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