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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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Monday, 09 February 15
Q2' CFR SOUTH CHINA COAL SWAP DECLINED 3.28% TO $ 56.92 W-O-W
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery declined US$ 1.93 (-3.28%) per MT month over month and US$ 0.10 (-0 ...
Sunday, 08 February 15
BDI FELL CONTINUOUSLY HIT A THREE DECADES LOW
COALspot.com: This week Baltic Exchange Dry Freight Index (BDI) fell continuously hit a three decades low.
The BDI continuously fell and was d ...
Friday, 06 February 15
WEEKLY U.S. COAL PRODUCTION UP AN ESTIMATED 1.1% FROM LAST WEEK - EIA
COALspot.com – United States the world's one of the largest coal producers, produced approximately 20.1 million short tons (mmst) of coal ...
Friday, 06 February 15
SHIP DAMAGED BY FIRE CAUSED BY PIRATES FOUND TO BE CONSTRUCTIVE TOTAL LOSS - TAYLOR WESSING
KNOWLEDGE TO ELEVATE
The High Court was asked to determine a number of preliminary issues, including whether a vessel was a constructive total ...
Thursday, 05 February 15
BDI HAS NOW FALLEN A LEVEL CLOSE TO THE INDEX'S HISTORIC LOW - INTERMODAL
They say a picture is worth a thousand words and in this instance just one look at the tables above is enough to understand the great pressure the ...
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- Holcim Trading Pte Ltd - Singapore
- Riau Bara Harum - Indonesia
- Commonwealth Bank - Australia
- Tata Chemicals Ltd - India
- Energy Link Ltd, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mintek Dendrill Indonesia
- Global Green Power PLC Corporation, Philippines
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- Ambuja Cements Ltd - India
- Baramulti Group, Indonesia
- Coalindo Energy - Indonesia
- Thai Mozambique Logistica
- Simpson Spence & Young - Indonesia
- Africa Commodities Group - South Africa
- Tamil Nadu electricity Board
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kepco SPC Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Merrill Lynch Commodities Europe
- Indian Energy Exchange, India
- Energy Development Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Parry Sugars Refinery, India
- Gujarat Sidhee Cement - India
- Toyota Tsusho Corporation, Japan
- Wilmar Investment Holdings
- Jaiprakash Power Ventures ltd
- GN Power Mariveles Coal Plant, Philippines
- Coastal Gujarat Power Limited - India
- Binh Thuan Hamico - Vietnam
- Goldman Sachs - Singapore
- Kalimantan Lumbung Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- The University of Queensland
- Borneo Indobara - Indonesia
- Edison Trading Spa - Italy
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Oldendorff Carriers - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Cement Manufacturers Association - India
- Carbofer General Trading SA - India
- Indian Oil Corporation Limited
- White Energy Company Limited
- Straits Asia Resources Limited - Singapore
- Siam City Cement PLC, Thailand
- Ministry of Finance - Indonesia
- Price Waterhouse Coopers - Russia
- Bukit Makmur.PT - Indonesia
- GAC Shipping (India) Pvt Ltd
- Cigading International Bulk Terminal - Indonesia
- GVK Power & Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Bharathi Cement Corporation - India
- Aditya Birla Group - India
- Gujarat Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Bhatia International Limited - India
- Parliament of New Zealand
- Orica Mining Services - Indonesia
- Petron Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sinarmas Energy and Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Sindya Power Generating Company Private Ltd
- Semirara Mining and Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- ICICI Bank Limited - India
- Karbindo Abesyapradhi - Indoneisa
- SMC Global Power, Philippines
- Chamber of Mines of South Africa
- New Zealand Coal & Carbon
- Asmin Koalindo Tuhup - Indonesia
- London Commodity Brokers - England
- Ceylon Electricity Board - Sri Lanka
- Billiton Holdings Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Leighton Contractors Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Intertek Mineral Services - Indonesia
- Indonesian Coal Mining Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Manunggal Multi Energi - Indonesia
- Electricity Authority, New Zealand
- Bangladesh Power Developement Board
- Barasentosa Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Vizag Seaport Private Limited - India
- Orica Australia Pty. Ltd.
- Essar Steel Hazira Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Meenaskhi Energy Private Limited - India
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- Samtan Co., Ltd - South Korea
- Electricity Generating Authority of Thailand
- Economic Council, Georgia
- Siam City Cement - Thailand
- CNBM International Corporation - China
- Global Business Power Corporation, Philippines
- Mercator Lines Limited - India
- PNOC Exploration Corporation - Philippines
- Latin American Coal - Colombia
- Xindia Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- The Treasury - Australian Government
- Minerals Council of Australia
- Rio Tinto Coal - Australia
- Wood Mackenzie - Singapore
- Karaikal Port Pvt Ltd - India
- Sical Logistics Limited - India
- Singapore Mercantile Exchange
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Salva Resources Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Sarangani Energy Corporation, Philippines
- Port Waratah Coal Services - Australia
- Global Coal Blending Company Limited - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
- Attock Cement Pakistan Limited
- The State Trading Corporation of India Ltd
- Kobexindo Tractors - Indoneisa
- CIMB Investment Bank - Malaysia
- Deloitte Consulting - India
- Videocon Industries ltd - India
- Independent Power Producers Association of India
- Bhoruka Overseas - Indonesia
- PTC India Limited - India
- Heidelberg Cement - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Globalindo Alam Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Australian Coal Association
- Metalloyd Limited - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Ministry of Transport, Egypt
- Central Java Power - Indonesia
- TeaM Sual Corporation - Philippines
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- Vedanta Resources Plc - India
- Eastern Coal Council - USA
- Star Paper Mills Limited - India
- Formosa Plastics Group - Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Aboitiz Power Corporation - Philippines
- Australian Commodity Traders Exchange
- Sojitz Corporation - Japan
- Agrawal Coal Company - India
- Mercuria Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Kumho Petrochemical, South Korea
- SN Aboitiz Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Baiduri Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Maharashtra Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Grasim Industreis Ltd - India
- Jindal Steel & Power Ltd - India
- Sree Jayajothi Cements Limited - India
- Planning Commission, India
- Power Finance Corporation Ltd., India
- Therma Luzon, Inc, Philippines
- Marubeni Corporation - India
- Thiess Contractors Indonesia
- VISA Power Limited - India
- Medco Energi Mining Internasional
- Central Electricity Authority - India
- MS Steel International - UAE
- Georgia Ports Authority, United States
- Chettinad Cement Corporation Ltd - India
- South Luzon Thermal Energy Corporation
- Uttam Galva Steels Limited - India
- Malabar Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- Renaissance Capital - South Africa
- Romanian Commodities Exchange
- Anglo American - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indogreen Group - Indonesia
- Kideco Jaya Agung - Indonesia
- Altura Mining Limited, Indonesia
- International Coal Ventures Pvt Ltd - India
- Ministry of Mines - Canada
- Interocean Group of Companies - India
- Dalmia Cement Bharat India
- GMR Energy Limited - India
- Mjunction Services Limited - India
- Indo Tambangraya Megah - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- McConnell Dowell - Australia
- Antam Resourcindo - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- PowerSource Philippines DevCo
- Bhushan Steel Limited - India
- SMG Consultants - Indonesia
- European Bulk Services B.V. - Netherlands
- IHS Mccloskey Coal Group - USA
- Kapuas Tunggal Persada - Indonesia
- Maheswari Brothers Coal Limited - India
- Ind-Barath Power Infra Limited - India
- India Bulls Power Limited - India
- Savvy Resources Ltd - HongKong
- Coal and Oil Company - UAE
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