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