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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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Wednesday, 14 October 20
CHINA COKING COAL FUTURES RALLY ON REPORTED BAN ON AUSTRALIA CARGOES - REUTERS
Dalian coking coal futures rallied for a sixth straight session on Tuesday after reports surfaced that China had stopped buying coal from Australia ...
Wednesday, 14 October 20
MARKET INSIGHT - INTERMODAL
The tanker market has experienced severe freight rate and asset value declines over the past 5 months. A potential market upturn may arise in the c ...
Friday, 09 October 20
INDIA'S COAL IMPORTS IMPROVE SOMEWHAT, BUT RECOVERY IS UNEVEN - REUTERS
India’s coal imports, depressed by the impact of coronavirus this year, regained ground in September, but in an uneven uptick – shipmen ...
Thursday, 08 October 20
CHINA'S COAL IMPORTS FROM INDONESIA DECLINED 16.4% Y-O-Y, TO 80.2 MLN TONNES IN THE FIRST 9 MONTHS OF 2020 - BANCHERO COSTA
China's coal imports boomed in 2019, surprising many who had expected the government would clamp down strictly on shipments.
...
Thursday, 08 October 20
GLIMMER OF LIGHT FOR COAL, BUT SHORT TERM - FNARENA
Is coal on the rebound? Demand appears stronger and supply reductions have underpinned a tightening market. Certainly, the Newcastle thermal coal p ...
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- Orica Australia Pty. Ltd.
- Iligan Light & Power Inc, Philippines
- Meralco Power Generation, Philippines
- Energy Link Ltd, New Zealand
- Kobexindo Tractors - Indoneisa
- Aboitiz Power Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Sojitz Corporation - Japan
- Bukit Baiduri Energy - Indonesia
- Ambuja Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Borneo Indobara - Indonesia
- Malabar Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Barasentosa Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- Vedanta Resources Plc - India
- Pendopo Energi Batubara - Indonesia
- Interocean Group of Companies - India
- Mjunction Services Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Ministry of Finance - Indonesia
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- TeaM Sual Corporation - Philippines
- Marubeni Corporation - India
- Eastern Energy - Thailand
- Thiess Contractors Indonesia
- Independent Power Producers Association of India
- Thai Mozambique Logistica
- International Coal Ventures Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Sree Jayajothi Cements Limited - India
- Attock Cement Pakistan Limited
- Wilmar Investment Holdings
- Ministry of Mines - Canada
- Timah Investasi Mineral - Indoneisa
- Essar Steel Hazira Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining Corp, Philippines
- Africa Commodities Group - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Deloitte Consulting - India
- New Zealand Coal & Carbon
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- Star Paper Mills Limited - India
- Indonesian Coal Mining Association
- Vijayanagar Sugar Pvt Ltd - India
- Wood Mackenzie - Singapore
- Economic Council, Georgia
- Kumho Petrochemical, South Korea
- SN Aboitiz Power Inc, Philippines
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- Gujarat Sidhee Cement - India
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- Rio Tinto Coal - Australia
- Madhucon Powers Ltd - India
- Chamber of Mines of South Africa
- San Jose City I Power Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Straits Asia Resources Limited - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- AsiaOL BioFuels Corp., Philippines
- IEA Clean Coal Centre - UK
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Jindal Steel & Power Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining and Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- PTC India Limited - India
- ICICI Bank Limited - India
- Ministry of Transport, Egypt
- Sakthi Sugars Limited - India
- Alfred C Toepfer International GmbH - Germany
- Indika Energy - Indonesia
- SMC Global Power, Philippines
- The Treasury - Australian Government
- Lanco Infratech Ltd - India
- Altura Mining Limited, Indonesia
- Mintek Dendrill Indonesia
- Planning Commission, India
- GAC Shipping (India) Pvt Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Port Waratah Coal Services - Australia
- Dalmia Cement Bharat India
- Larsen & Toubro Limited - India
- VISA Power Limited - India
- Coastal Gujarat Power Limited - India
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- Siam City Cement - Thailand
- Parliament of New Zealand
- Miang Besar Coal Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Baramulti Group, Indonesia
- McConnell Dowell - Australia
- Renaissance Capital - South Africa
- Bhatia International Limited - India
- MS Steel International - UAE
- Indian Oil Corporation Limited
- The State Trading Corporation of India Ltd
- Bangladesh Power Developement Board
- Samtan Co., Ltd - South Korea
- Siam City Cement PLC, Thailand
- GVK Power & Infra Limited - India
- Agrawal Coal Company - India
- Price Waterhouse Coopers - Russia
- PNOC Exploration Corporation - Philippines
- Anglo American - United Kingdom
- The University of Queensland
- Metalloyd Limited - United Kingdom
- Cement Manufacturers Association - India
- South Luzon Thermal Energy Corporation
- Makarim & Taira - Indonesia
- London Commodity Brokers - England
- Cigading International Bulk Terminal - Indonesia
- India Bulls Power Limited - India
- Bulk Trading Sa - Switzerland
- Globalindo Alam Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- GMR Energy Limited - India
- Grasim Industreis Ltd - India
- Chettinad Cement Corporation Ltd - India
- PowerSource Philippines DevCo
- Ind-Barath Power Infra Limited - India
- Sarangani Energy Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Medco Energi Mining Internasional
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Java Power - Indonesia
- Therma Luzon, Inc, Philippines
- CNBM International Corporation - China
- Kalimantan Lumbung Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Goldman Sachs - Singapore
- Heidelberg Cement - Germany
- Ceylon Electricity Board - Sri Lanka
- Global Green Power PLC Corporation, Philippines
- Videocon Industries ltd - India
- Minerals Council of Australia
- Coalindo Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Petrochimia International Co. Ltd.- Taiwan
- Directorate Of Revenue Intelligence - India
- Holcim Trading Pte Ltd - Singapore
- Carbofer General Trading SA - India
- Bhushan Steel Limited - India
- Romanian Commodities Exchange
- Billiton Holdings Pty Ltd - Australia
- Central Electricity Authority - India
- Eastern Coal Council - USA
- Directorate General of MIneral and Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Singapore Mercantile Exchange
- White Energy Company Limited
- Coal and Oil Company - UAE
- GN Power Mariveles Coal Plant, Philippines
- Kideco Jaya Agung - Indonesia
- Binh Thuan Hamico - Vietnam
- European Bulk Services B.V. - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- Global Business Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Commonwealth Bank - Australia
- Tamil Nadu electricity Board
- Rashtriya Ispat Nigam Limited - India
- Global Coal Blending Company Limited - Australia
- Merrill Lynch Commodities Europe
- Australian Commodity Traders Exchange
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- Uttam Galva Steels Limited - India
- Trasteel International SA, Italy
- Australian Coal Association
- Formosa Plastics Group - Taiwan
- Sical Logistics Limited - India
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Toyota Tsusho Corporation, Japan
- Vizag Seaport Private Limited - India
- Latin American Coal - Colombia
- Bahari Cakrawala Sebuku - Indonesia
- CIMB Investment Bank - Malaysia
- Indian Energy Exchange, India
- Indogreen Group - Indonesia
- Bharathi Cement Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- LBH Netherlands Bv - Netherlands
- Mercuria Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- Parry Sugars Refinery, India
- Tata Chemicals Ltd - India
- Mercator Lines Limited - India
- OPG Power Generation Pvt Ltd - India
- Energy Development Corp, Philippines
- Petron Corporation, Philippines
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