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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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Tuesday, 30 December 14
INDIA INC TO BENEFIT AS IMPORTED COAL PRICES SET TO FALL - RAHUL PRITHIANI
The Hindu: India‘s coal import volumes are set to rise by over 30 per cent over the next two years to 214 million tonnes in 2015-16, as domes ...
Tuesday, 30 December 14
U.S WEEKLY COAL PRODUCTION ALMOST FLAT AT -0.2%
COALspot.com – United States the world's one of the largest coal producers, produced approximately 19.8 million short tons (mmst) of coal ...
Monday, 29 December 14
CHINESE COAL IMPORTS: REGULATORY RISKS? - CLARKSONS
In recent years, Chinese seaborne coal imports have surged, registering average growth of 67% p.a. between 2009 and 2013 to total 265mt. However, t ...
Monday, 29 December 14
BULK MARKET ENDS YEAR ON SOUR NOTE, SHIPBROKER SEES 'BUMPY ROAD AHEAD' - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
2014 was supposed to be the year that the dry bulk market would stage a comeback and a sustainable one for that matter. However, while for the most ...
Monday, 29 December 14
Q1'15 CFR SOUTH CHINA COAL SWAP CLOSED AT $59.42
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery has decreased by US$ 3.51 (-5.58%) month over month and US$ 0.08 (-0.13%) ...
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- Directorate General of MIneral and Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Merrill Lynch Commodities Europe
- Mercator Lines Limited - India
- Indian Energy Exchange, India
- Africa Commodities Group - South Africa
- South Luzon Thermal Energy Corporation
- Aboitiz Power Corporation - Philippines
- Grasim Industreis Ltd - India
- Jindal Steel & Power Ltd - India
- Oldendorff Carriers - Singapore
- Binh Thuan Hamico - Vietnam
- Renaissance Capital - South Africa
- International Coal Ventures Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Carbofer General Trading SA - India
- Singapore Mercantile Exchange
- AsiaOL BioFuels Corp., Philippines
- Leighton Contractors Pty Ltd - Australia
- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
- Energy Development Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Marubeni Corporation - India
- Minerals Council of Australia
- TeaM Sual Corporation - Philippines
- Thiess Contractors Indonesia
- IEA Clean Coal Centre - UK
- Trasteel International SA, Italy
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Therma Luzon, Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- Energy Link Ltd, New Zealand
- Directorate Of Revenue Intelligence - India
- Timah Investasi Mineral - Indoneisa
- SMG Consultants - Indonesia
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- Mintek Dendrill Indonesia
- Agrawal Coal Company - India
- India Bulls Power Limited - India
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Central Java Power - Indonesia
- Indika Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Siam City Cement PLC, Thailand
- Kepco SPC Power Corporation, Philippines
- Romanian Commodities Exchange
- Economic Council, Georgia
- Electricity Generating Authority of Thailand
- Globalindo Alam Lestari - Indonesia
- ASAPP Information Group - India
- Asmin Koalindo Tuhup - Indonesia
- Indian Oil Corporation Limited
- Central Electricity Authority - India
- Toyota Tsusho Corporation, Japan
- Cigading International Bulk Terminal - Indonesia
- Commonwealth Bank - Australia
- Bukit Makmur.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Iligan Light & Power Inc, Philippines
- The University of Queensland
- Vizag Seaport Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- Attock Cement Pakistan Limited
- Rio Tinto Coal - Australia
- Vedanta Resources Plc - India
- Sakthi Sugars Limited - India
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
- Parry Sugars Refinery, India
- Ind-Barath Power Infra Limited - India
- Bangladesh Power Developement Board
- Krishnapatnam Port Company Ltd. - India
- Sical Logistics Limited - India
- Madhucon Powers Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kumho Petrochemical, South Korea
- Bulk Trading Sa - Switzerland
- Goldman Sachs - Singapore
- Georgia Ports Authority, United States
- OPG Power Generation Pvt Ltd - India
- Global Business Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- GMR Energy Limited - India
- Parliament of New Zealand
- Larsen & Toubro Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Coastal Gujarat Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Essar Steel Hazira Ltd - India
- Thai Mozambique Logistica
- Simpson Spence & Young - Indonesia
- Salva Resources Pvt Ltd - India
- Sojitz Corporation - Japan
- Gujarat Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Sindya Power Generating Company Private Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wilmar Investment Holdings
- Banpu Public Company Limited - Thailand
- GN Power Mariveles Coal Plant, Philippines
- McConnell Dowell - Australia
- Indogreen Group - Indonesia
- Price Waterhouse Coopers - Russia
- Ministry of Finance - Indonesia
- PTC India Limited - India
- Videocon Industries ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- Edison Trading Spa - Italy
- Makarim & Taira - Indonesia
- Intertek Mineral Services - Indonesia
- Eastern Coal Council - USA
- Alfred C Toepfer International GmbH - Germany
- Power Finance Corporation Ltd., India
- Kapuas Tunggal Persada - Indonesia
- Indo Tambangraya Megah - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Australian Coal Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karbindo Abesyapradhi - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Eastern Energy - Thailand
- Petron Corporation, Philippines
- Chamber of Mines of South Africa
- Bharathi Cement Corporation - India
- Barasentosa Lestari - Indonesia
- Planning Commission, India
- Uttam Galva Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Mjunction Services Limited - India
- Port Waratah Coal Services - Australia
- New Zealand Coal & Carbon
- Formosa Plastics Group - Taiwan
- GAC Shipping (India) Pvt Ltd
- Bhoruka Overseas - Indonesia
- Samtan Co., Ltd - South Korea
- Chettinad Cement Corporation Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Lanco Infratech Ltd - India
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- MS Steel International - UAE
- Anglo American - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Transport, Egypt
- The Treasury - Australian Government
- Australian Commodity Traders Exchange
- Interocean Group of Companies - India
- Kalimantan Lumbung Energi - Indonesia
- CNBM International Corporation - China
- Kaltim Prima Coal - Indonesia
- VISA Power Limited - India
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- White Energy Company Limited
- Tamil Nadu electricity Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- Manunggal Multi Energi - Indonesia
- Mercuria Energy - Indonesia
- London Commodity Brokers - England
- Straits Asia Resources Limited - Singapore
- Maheswari Brothers Coal Limited - India
- Metalloyd Limited - United Kingdom
- Semirara Mining Corp, Philippines
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- Standard Chartered Bank - UAE
- Posco Energy - South Korea
- Ambuja Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- Star Paper Mills Limited - India
- Ministry of Mines - Canada
- Global Green Power PLC Corporation, Philippines
- Riau Bara Harum - Indonesia
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- Orica Australia Pty. Ltd.
- Gujarat Sidhee Cement - India
- Indonesian Coal Mining Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Latin American Coal - Colombia
- Antam Resourcindo - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- Bahari Cakrawala Sebuku - Indonesia
- Heidelberg Cement - Germany
- SMC Global Power, Philippines
- Holcim Trading Pte Ltd - Singapore
- Aditya Birla Group - India
- Sree Jayajothi Cements Limited - India
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