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