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