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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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Thursday, 24 October 19
AUSTRALIA'S HOPES TO EXPAND COAL EXPORTS IN SOUTH-EAST ASIA 'DELUSIONAL', EXPERTS SAY - THE GUARDIAN
The number of new coal-fired power plants starting construction across south-east Asia has fallen markedly over the past two years as Australia has ...
Thursday, 24 October 19
PANAMAX: NEGATIVE SENTIMENT IN THE MARKET AS IT CONTINUES TO WEAKEN - FEARNLEYS
Capesize
The market has continued to slide the last week, as lack of fresh requirements and a slight oversupply of tonnage heading towards Sout ...
Wednesday, 23 October 19
CHINA'S 2019 COAL IMPORTS SET TO RISE MORE THAN 10%: ANALYSTS - REUTERS
China, the world’s top coal buyer, is on track to boost imports of the fuel by more than 10% this year, traders and analysts said on Tuesday, ...
Wednesday, 23 October 19
SHIPPING MARKET INSIGHT - INTERMODAL
Moving closer to the end of the year, we are facing what the market was expecting for quite a while, the ship repair sector booming with the shipya ...
Tuesday, 22 October 19
DRY BULK: DESPITE THE DOWNWARD CORRECTION NOTED OVER THE PAST MONTH, RATES ARE STILL HOLDING OFF AT FAVORABLE LEVELS - ALLIED SHIPPING
Despite the downward correction that has been noted in the dry bulk market over the past month, rates are still holding off at favorable levels. Ev ...
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- Bhoruka Overseas - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Riau Bara Harum - Indonesia
- ASAPP Information Group - India
- Antam Resourcindo - Indonesia
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- Thai Mozambique Logistica
- Banpu Public Company Limited - Thailand
- GVK Power & Infra Limited - India
- Indian Oil Corporation Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bulk Trading Sa - Switzerland
- Trasteel International SA, Italy
- Coal and Oil Company - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- Sarangani Energy Corporation, Philippines
- Medco Energi Mining Internasional
- PNOC Exploration Corporation - Philippines
- Semirara Mining Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Port Waratah Coal Services - Australia
- PowerSource Philippines DevCo
- VISA Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Heidelberg Cement - Germany
- Georgia Ports Authority, United States
- Mercator Lines Limited - India
- Sindya Power Generating Company Private Ltd
- Interocean Group of Companies - India
- The University of Queensland
- Independent Power Producers Association of India
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- Intertek Mineral Services - Indonesia
- Star Paper Mills Limited - India
- Price Waterhouse Coopers - Russia
- Ministry of Transport, Egypt
- Karaikal Port Pvt Ltd - India
- New Zealand Coal & Carbon
- Metalloyd Limited - United Kingdom
- Dalmia Cement Bharat India
- San Jose City I Power Corp, Philippines
- White Energy Company Limited
- Agrawal Coal Company - India
- Altura Mining Limited, Indonesia
- Ambuja Cements Ltd - India
- Bukit Baiduri Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Ind-Barath Power Infra Limited - India
- Bhushan Steel Limited - India
- Vizag Seaport Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Madhucon Powers Ltd - India
- South Luzon Thermal Energy Corporation
- Romanian Commodities Exchange
- IEA Clean Coal Centre - UK
- Central Electricity Authority - India
- Parliament of New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Ministry of Mines - Canada
- CIMB Investment Bank - Malaysia
- GMR Energy Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Indonesian Coal Mining Association
- Jindal Steel & Power Ltd - India
- Aboitiz Power Corporation - Philippines
- Energy Link Ltd, New Zealand
- Tata Chemicals Ltd - India
- Indian Energy Exchange, India
- Deloitte Consulting - India
- Tamil Nadu electricity Board
- SMG Consultants - Indonesia
- Orica Australia Pty. Ltd.
- Bahari Cakrawala Sebuku - Indonesia
- Bayan Resources Tbk. - Indonesia
- Manunggal Multi Energi - Indonesia
- Mercuria Energy - Indonesia
- London Commodity Brokers - England
- Iligan Light & Power Inc, Philippines
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
- Coastal Gujarat Power Limited - India
- Kaltim Prima Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Economic Council, Georgia
- McConnell Dowell - Australia
- Ministry of Finance - Indonesia
- Carbofer General Trading SA - India
- Singapore Mercantile Exchange
- Standard Chartered Bank - UAE
- Renaissance Capital - South Africa
- Minerals Council of Australia
- Indogreen Group - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- Siam City Cement - Thailand
- Thiess Contractors Indonesia
- Global Coal Blending Company Limited - Australia
- IHS Mccloskey Coal Group - USA
- Straits Asia Resources Limited - Singapore
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parry Sugars Refinery, India
- Rio Tinto Coal - Australia
- Attock Cement Pakistan Limited
- Kideco Jaya Agung - Indonesia
- Uttam Galva Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Borneo Indobara - Indonesia
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- Sical Logistics Limited - India
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Bukit Makmur.PT - Indonesia
- TeaM Sual Corporation - Philippines
- Bangladesh Power Developement Board
- SMC Global Power, Philippines
- CNBM International Corporation - China
- Baramulti Group, Indonesia
- Eastern Coal Council - USA
- Jaiprakash Power Ventures ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Xindia Steels Limited - India
- Oldendorff Carriers - Singapore
- Africa Commodities Group - South Africa
- Timah Investasi Mineral - Indoneisa
- The State Trading Corporation of India Ltd
- Electricity Authority, New Zealand
- OPG Power Generation Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Essar Steel Hazira Ltd - India
- Indo Tambangraya Megah - Indonesia
- Aditya Birla Group - India
- GAC Shipping (India) Pvt Ltd
- Kobexindo Tractors - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- ICICI Bank Limited - India
- Sojitz Corporation - Japan
- PTC India Limited - India
- Planning Commission, India
- Bukit Asam (Persero) Tbk - Indonesia
- Vedanta Resources Plc - India
- Merrill Lynch Commodities Europe
- Neyveli Lignite Corporation Ltd, - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Maheswari Brothers Coal Limited - India
- Eastern Energy - Thailand
- Chamber of Mines of South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Wilmar Investment Holdings
- Therma Luzon, Inc, Philippines
- Gujarat Sidhee Cement - India
- Global Green Power PLC Corporation, Philippines
- India Bulls Power Limited - India
- Sakthi Sugars Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bharathi Cement Corporation - India
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- Meralco Power Generation, Philippines
- Wood Mackenzie - Singapore
- Salva Resources Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Samtan Co., Ltd - South Korea
- Toyota Tsusho Corporation, Japan
- Power Finance Corporation Ltd., India
- Lanco Infratech Ltd - India
- Globalindo Alam Lestari - Indonesia
- Bhatia International Limited - India
- Indika Energy - Indonesia
- Latin American Coal - Colombia
- Barasentosa Lestari - Indonesia
- Commonwealth Bank - Australia
- Cement Manufacturers Association - India
- Alfred C Toepfer International GmbH - Germany
- Kalimantan Lumbung Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- International Coal Ventures Pvt Ltd - India
- Australian Coal Association
- Holcim Trading Pte Ltd - Singapore
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Grasim Industreis Ltd - India
- Global Business Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Meenaskhi Energy Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Formosa Plastics Group - Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Binh Thuan Hamico - Vietnam
- Billiton Holdings Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Gujarat Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- The Treasury - Australian Government
- Larsen & Toubro Limited - India
- Mintek Dendrill Indonesia
- Directorate General of MIneral and Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
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