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