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