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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, 22 November 18
SHUT OUT OF CHINA, U.S. COAL EXPORTERS FIND FAVOUR IN INDIA, FOR NOW - REUTERS
U.S. coal exporters have effectively lost a promising market in China since the imposition of tariffs as part of the ongoing trade dispute, but so ...
Wednesday, 21 November 18
SHIPPING MARKET INSIGHT - DIMITRIS KOURTESIS
Halfway through the fourth and last quarter of the year, we spot a significant change in freight rates for tankers trading dirty, as well as on the ...
Tuesday, 20 November 18
FREIGHT RATES IN THE CRUDE OIL MARKET HAVE ALREADY PICKED UP OVER THE PAST COUPLE OF WEEKS - YIANNIS VAMVAKAS
Current geopolitical developments between Iran and the US, which have led the latter to re-impose its sanctions, have significantly affected oil pr ...
Tuesday, 20 November 18
GOLDEN ENERGY AND RESOURCES LEADS A$249M BID FOR AUSTRALIA-LISTED STANMORE COAL - THE STRAITS TIMES
Singapore-listed Golden Energy and Resources (GEAR) is leading deals worth up to A$249 million (S$250 million) to acquire Australia-listed Stanmore ...
Monday, 19 November 18
INDONESIA'S LEADING EIGHT COAL MINER'S COAL MINING CONTRACTS ARE EXPECTED TO EXPIRE BETWEEN YEAR 2019 - 2025
The Ministry of Energy and Mineral Resources (ESDM) said, eight Coal Contract of Works (CCoW) will expected to expire between 2019 to 2026, Liputan ...
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- Holcim Trading Pte Ltd - Singapore
- Parliament of New Zealand
- Larsen & Toubro Limited - India
- Minerals Council of Australia
- CIMB Investment Bank - Malaysia
- Semirara Mining Corp, Philippines
- Grasim Industreis Ltd - India
- MS Steel International - UAE
- London Commodity Brokers - England
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- Meralco Power Generation, Philippines
- Medco Energi Mining Internasional
- Orica Mining Services - Indonesia
- Orica Australia Pty. Ltd.
- Latin American Coal - Colombia
- Pendopo Energi Batubara - Indonesia
- SMC Global Power, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Bhushan Steel Limited - India
- Indonesian Coal Mining Association
- Coal and Oil Company - UAE
- Indo Tambangraya Megah - Indonesia
- Kaltim Prima Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Jaiprakash Power Ventures ltd
- Sojitz Corporation - Japan
- Bangladesh Power Developement Board
- Sree Jayajothi Cements Limited - India
- Bhoruka Overseas - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Mercator Lines Limited - India
- Mintek Dendrill Indonesia
- New Zealand Coal & Carbon
- Savvy Resources Ltd - HongKong
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Banpu Public Company Limited - Thailand
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Heidelberg Cement - Germany
- Essar Steel Hazira Ltd - India
- Wilmar Investment Holdings
- LBH Netherlands Bv - Netherlands
- OPG Power Generation Pvt Ltd - India
- Eastern Coal Council - USA
- Barasentosa Lestari - Indonesia
- Central Java Power - Indonesia
- Marubeni Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Mines - Canada
- Miang Besar Coal Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Coal Blending Company Limited - Australia
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Xindia Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Vedanta Resources Plc - India
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Finance - Indonesia
- Toyota Tsusho Corporation, Japan
- Agrawal Coal Company - India
- Malabar Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Makarim & Taira - Indonesia
- Economic Council, Georgia
- Parry Sugars Refinery, India
- Uttam Galva Steels Limited - India
- Dalmia Cement Bharat India
- Oldendorff Carriers - Singapore
- Goldman Sachs - Singapore
- Central Electricity Authority - India
- Bukit Asam (Persero) Tbk - Indonesia
- Commonwealth Bank - Australia
- SMG Consultants - Indonesia
- Standard Chartered Bank - UAE
- Straits Asia Resources Limited - Singapore
- VISA Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Chamber of Mines of South Africa
- Coastal Gujarat Power Limited - India
- Energy Link Ltd, New Zealand
- Videocon Industries ltd - India
- Sical Logistics Limited - India
- Ceylon Electricity Board - Sri Lanka
- Interocean Group of Companies - India
- Maheswari Brothers Coal Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- Borneo Indobara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhatia International Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Business Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- GAC Shipping (India) Pvt Ltd
- Ind-Barath Power Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Posco Energy - South Korea
- Jindal Steel & Power Ltd - India
- IEA Clean Coal Centre - UK
- Kumho Petrochemical, South Korea
- Samtan Co., Ltd - South Korea
- Salva Resources Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Sindya Power Generating Company Private Ltd
- Gujarat Sidhee Cement - India
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
- Lanco Infratech Ltd - India
- Energy Development Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Aditya Birla Group - India
- Therma Luzon, Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Singapore Mercantile Exchange
- Africa Commodities Group - South Africa
- SN Aboitiz Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Bayan Resources Tbk. - Indonesia
- Mjunction Services Limited - India
- Mercuria Energy - Indonesia
- Tata Chemicals Ltd - India
- Australian Coal Association
- Tamil Nadu electricity Board
- Indian Oil Corporation Limited
- Baramulti Group, Indonesia
- Electricity Authority, New Zealand
- The State Trading Corporation of India Ltd
- The University of Queensland
- Renaissance Capital - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Binh Thuan Hamico - Vietnam
- Vizag Seaport Private Limited - India
- Electricity Generating Authority of Thailand
- Star Paper Mills Limited - India
- Petron Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- ASAPP Information Group - India
- TeaM Sual Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Edison Trading Spa - Italy
- Carbofer General Trading SA - India
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Indogreen Group - Indonesia
- Directorate Of Revenue Intelligence - India
- Thai Mozambique Logistica
- South Luzon Thermal Energy Corporation
- Romanian Commodities Exchange
- PNOC Exploration Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Wood Mackenzie - Singapore
- Cement Manufacturers Association - India
- Anglo American - United Kingdom
- Ambuja Cements Ltd - India
- Siam City Cement - Thailand
- Kapuas Tunggal Persada - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rio Tinto Coal - Australia
- Independent Power Producers Association of India
- Siam City Cement PLC, Thailand
- European Bulk Services B.V. - Netherlands
- Bharathi Cement Corporation - India
- Coalindo Energy - Indonesia
- Merrill Lynch Commodities Europe
- Madhucon Powers Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- PTC India Limited - India
- GVK Power & Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- Indika Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- Kohat Cement Company Ltd. - Pakistan
- Eastern Energy - Thailand
- Kepco SPC Power Corporation, Philippines
- McConnell Dowell - Australia
- Ministry of Transport, Egypt
- Krishnapatnam Port Company Ltd. - India
- Planning Commission, India
- Rashtriya Ispat Nigam Limited - India
- International Coal Ventures Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Bulk Trading Sa - Switzerland
- Karbindo Abesyapradhi - Indoneisa
- Indian Energy Exchange, India
- GN Power Mariveles Coal Plant, Philippines
- India Bulls Power Limited - India
- Attock Cement Pakistan Limited
- Simpson Spence & Young - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Global Green Power PLC Corporation, Philippines
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