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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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Saturday, 18 January 20
BIMCO: LOW-SULPHUR FUEL SALE JUMPS TO A 70% SHARE IN SINGAPORE, AS THE IMO 2020 SULPHUR CAP KICKS IN
The final quarter of 2019 marked a massive decline of HSFO sales, as the industry transitioned into compliance of the IMO 2020 Sulphur Cap (IMO2020 ...
Saturday, 18 January 20
GERMAN STEAM COAL IMPORTS IN 2019 PLUMMETED BY 17 % - COAL IMPORTERS ASSOCIATION
Press Release: According to preliminary calculations by the German Coal Importers Association (Verein der Kohlenimporteure e. V.), world trade in h ...
Saturday, 18 January 20
A 61,400 DWT FIXED FROM SOUTH EAST ASIA DELIVERY EAST KALIMANTAN REDELIVERY WEST COAST INDIA IN THE LOW $7,000S - BALTIC BRIEFING
Capesize
The market was relatively stable over this past week putting an end to the past months of more extreme declines. While the Capesize 5T ...
Friday, 17 January 20
EIA ESTIMATES THAT U.S. COAL PRODUCTION DECLINED BY 65 MMST (9%) TO 690 MMST IN 2019. IN 2020, COAL PRODUCTION WILL DECLINE BY A FURTHER 14% TO 597 MMST
U.S. Coal Supply.
EIA estimates that U.S. coal production declined by 65 million short tons (MMst) (9%) to 690 MMst in 2019. In 2020, EIA ...
Friday, 17 January 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index, a gauge of coal p ...
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- London Commodity Brokers - England
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coastal Gujarat Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Videocon Industries ltd - India
- PNOC Exploration Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Eastern Energy - Thailand
- PowerSource Philippines DevCo
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- Grasim Industreis Ltd - India
- Sical Logistics Limited - India
- Ministry of Transport, Egypt
- Holcim Trading Pte Ltd - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Trasteel International SA, Italy
- Karbindo Abesyapradhi - Indoneisa
- Therma Luzon, Inc, Philippines
- Simpson Spence & Young - Indonesia
- Rio Tinto Coal - Australia
- Pendopo Energi Batubara - Indonesia
- GAC Shipping (India) Pvt Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sojitz Corporation - Japan
- Meralco Power Generation, Philippines
- VISA Power Limited - India
- Bangladesh Power Developement Board
- SN Aboitiz Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- Baramulti Group, Indonesia
- Tata Chemicals Ltd - India
- Global Business Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- SMC Global Power, Philippines
- Binh Thuan Hamico - Vietnam
- Indian Oil Corporation Limited
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- Kepco SPC Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- PTC India Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Central Electricity Authority - India
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- GVK Power & Infra Limited - India
- Bukit Makmur.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- GMR Energy Limited - India
- Indian Energy Exchange, India
- Vedanta Resources Plc - India
- Global Green Power PLC Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Coal and Oil Company - UAE
- Cement Manufacturers Association - India
- Renaissance Capital - South Africa
- Mercuria Energy - Indonesia
- Tamil Nadu electricity Board
- Australian Commodity Traders Exchange
- Timah Investasi Mineral - Indoneisa
- Sakthi Sugars Limited - India
- Medco Energi Mining Internasional
- Chettinad Cement Corporation Ltd - India
- Meenaskhi Energy Private Limited - India
- McConnell Dowell - Australia
- Billiton Holdings Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement - Thailand
- Mintek Dendrill Indonesia
- Semirara Mining Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Larsen & Toubro Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bharathi Cement Corporation - India
- MS Steel International - UAE
- Parry Sugars Refinery, India
- Aditya Birla Group - India
- Central Java Power - Indonesia
- Bhatia International Limited - India
- Orica Mining Services - Indonesia
- Mercator Lines Limited - India
- Karaikal Port Pvt Ltd - India
- New Zealand Coal & Carbon
- Bulk Trading Sa - Switzerland
- AsiaOL BioFuels Corp., Philippines
- Chamber of Mines of South Africa
- Energy Link Ltd, New Zealand
- Directorate Of Revenue Intelligence - India
- Indogreen Group - Indonesia
- Posco Energy - South Korea
- Krishnapatnam Port Company Ltd. - India
- Jorong Barutama Greston.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Ministry of Mines - Canada
- Port Waratah Coal Services - Australia
- European Bulk Services B.V. - Netherlands
- Uttam Galva Steels Limited - India
- Maheswari Brothers Coal Limited - India
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- Attock Cement Pakistan Limited
- Sree Jayajothi Cements Limited - India
- Electricity Generating Authority of Thailand
- Singapore Mercantile Exchange
- Minerals Council of Australia
- Deloitte Consulting - India
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- Petron Corporation, Philippines
- IEA Clean Coal Centre - UK
- Makarim & Taira - Indonesia
- Price Waterhouse Coopers - Russia
- The State Trading Corporation of India Ltd
- Kaltim Prima Coal - Indonesia
- Independent Power Producers Association of India
- Mjunction Services Limited - India
- Manunggal Multi Energi - Indonesia
- Carbofer General Trading SA - India
- Thiess Contractors Indonesia
- LBH Netherlands Bv - Netherlands
- Georgia Ports Authority, United States
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- Formosa Plastics Group - Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Savvy Resources Ltd - HongKong
- Bukit Baiduri Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Indika Energy - Indonesia
- Romanian Commodities Exchange
- Heidelberg Cement - Germany
- Oldendorff Carriers - Singapore
- Ambuja Cements Ltd - India
- Borneo Indobara - Indonesia
- Vizag Seaport Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Africa Commodities Group - South Africa
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Economic Council, Georgia
- Indonesian Coal Mining Association
- Bhushan Steel Limited - India
- ASAPP Information Group - India
- Banpu Public Company Limited - Thailand
- Toyota Tsusho Corporation, Japan
- Planning Commission, India
- CIMB Investment Bank - Malaysia
- TeaM Sual Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Star Paper Mills Limited - India
- Wilmar Investment Holdings
- India Bulls Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Leighton Contractors Pty Ltd - Australia
- Australian Coal Association
- Interocean Group of Companies - India
- Aboitiz Power Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Marubeni Corporation - India
- Altura Mining Limited, Indonesia
- Xindia Steels Limited - India
- Wood Mackenzie - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Rashtriya Ispat Nigam Limited - India
- The University of Queensland
- OPG Power Generation Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Ministry of Finance - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Riau Bara Harum - Indonesia
- Kobexindo Tractors - Indoneisa
- Standard Chartered Bank - UAE
- Kalimantan Lumbung Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- White Energy Company Limited
- Coalindo Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Kideco Jaya Agung - Indonesia
- Eastern Coal Council - USA
- Neyveli Lignite Corporation Ltd, - India
- Latin American Coal - Colombia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kumho Petrochemical, South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parliament of New Zealand
- Samtan Co., Ltd - South Korea
- Commonwealth Bank - Australia
- Anglo American - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- ICICI Bank Limited - India
- Jaiprakash Power Ventures ltd
- Power Finance Corporation Ltd., India
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- Gujarat Sidhee Cement - India
- Essar Steel Hazira Ltd - India
- Energy Development Corp, Philippines
- Orica Australia Pty. Ltd.
- TNB Fuel Sdn Bhd - Malaysia
- Cigading International Bulk Terminal - Indonesia
- CNBM International Corporation - China
- Dalmia Cement Bharat India
- Electricity Authority, New Zealand
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