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