Thermal Energy Corporation
- Madhucon Powers Ltd - India
- Cigading International Bulk Terminal - Indonesia
- SMC Global Power, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Sojitz Corporation - Japan
- Karaikal Port Pvt Ltd - India
- Parry Sugars Refinery, India
- ICICI Bank Limited - India
- Semirara Mining Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Trasteel International SA, Italy
- Indian Energy Exchange, India
- Carbofer General Trading SA - India
- Antam Resourcindo - Indonesia
- Australian Coal Association
- Bhushan Steel Limited - India
- Mjunction Services Limited - India
- Maheswari Brothers Coal Limited - India
- Leighton Contractors Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Central Electricity Authority - India
- Globalindo Alam Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Sical Logistics Limited - India
- Ministry of Transport, Egypt
- Manunggal Multi Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Wood Mackenzie - Singapore
- Toyota Tsusho Corporation, Japan
- GN Power Mariveles Coal Plant, Philippines
- Thai Mozambique Logistica
- Medco Energi Mining Internasional
- Sinarmas Energy and Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Georgia Ports Authority, United States
- Bahari Cakrawala Sebuku - Indonesia
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- MS Steel International - UAE
- Bulk Trading Sa - Switzerland
- IEA Clean Coal Centre - UK
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Timah Investasi Mineral - Indoneisa
- LBH Netherlands Bv - Netherlands
- Thiess Contractors Indonesia
- PTC India Limited - India
- Intertek Mineral Services - Indonesia
- Baramulti Group, Indonesia
- Planning Commission, India
- Minerals Council of Australia
- Altura Mining Limited, Indonesia
- Vedanta Resources Plc - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercuria Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Bhatia International Limited - India
- Miang Besar Coal Terminal - Indonesia
- Commonwealth Bank - Australia
- Goldman Sachs - Singapore
- Alfred C Toepfer International GmbH - Germany
- Attock Cement Pakistan Limited
- Kohat Cement Company Ltd. - Pakistan
- Global Coal Blending Company Limited - Australia
- Cement Manufacturers Association - India
- Price Waterhouse Coopers - Russia
- White Energy Company Limited
- Sree Jayajothi Cements Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate Of Revenue Intelligence - India
- Anglo American - United Kingdom
- Bukit Makmur.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Bangladesh Power Developement Board
- Eastern Energy - Thailand
- Chettinad Cement Corporation Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- Standard Chartered Bank - UAE
- Interocean Group of Companies - India
- Lanco Infratech Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- European Bulk Services B.V. - Netherlands
- Kartika Selabumi Mining - Indonesia
- Savvy Resources Ltd - HongKong
- Heidelberg Cement - Germany
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- Sakthi Sugars Limited - India
- Agrawal Coal Company - India
- Jorong Barutama Greston.PT - Indonesia
- Marubeni Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TNB Fuel Sdn Bhd - Malaysia
- Aditya Birla Group - India
- Eastern Coal Council - USA
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Bharathi Cement Corporation - India
- Oldendorff Carriers - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Meenaskhi Energy Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Kepco SPC Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
- Energy Development Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Tata Chemicals Ltd - India
- Coalindo Energy - Indonesia
- Power Finance Corporation Ltd., India
- International Coal Ventures Pvt Ltd - India
- Singapore Mercantile Exchange
- PowerSource Philippines DevCo
- Salva Resources Pvt Ltd - India
- Petron Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Essar Steel Hazira Ltd - India
- Uttam Galva Steels Limited - India
- Edison Trading Spa - Italy
- Binh Thuan Hamico - Vietnam
- Maharashtra Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Vizag Seaport Private Limited - India
- Iligan Light & Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- McConnell Dowell - Australia
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- The University of Queensland
- Parliament of New Zealand
- Indo Tambangraya Megah - Indonesia
- Videocon Industries ltd - India
- Wilmar Investment Holdings
- The Treasury - Australian Government
- Therma Luzon, Inc, Philippines
- Simpson Spence & Young - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Central Java Power - Indonesia
- Siam City Cement - Thailand
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Oil Corporation Limited
- Larsen & Toubro Limited - India
- Energy Link Ltd, New Zealand
- Indika Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Grasim Industreis Ltd - India
- SN Aboitiz Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Krishnapatnam Port Company Ltd. - India
- Renaissance Capital - South Africa
- Siam City Cement PLC, Thailand
- Romanian Commodities Exchange
- Straits Asia Resources Limited - Singapore
- Malabar Cements Ltd - India
- Meralco Power Generation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Borneo Indobara - Indonesia
- Africa Commodities Group - South Africa
- Jindal Steel & Power Ltd - India
- New Zealand Coal & Carbon
- Coal and Oil Company - UAE
- Samtan Co., Ltd - South Korea
- Makarim & Taira - Indonesia
- Orica Australia Pty. Ltd.
- Jaiprakash Power Ventures ltd
- Global Business Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- San Jose City I Power Corp, Philippines
- GMR Energy Limited - India
- Mintek Dendrill Indonesia
- Electricity Generating Authority of Thailand
- Asmin Koalindo Tuhup - Indonesia
- Posco Energy - South Korea
- Riau Bara Harum - Indonesia
- Indogreen Group - Indonesia
- Metalloyd Limited - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
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