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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, 10 August 18
U.S. COAL PRODUCTION TO DECLINE BY 1.8% IN 2019 BECAUSE COAL EXPORTS AND COAL CONSUMPTION ARE BOTH FORECAST TO DECREASE - EIA
EIA forecasts U.S. coal production will decline by 1.1% to 766 million short tons (MMst) in 2018 despite a 5.7% (6 MMst) increase in coal exports.
...
Thursday, 09 August 18
RIO TINTO COMPLETES SALE OF REMAINING COAL ASSETS
Rio Tinto has completed the sale of its remaining coal assets in Queensland, Australia, for $3.95 billion.
According to a noted post ...
Wednesday, 08 August 18
CHINA DEMANDS PREMIUM IRON ORE, COAL; MINERS MIXED IMPACT - FITCH RATINGS
China’s stricter environmental regulations and structural changes in its steelmaking industry boosts ongoing demand for high-quality iron ore ...
Wednesday, 08 August 18
SHIPPING MARKET INSIGHT - CHRISTOPHER WHITTY
Singapore's shipyard business has evolved over the decades, from shipbuilding and repairs to rig building. It's now evolving again, to cate ...
Friday, 03 August 18
PHEW! ASIA, EUROPE HEATWAVE PUSHES AUSTRALIA COAL PRICES TO 6-YEAR HIGH: REUTERS
Australian thermal coal prices have hit fresh six-year highs as a heatwave across the northern hemisphere has triggered a spike in demand for coal- ...
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- Bukit Baiduri Energy - Indonesia
- Electricity Generating Authority of Thailand
- Parliament of New Zealand
- Timah Investasi Mineral - Indoneisa
- Simpson Spence & Young - Indonesia
- CIMB Investment Bank - Malaysia
- Indika Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Coal Association
- MS Steel International - UAE
- Jindal Steel & Power Ltd - India
- Kaltim Prima Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Economic Council, Georgia
- Pendopo Energi Batubara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sojitz Corporation - Japan
- Antam Resourcindo - Indonesia
- Orica Mining Services - Indonesia
- Sical Logistics Limited - India
- VISA Power Limited - India
- Bangladesh Power Developement Board
- Eastern Energy - Thailand
- Ministry of Mines - Canada
- Globalindo Alam Lestari - Indonesia
- Indian Energy Exchange, India
- Therma Luzon, Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- Tamil Nadu electricity Board
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- Manunggal Multi Energi - Indonesia
- Bhushan Steel Limited - India
- Wood Mackenzie - Singapore
- Coal and Oil Company - UAE
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- OPG Power Generation Pvt Ltd - India
- CNBM International Corporation - China
- Price Waterhouse Coopers - Russia
- Toyota Tsusho Corporation, Japan
- Neyveli Lignite Corporation Ltd, - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Sidhee Cement - India
- Renaissance Capital - South Africa
- Rashtriya Ispat Nigam Limited - India
- Xindia Steels Limited - India
- Interocean Group of Companies - India
- Sakthi Sugars Limited - India
- SN Aboitiz Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- New Zealand Coal & Carbon
- Petrochimia International Co. Ltd.- Taiwan
- Global Green Power PLC Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Star Paper Mills Limited - India
- Ambuja Cements Ltd - India
- Grasim Industreis Ltd - India
- Cigading International Bulk Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement PLC, Thailand
- IEA Clean Coal Centre - UK
- Bharathi Cement Corporation - India
- Orica Australia Pty. Ltd.
- Holcim Trading Pte Ltd - Singapore
- India Bulls Power Limited - India
- Savvy Resources Ltd - HongKong
- GAC Shipping (India) Pvt Ltd
- Kumho Petrochemical, South Korea
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- Larsen & Toubro Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Heidelberg Cement - Germany
- Australian Commodity Traders Exchange
- Central Java Power - Indonesia
- Global Coal Blending Company Limited - Australia
- Uttam Galva Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Africa Commodities Group - South Africa
- Indo Tambangraya Megah - Indonesia
- Attock Cement Pakistan Limited
- Posco Energy - South Korea
- ICICI Bank Limited - India
- London Commodity Brokers - England
- Borneo Indobara - Indonesia
- Aditya Birla Group - India
- McConnell Dowell - Australia
- GMR Energy Limited - India
- Thai Mozambique Logistica
- Lanco Infratech Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- PNOC Exploration Corporation - Philippines
- Vizag Seaport Private Limited - India
- PTC India Limited - India
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Madhucon Powers Ltd - India
- Indonesian Coal Mining Association
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Karbindo Abesyapradhi - Indoneisa
- GVK Power & Infra Limited - India
- Altura Mining Limited, Indonesia
- Mercator Lines Limited - India
- Oldendorff Carriers - Singapore
- Karaikal Port Pvt Ltd - India
- Indian Oil Corporation Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Krishnapatnam Port Company Ltd. - India
- Maheswari Brothers Coal Limited - India
- The University of Queensland
- Meralco Power Generation, Philippines
- Deloitte Consulting - India
- Bahari Cakrawala Sebuku - Indonesia
- Central Electricity Authority - India
- Minerals Council of Australia
- Formosa Plastics Group - Taiwan
- Romanian Commodities Exchange
- Cement Manufacturers Association - India
- The State Trading Corporation of India Ltd
- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- Straits Asia Resources Limited - Singapore
- Marubeni Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Chamber of Mines of South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Tata Chemicals Ltd - India
- Videocon Industries ltd - India
- Energy Development Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Agrawal Coal Company - India
- Mintek Dendrill Indonesia
- Independent Power Producers Association of India
- Mercuria Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Edison Trading Spa - Italy
- Makarim & Taira - Indonesia
- Sarangani Energy Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Meenaskhi Energy Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Goldman Sachs - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Baramulti Group, Indonesia
- San Jose City I Power Corp, Philippines
- Vedanta Resources Plc - India
- Ind-Barath Power Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Wilmar Investment Holdings
- Thiess Contractors Indonesia
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Siam City Cement - Thailand
- Jaiprakash Power Ventures ltd
- TeaM Sual Corporation - Philippines
- SMG Consultants - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Aboitiz Power Corporation - Philippines
- Planning Commission, India
- South Luzon Thermal Energy Corporation
- Bukit Makmur.PT - Indonesia
- Semirara Mining Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- AsiaOL BioFuels Corp., Philippines
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coastal Gujarat Power Limited - India
- Carbofer General Trading SA - India
- Trasteel International SA, Italy
- Standard Chartered Bank - UAE
- SMC Global Power, Philippines
- Malabar Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Merrill Lynch Commodities Europe
- Leighton Contractors Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Dalmia Cement Bharat India
- Singapore Mercantile Exchange
- International Coal Ventures Pvt Ltd - India
- Petron Corporation, Philippines
- Georgia Ports Authority, United States
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- Rio Tinto Coal - Australia
- Anglo American - United Kingdom
- Essar Steel Hazira Ltd - India
- Ministry of Finance - Indonesia
- Kartika Selabumi Mining - Indonesia
- Salva Resources Pvt Ltd - India
- The Treasury - Australian Government
- Coalindo Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
- Energy Link Ltd, New Zealand
- Bulk Trading Sa - Switzerland
- Medco Energi Mining Internasional
- Sinarmas Energy and Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- Parry Sugars Refinery, India
- Global Business Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- White Energy Company Limited
- Metalloyd Limited - United Kingdom
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