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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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Thursday, 06 February 14
THE WORLD LARGEST COAL EXPORTER SHIPPED AROUND 35.90 MMT OF COAL IN DECEMBER 2013
COALspot.com: Indonesia, the world 4th largest coal producer and the Global largest multi grade coal exporter shipped around $2* billion worth ...
Thursday, 06 February 14
PANAMAX: FAR EAST IS ALMOST ABSENT AND ATLANTIC ON SLOW STEAM
Handy
Due to ongoing Chinese New Year the market is still quiet. Slowly we can see some fresh coal cargos entering the market with second half Feb/ ...
Wednesday, 05 February 14
DRY BULK MARKET HAS LOST FURTHER GROUND THIS PAST WEEK - INTERMODAL
COALspot.com: The Dry Bulk market has lost further ground this past week as activity ex-Far East disappeared into the Chinese holidays and owners id ...
Wednesday, 05 February 14
MARKET INSIGHT - TASOS PAPADOPOULOS
KNOWLEDGE TO ELEVATE
COALspot.com: Let's take a break from market prospects, numbers, order book etc. and shed some light on the conclusions of ...
Tuesday, 04 February 14
NEWCASTLE PORT'S WEEKLY COAL EXPORTS HIT NEW HIGH OF 3.53 MMT
COALspot.com: In the week ended 3 February 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled ...
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- ASAPP Information Group - India
- The University of Queensland
- Eastern Coal Council - USA
- Tata Chemicals Ltd - India
- Mjunction Services Limited - India
- Bhoruka Overseas - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Riau Bara Harum - Indonesia
- Indogreen Group - Indonesia
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- Coastal Gujarat Power Limited - India
- Mercator Lines Limited - India
- Singapore Mercantile Exchange
- Xindia Steels Limited - India
- Vizag Seaport Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Thai Mozambique Logistica
- Leighton Contractors Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Bhatia International Limited - India
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
- White Energy Company Limited
- Altura Mining Limited, Indonesia
- VISA Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Attock Cement Pakistan Limited
- Rashtriya Ispat Nigam Limited - India
- London Commodity Brokers - England
- Alfred C Toepfer International GmbH - Germany
- Therma Luzon, Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Gujarat Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Global Business Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Aboitiz Power Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Rio Tinto Coal - Australia
- Agrawal Coal Company - India
- Videocon Industries ltd - India
- Globalindo Alam Lestari - Indonesia
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- Toyota Tsusho Corporation, Japan
- Cement Manufacturers Association - India
- Kideco Jaya Agung - Indonesia
- Straits Asia Resources Limited - Singapore
- Central Java Power - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Meenaskhi Energy Private Limited - India
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- Sarangani Energy Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Madhucon Powers Ltd - India
- Power Finance Corporation Ltd., India
- Semirara Mining and Power Corporation, Philippines
- Deloitte Consulting - India
- Uttam Galva Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Timah Investasi Mineral - Indoneisa
- Essar Steel Hazira Ltd - India
- Savvy Resources Ltd - HongKong
- Siam City Cement PLC, Thailand
- Medco Energi Mining Internasional
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GVK Power & Infra Limited - India
- Wilmar Investment Holdings
- Kartika Selabumi Mining - Indonesia
- Parry Sugars Refinery, India
- Bangladesh Power Developement Board
- Renaissance Capital - South Africa
- Tamil Nadu electricity Board
- Sojitz Corporation - Japan
- Aditya Birla Group - India
- Kohat Cement Company Ltd. - Pakistan
- Vijayanagar Sugar Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Indo Tambangraya Megah - Indonesia
- Kaltim Prima Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Global Coal Blending Company Limited - Australia
- Chettinad Cement Corporation Ltd - India
- International Coal Ventures Pvt Ltd - India
- Mercuria Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Bukit Baiduri Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TeaM Sual Corporation - Philippines
- Malabar Cements Ltd - India
- Indika Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Minerals Council of Australia
- Africa Commodities Group - South Africa
- Karaikal Port Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Interocean Group of Companies - India
- Commonwealth Bank - Australia
- Intertek Mineral Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Makarim & Taira - Indonesia
- CIMB Investment Bank - Malaysia
- McConnell Dowell - Australia
- PowerSource Philippines DevCo
- Simpson Spence & Young - Indonesia
- Dalmia Cement Bharat India
- South Luzon Thermal Energy Corporation
- Thiess Contractors Indonesia
- Kapuas Tunggal Persada - Indonesia
- Electricity Generating Authority of Thailand
- Standard Chartered Bank - UAE
- India Bulls Power Limited - India
- Jaiprakash Power Ventures ltd
- Goldman Sachs - Singapore
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- New Zealand Coal & Carbon
- Coal and Oil Company - UAE
- Star Paper Mills Limited - India
- Sical Logistics Limited - India
- Baramulti Group, Indonesia
- Bayan Resources Tbk. - Indonesia
- Salva Resources Pvt Ltd - India
- Economic Council, Georgia
- Ambuja Cements Ltd - India
- The Treasury - Australian Government
- Trasteel International SA, Italy
- Sree Jayajothi Cements Limited - India
- Vedanta Resources Plc - India
- Sakthi Sugars Limited - India
- PTC India Limited - India
- Australian Coal Association
- Ind-Barath Power Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Electricity Authority, New Zealand
- CNBM International Corporation - China
- Semirara Mining Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Bulk Trading Sa - Switzerland
- Indonesian Coal Mining Association
- Formosa Plastics Group - Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- Energy Link Ltd, New Zealand
- ICICI Bank Limited - India
- Latin American Coal - Colombia
- Heidelberg Cement - Germany
- Pendopo Energi Batubara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Edison Trading Spa - Italy
- IEA Clean Coal Centre - UK
- Posco Energy - South Korea
- SMC Global Power, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate General of MIneral and Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Meralco Power Generation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Parliament of New Zealand
- Coalindo Energy - Indonesia
- Indian Oil Corporation Limited
- Karbindo Abesyapradhi - Indoneisa
- GAC Shipping (India) Pvt Ltd
- GMR Energy Limited - India
- Eastern Energy - Thailand
- The State Trading Corporation of India Ltd
- SMG Consultants - Indonesia
- LBH Netherlands Bv - Netherlands
- OPG Power Generation Pvt Ltd - India
- Marubeni Corporation - India
- Orica Australia Pty. Ltd.
- Billiton Holdings Pty Ltd - Australia
- Bhushan Steel Limited - India
- Orica Mining Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Planning Commission, India
- Ceylon Electricity Board - Sri Lanka
- Romanian Commodities Exchange
- Bharathi Cement Corporation - India
- Merrill Lynch Commodities Europe
- Petron Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Georgia Ports Authority, United States
- Sindya Power Generating Company Private Ltd
- Jindal Steel & Power Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- IHS Mccloskey Coal Group - USA
- Bahari Cakrawala Sebuku - Indonesia
- Indian Energy Exchange, India
- Energy Development Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- Central Electricity Authority - India
- Ministry of Transport, Egypt
- Larsen & Toubro Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Mines - Canada
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wood Mackenzie - Singapore
- Price Waterhouse Coopers - Russia
- Lanco Infratech Ltd - India
- Carbofer General Trading SA - India
- Bukit Makmur.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mintek Dendrill Indonesia
- Maheswari Brothers Coal Limited - India
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