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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, 21 March 19
PRICE PLUNGE AS CHINESE LEAVE THERMAL COAL OUT IN THE COLD - AUSTRALIAN FINANCIAL REVIEW
Thermal coal exporter New Hope Corporation says China’s shipment squeeze on Australia is putting downward pressure on prices in all markets i ...
Wednesday, 20 March 19
COAL EXPORT FEARS RESURFACE AS RESTRICTIONS HIT MORE CHINESE PORTS AND AUSTRALIAN PRICES COP A 'BELTING' - ABC
Australian thermal coal exports to China are under increasing pressure, with indications import restrictions are spreading to other key ports.
...
Monday, 18 March 19
A 56,000DWT SHIP FIXED DELIVERY FOR A SINGAPORE TRIP VIA INDONESIA, RE-DELIVERY CHINA, AT $10,000 - BALTIC BRIEFING
Capesize
The Baltic Capesize market shrugged off its recent negative sentiment to post daily incremental improvements over the last week. Pacif ...
Saturday, 16 March 19
AUSTRALIAN COAL STILL FACING CHINESE DELAY - AAP
Australian coal exports to China are still facing delays, with protectionism and environmental checks blamed for the slowdown.
Coal ...
Thursday, 14 March 19
SUPRAMAX: INDO COAL CARGOES GETTING FIXED AT AROUND US$ 12000 TO CHINA - FEARNLEYS
Capesize
Average daily earning still well below operating costs, and owners keep bleeding - but nevertheless finally some bright spots for the ...
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- Pipit Mutiara Jaya. PT, Indonesia
- Port Waratah Coal Services - Australia
- Timah Investasi Mineral - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- New Zealand Coal & Carbon
- Banpu Public Company Limited - Thailand
- Kideco Jaya Agung - Indonesia
- Meenaskhi Energy Private Limited - India
- VISA Power Limited - India
- Aditya Birla Group - India
- Formosa Plastics Group - Taiwan
- Planning Commission, India
- Coal and Oil Company - UAE
- Intertek Mineral Services - Indonesia
- Rio Tinto Coal - Australia
- Antam Resourcindo - Indonesia
- Standard Chartered Bank - UAE
- Uttam Galva Steels Limited - India
- Iligan Light & Power Inc, Philippines
- GMR Energy Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Orica Mining Services - Indonesia
- Oldendorff Carriers - Singapore
- Savvy Resources Ltd - HongKong
- Mercator Lines Limited - India
- Bhoruka Overseas - Indonesia
- IHS Mccloskey Coal Group - USA
- Coalindo Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Bharathi Cement Corporation - India
- Simpson Spence & Young - Indonesia
- Malabar Cements Ltd - India
- Salva Resources Pvt Ltd - India
- Africa Commodities Group - South Africa
- GVK Power & Infra Limited - India
- PowerSource Philippines DevCo
- Mjunction Services Limited - India
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Star Paper Mills Limited - India
- Xindia Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Baramulti Group, Indonesia
- Barasentosa Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Independent Power Producers Association of India
- India Bulls Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Indian Oil Corporation Limited
- Anglo American - United Kingdom
- Australian Coal Association
- Sical Logistics Limited - India
- Sarangani Energy Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- GAC Shipping (India) Pvt Ltd
- Power Finance Corporation Ltd., India
- Interocean Group of Companies - India
- Vizag Seaport Private Limited - India
- Jaiprakash Power Ventures ltd
- Heidelberg Cement - Germany
- Singapore Mercantile Exchange
- CNBM International Corporation - China
- Semirara Mining Corp, Philippines
- Riau Bara Harum - Indonesia
- Goldman Sachs - Singapore
- PNOC Exploration Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Tata Chemicals Ltd - India
- South Luzon Thermal Energy Corporation
- Ind-Barath Power Infra Limited - India
- Videocon Industries ltd - India
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- Manunggal Multi Energi - Indonesia
- Ministry of Transport, Egypt
- Romanian Commodities Exchange
- Metalloyd Limited - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Sojitz Corporation - Japan
