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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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Monday, 01 April 19
AUSTRALIAN COAL AT RISK FROM CHINA MOVE, WARNS GOVERNMENT REPORT - SYDNEY MORNING HERALD
A new government report warns China’s restrictions on coal imports is the number one risk for Australian coal this year and could lead to a s ...
Saturday, 30 March 19
KOEN INVITES BIDS FOR 450,000 TONS OF (SUB) BITUMINOUS COAL FOR H1 AND JUNE 2019
South Korea state-owned utility KOREA SOUTH-EAST POWER CO., LTD. (KOEN) issued a tender for total 450,000 MT of min. 4300, 3500 and 5600 NCV ...
Wednesday, 27 March 19
SHIPPING MARKET INSIGHT - INTERMODAL
Contrary to the December 2018 forecasts but in line with the expectations of the dry bulk market, the first quarter of the year closed negatively. ...
Saturday, 23 March 19
IT WAS A POSITIVE WEEK FOR THE HANDY SIZE MARKET - BALTIC BRIEFING
Capesize
The big ships endured heavy losses last week extinguishing any hopes from the recent minor rally. Negative sentiment gained pace throu ...
Friday, 22 March 19
CHINA MARKET: COAL OUT IN THE COLD - BUSINESS RECORDER
Though China maintains there is no ban, China-bound Australian coal shipments are looking for a new home. For the past few months, coal cargoes are ...
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- Madhucon Powers Ltd - India
- Gujarat Sidhee Cement - India
- Commonwealth Bank - Australia
- Rio Tinto Coal - Australia
- Medco Energi Mining Internasional
- Toyota Tsusho Corporation, Japan
- Mjunction Services Limited - India
- Sakthi Sugars Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Xindia Steels Limited - India
- Latin American Coal - Colombia
- Global Coal Blending Company Limited - Australia
- Indogreen Group - Indonesia
- ASAPP Information Group - India
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- Indonesian Coal Mining Association
- Coastal Gujarat Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Vedanta Resources Plc - India
- Deloitte Consulting - India
- PNOC Exploration Corporation - Philippines
- Bhatia International Limited - India
- Central Java Power - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Salva Resources Pvt Ltd - India
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- Bulk Trading Sa - Switzerland
- Ministry of Transport, Egypt
- India Bulls Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- New Zealand Coal & Carbon
- CNBM International Corporation - China
- European Bulk Services B.V. - Netherlands
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Essar Steel Hazira Ltd - India
- Posco Energy - South Korea
- Electricity Authority, New Zealand
- Coalindo Energy - Indonesia
- Baramulti Group, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Riau Bara Harum - Indonesia
- Ind-Barath Power Infra Limited - India
- Ambuja Cements Ltd - India
- Georgia Ports Authority, United States
- Banpu Public Company Limited - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meenaskhi Energy Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Petrochimia International Co. Ltd.- Taiwan
- ICICI Bank Limited - India
- Malabar Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Kaltim Prima Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Oldendorff Carriers - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining Corp, Philippines
- Anglo American - United Kingdom
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- SN Aboitiz Power Inc, Philippines
- Star Paper Mills Limited - India
- White Energy Company Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The Treasury - Australian Government
- Central Electricity Authority - India
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Thiess Contractors Indonesia
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Australian Commodity Traders Exchange
- Thai Mozambique Logistica
- Ministry of Mines - Canada
- McConnell Dowell - Australia
- GMR Energy Limited - India
- Jindal Steel & Power Ltd - India
- Indika Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- Meralco Power Generation, Philippines
- Aboitiz Power Corporation - Philippines
- Port Waratah Coal Services - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mintek Dendrill Indonesia
- Dalmia Cement Bharat India
- Orica Australia Pty. Ltd.
- Sical Logistics Limited - India
- Bukit Makmur.PT - Indonesia
- Altura Mining Limited, Indonesia
- MS Steel International - UAE
- Economic Council, Georgia
- London Commodity Brokers - England
- Siam City Cement - Thailand
- Grasim Industreis Ltd - India
- Maheswari Brothers Coal Limited - India
- Sree Jayajothi Cements Limited - India
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- Parry Sugars Refinery, India
- Karaikal Port Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asmin Koalindo Tuhup - Indonesia
- Bhushan Steel Limited - India
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Chettinad Cement Corporation Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Antam Resourcindo - Indonesia
- Barasentosa Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Videocon Industries ltd - India
- Independent Power Producers Association of India
- Ministry of Finance - Indonesia
- Straits Asia Resources Limited - Singapore
- Kartika Selabumi Mining - Indonesia
- SMG Consultants - Indonesia
- IEA Clean Coal Centre - UK
- Indo Tambangraya Megah - Indonesia
- Global Business Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Romanian Commodities Exchange
- Vizag Seaport Private Limited - India
- Wilmar Investment Holdings
- Kumho Petrochemical, South Korea
- Karbindo Abesyapradhi - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Intertek Mineral Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- TeaM Sual Corporation - Philippines
- GVK Power & Infra Limited - India
- The University of Queensland
- Orica Mining Services - Indonesia
- The State Trading Corporation of India Ltd
- Renaissance Capital - South Africa
- Pendopo Energi Batubara - Indonesia
- VISA Power Limited - India
- Minerals Council of Australia
- Trasteel International SA, Italy
- Eastern Energy - Thailand
- Chamber of Mines of South Africa
- Standard Chartered Bank - UAE
- Mercator Lines Limited - India
- Bukit Baiduri Energy - Indonesia
- Sojitz Corporation - Japan
- PetroVietnam Power Coal Import and Supply Company
- Agrawal Coal Company - India
- Electricity Generating Authority of Thailand
- Lanco Infratech Ltd - India
- Goldman Sachs - Singapore
- Binh Thuan Hamico - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Merrill Lynch Commodities Europe
- Formosa Plastics Group - Taiwan
- SMC Global Power, Philippines
- Gujarat Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Indian Oil Corporation Limited
- Makarim & Taira - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- PTC India Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Simpson Spence & Young - Indonesia
- Bharathi Cement Corporation - India
- Edison Trading Spa - Italy
- Price Waterhouse Coopers - Russia
- Bangladesh Power Developement Board
- Larsen & Toubro Limited - India
- Therma Luzon, Inc, Philippines
- Cement Manufacturers Association - India
- Heidelberg Cement - Germany
- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- OPG Power Generation Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Australian Coal Association
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Singapore Mercantile Exchange
- Planning Commission, India
- Kalimantan Lumbung Energi - Indonesia
- Power Finance Corporation Ltd., India
- Vijayanagar Sugar Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Holcim Trading Pte Ltd - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Coal and Oil Company - UAE
- Parliament of New Zealand
- LBH Netherlands Bv - Netherlands
- Aditya Birla Group - India
- Petron Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- PowerSource Philippines DevCo
- Siam City Cement PLC, Thailand
- Attock Cement Pakistan Limited
- Tamil Nadu electricity Board
- Samtan Co., Ltd - South Korea
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