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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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Friday, 17 August 18
MALAYSIA'S MANJUNG 4 - WORLD COAL ASSOCIATION
According to the IEA’s Energy Access Outlook 2017 report, nearly all of those who gained access to electricity worldwide in the last 16 years ...
Thursday, 16 August 18
COAL PRODUCTION AT 37.11 PERCENT OF FULL-YEAR TARGET - THE JAKARTA POST
Indonesian coal production was recorded at 180 million tons on Wednesday, or 37.11 percent of the government’s 485 million target this year.
...
Thursday, 16 August 18
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Tuesday, 14 August 18
THE CAPESIZE MARKET HAS SHOWN A TREMENDOUS COURSE DURING THE PAST 12 MONTHS - THOMAS CHASAPIS
The Capesize market has shown a tremendous course during the past 12 months, having quickly climbed out of the “hole that it had found itself ...
Monday, 13 August 18
A 50,200 DWT FIXED DELIVERY SINGAPORE TRIP VIA INDONESIA REDELIVERY CHINA IN THE LOW $10,000S - THE BALTIC BRIEFING
Capesize
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- Toyota Tsusho Corporation, Japan
- Latin American Coal - Colombia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- TeaM Sual Corporation - Philippines
- Mercator Lines Limited - India
- Commonwealth Bank - Australia
- Gujarat Mineral Development Corp Ltd - India
- Kepco SPC Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Krishnapatnam Port Company Ltd. - India
- Edison Trading Spa - Italy
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Carbofer General Trading SA - India
- Ministry of Finance - Indonesia
- Australian Coal Association
- Neyveli Lignite Corporation Ltd, - India
- IEA Clean Coal Centre - UK
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Alfred C Toepfer International GmbH - Germany
- Sindya Power Generating Company Private Ltd
- Mercuria Energy - Indonesia
- MS Steel International - UAE
- The State Trading Corporation of India Ltd
- Kartika Selabumi Mining - Indonesia
- McConnell Dowell - Australia
- Eastern Energy - Thailand
- Petron Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Africa Commodities Group - South Africa
- Salva Resources Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Indika Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Georgia Ports Authority, United States
- Trasteel International SA, Italy
- London Commodity Brokers - England
- Iligan Light & Power Inc, Philippines
- Indian Oil Corporation Limited
- TNB Fuel Sdn Bhd - Malaysia
- OPG Power Generation Pvt Ltd - India
- Eastern Coal Council - USA
- Semirara Mining Corp, Philippines
- PowerSource Philippines DevCo
- Parry Sugars Refinery, India
- GN Power Mariveles Coal Plant, Philippines
- International Coal Ventures Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Bahari Cakrawala Sebuku - Indonesia
- Manunggal Multi Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Essar Steel Hazira Ltd - India
- Tamil Nadu electricity Board
- Samtan Co., Ltd - South Korea
- Billiton Holdings Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Marubeni Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Ministry of Transport, Egypt
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meralco Power Generation, Philippines
- ICICI Bank Limited - India
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- Malabar Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- Vizag Seaport Private Limited - India
- Videocon Industries ltd - India
- Planning Commission, India
- Altura Mining Limited, Indonesia
- Ministry of Mines - Canada
- Asmin Koalindo Tuhup - Indonesia
- Directorate Of Revenue Intelligence - India
- Energy Development Corp, Philippines
- Coastal Gujarat Power Limited - India
- Mjunction Services Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Standard Chartered Bank - UAE
- Global Coal Blending Company Limited - Australia
- Petrochimia International Co. Ltd.- Taiwan
- India Bulls Power Limited - India
- CNBM International Corporation - China
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- Antam Resourcindo - Indonesia
- Makarim & Taira - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- Barasentosa Lestari - Indonesia
- Riau Bara Harum - Indonesia
- SMG Consultants - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Indo Tambangraya Megah - Indonesia
- Jaiprakash Power Ventures ltd
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- Independent Power Producers Association of India
- Bangladesh Power Developement Board
- Wilmar Investment Holdings
- AsiaOL BioFuels Corp., Philippines
- Cement Manufacturers Association - India
- The Treasury - Australian Government
- Rio Tinto Coal - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Bharathi Cement Corporation - India
- Attock Cement Pakistan Limited
- Central Electricity Authority - India
- Singapore Mercantile Exchange
- Mintek Dendrill Indonesia
- Straits Asia Resources Limited - Singapore
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Miang Besar Coal Terminal - Indonesia
- Australian Commodity Traders Exchange
- Sarangani Energy Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Indian Energy Exchange, India
- Ind-Barath Power Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Baramulti Group, Indonesia
- New Zealand Coal & Carbon
- Chamber of Mines of South Africa
- Port Waratah Coal Services - Australia
- Merrill Lynch Commodities Europe
- Thiess Contractors Indonesia
- Kumho Petrochemical, South Korea
- Timah Investasi Mineral - Indoneisa
- Meenaskhi Energy Private Limited - India
- Anglo American - United Kingdom
- San Jose City I Power Corp, Philippines
- ASAPP Information Group - India
- Deloitte Consulting - India
- Interocean Group of Companies - India
- Lanco Infratech Ltd - India
- Banpu Public Company Limited - Thailand
- GMR Energy Limited - India
- Kaltim Prima Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Central Java Power - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Goldman Sachs - Singapore
- Sree Jayajothi Cements Limited - India
- Agrawal Coal Company - India
- VISA Power Limited - India
- Indogreen Group - Indonesia
- Power Finance Corporation Ltd., India
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- Leighton Contractors Pty Ltd - Australia
- Parliament of New Zealand
- Globalindo Alam Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Heidelberg Cement - Germany
- Uttam Galva Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Larsen & Toubro Limited - India
- European Bulk Services B.V. - Netherlands
- Star Paper Mills Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Sojitz Corporation - Japan
- Bhatia International Limited - India
- Therma Luzon, Inc, Philippines
- Bhushan Steel Limited - India
- Orica Mining Services - Indonesia
- Kobexindo Tractors - Indoneisa
- LBH Netherlands Bv - Netherlands
- Dalmia Cement Bharat India
- Global Business Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Minerals Council of Australia
- White Energy Company Limited
- Madhucon Powers Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Thai Mozambique Logistica
- Simpson Spence & Young - Indonesia
- Ambuja Cements Ltd - India
- The University of Queensland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Asam (Persero) Tbk - Indonesia
- Xindia Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Jindal Steel & Power Ltd - India
- South Luzon Thermal Energy Corporation
- Coal and Oil Company - UAE
- Bukit Baiduri Energy - Indonesia
- Renaissance Capital - South Africa
- Coalindo Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Sical Logistics Limited - India
- Cigading International Bulk Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Siam City Cement - Thailand
- Economic Council, Georgia
- SN Aboitiz Power Inc, Philippines
- Wood Mackenzie - Singapore
- Energy Link Ltd, New Zealand
- Bulk Trading Sa - Switzerland
- CIMB Investment Bank - Malaysia
- Aboitiz Power Corporation - Philippines
- Borneo Indobara - Indonesia
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