- Aboitiz Power Corporation - Philippines
- Georgia Ports Authority, United States
- Jindal Steel & Power Ltd - India
- European Bulk Services B.V. - Netherlands
- Altura Mining Limited, Indonesia
- Latin American Coal - Colombia
- Global Business Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Madhucon Powers Ltd - India
- Toyota Tsusho Corporation, Japan
- Samtan Co., Ltd - South Korea
- ICICI Bank Limited - India
- Directorate Of Revenue Intelligence - India
- San Jose City I Power Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- Ambuja Cements Ltd - India
- Larsen & Toubro Limited - India
- Directorate General of MIneral and Coal - Indonesia
- ASAPP Information Group - India
- Carbofer General Trading SA - India
- Bhushan Steel Limited - India
- The Treasury - Australian Government
- Australian Commodity Traders Exchange
- MS Steel International - UAE
- Sakthi Sugars Limited - India
- Essar Steel Hazira Ltd - India
- Central Java Power - Indonesia
- Grasim Industreis Ltd - India
- Vedanta Resources Plc - India
- Kartika Selabumi Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Petrochimia International Co. Ltd.- Taiwan
- Trasteel International SA, Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- SMC Global Power, Philippines
- Merrill Lynch Commodities Europe
- Kumho Petrochemical, South Korea
- Wilmar Investment Holdings
- Leighton Contractors Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- International Coal Ventures Pvt Ltd - India
- Mercuria Energy - Indonesia
- Agrawal Coal Company - India
- Maheswari Brothers Coal Limited - India
- The University of Queensland
- Maharashtra Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Siam City Cement PLC, Thailand
- PTC India Limited - India
- Alfred C Toepfer International GmbH - Germany
- Petron Corporation, Philippines
- Dalmia Cement Bharat India
- Indika Energy - Indonesia
- Medco Energi Mining Internasional
- Kapuas Tunggal Persada - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Sree Jayajothi Cements Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Commonwealth Bank - Australia
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Edison Trading Spa - Italy
- Electricity Authority, New Zealand
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
- Bhatia International Limited - India
- Orica Australia Pty. Ltd.
- AsiaOL BioFuels Corp., Philippines
- Chamber of Mines of South Africa
- Straits Asia Resources Limited - Singapore
- Holcim Trading Pte Ltd - Singapore
- Parry Sugars Refinery, India
- Posco Energy - South Korea
- Globalindo Alam Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- Wood Mackenzie - Singapore
- Bukit Makmur.PT - Indonesia
- Lanco Infratech Ltd - India
- Coastal Gujarat Power Limited - India
- Ministry of Finance - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Central Electricity Authority - India
- Minerals Council of Australia
- Rashtriya Ispat Nigam Limited - India
- Energy Link Ltd, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Deloitte Consulting - India
- Indian Energy Exchange, India
- Borneo Indobara - Indonesia
- IEA Clean Coal Centre - UK
- Indonesian Coal Mining Association
- Tamil Nadu electricity Board
- Marubeni Corporation - India
- Kaltim Prima Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Meralco Power Generation, Philippines
- Economic Council, Georgia
- London Commodity Brokers - England
- Gujarat Sidhee Cement - India
- Indogreen Group - Indonesia
- Bulk Trading Sa - Switzerland
- Eastern Energy - Thailand
- Ministry of Mines - Canada
- Thai Mozambique Logistica
- Bangladesh Power Developement Board
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Thiess Contractors Indonesia
- Eastern Coal Council - USA
- SMG Consultants - Indonesia
- CIMB Investment Bank - Malaysia
- Energy Development Corp, Philippines
- TeaM Sual Corporation - Philippines
- Makarim & Taira - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- McConnell Dowell - Australia
- Therma Luzon, Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Cement Manufacturers Association - India
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