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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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Monday, 15 January 18
QUEENSLAND SHIPPED 210.8 MT OF COAL IN 2017, DOWN 5% YOY QUEENSLAND RESOURCES COUNCIL
Queensland's coal exports over the 12 months reached 210.8 mt which is down 10 mt or 5 per cent from the previous year’s record of 220.8 ...
Thursday, 11 January 18
SUPRAMAX: INDO TO CHINA COAL ROUNDS FIXING AT AROUND $10K - FEARNLEYS
Supramax
USG rates improved both for backhaul and fronthaul, Ultras from USG to Japan receiving around $26k daily while supras 1-2k less for same ...
Wednesday, 10 January 18
2018: IT IS PROJECTED, THE SHIPBUILDERS WILL DELIVER FOUR HUNDRED FORTY NEW VESSELS IN 2018
Headlines from IMF's 2017 – World Economic Outlook:
January 2017 - “After a lacklustre outturn in 2016, economic activity is p ...
Tuesday, 09 January 18
INDONESIAN GOVERNMENT DECLARED COAL REFERENCE PRICE UP IN JANUARY
COALspot.com: the Indonesian Coal Price Reference ( HBA) rose 1.60 per cent in January 2018, the latest ministerial decree showed.
The benchma ...
Friday, 05 January 18
U.S. WEEKLY COAL OUTPUT FELL 32.4% PER CENT WEEK OVER WEEK, SAYS EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 10.5 million short tons ...
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- Directorate Of Revenue Intelligence - India
- Vijayanagar Sugar Pvt Ltd - India
- Rio Tinto Coal - Australia
- PTC India Limited - India
- Merrill Lynch Commodities Europe
- Meralco Power Generation, Philippines
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- Marubeni Corporation - India
- Iligan Light & Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Trasteel International SA, Italy
- South Luzon Thermal Energy Corporation
- Uttam Galva Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Metalloyd Limited - United Kingdom
- Larsen & Toubro Limited - India
- Orica Australia Pty. Ltd.
- Australian Coal Association
- Renaissance Capital - South Africa
- Sinarmas Energy and Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kohat Cement Company Ltd. - Pakistan
- Maheswari Brothers Coal Limited - India
- Thiess Contractors Indonesia
- Indian Oil Corporation Limited
- Ceylon Electricity Board - Sri Lanka
- SMG Consultants - Indonesia
- Banpu Public Company Limited - Thailand
- Chamber of Mines of South Africa
- Ind-Barath Power Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Eastern Coal Council - USA
- Bhushan Steel Limited - India
- VISA Power Limited - India
- Kideco Jaya Agung - Indonesia
- Oldendorff Carriers - Singapore
- Leighton Contractors Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
- International Coal Ventures Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- SN Aboitiz Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Ministry of Transport, Egypt
- Kumho Petrochemical, South Korea
- Baramulti Group, Indonesia
- Cement Manufacturers Association - India
- SMC Global Power, Philippines
- Edison Trading Spa - Italy
- Bulk Trading Sa - Switzerland
- Semirara Mining Corp, Philippines
- Makarim & Taira - Indonesia
- PNOC Exploration Corporation - Philippines
- Electricity Authority, New Zealand
- Bangladesh Power Developement Board
- Africa Commodities Group - South Africa
- Global Coal Blending Company Limited - Australia
- Standard Chartered Bank - UAE
- GN Power Mariveles Coal Plant, Philippines
- Carbofer General Trading SA - India
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
- Medco Energi Mining Internasional
- Wilmar Investment Holdings
- Singapore Mercantile Exchange
- IHS Mccloskey Coal Group - USA
- White Energy Company Limited
- Parry Sugars Refinery, India
- Bukit Baiduri Energy - Indonesia
- Essar Steel Hazira Ltd - India
- TeaM Sual Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Altura Mining Limited, Indonesia
- Energy Link Ltd, New Zealand
- Posco Energy - South Korea
- GMR Energy Limited - India
- Economic Council, Georgia
- Indo Tambangraya Megah - Indonesia
- Gujarat Sidhee Cement - India
- Attock Cement Pakistan Limited
- Romanian Commodities Exchange
- Rashtriya Ispat Nigam Limited - India
- London Commodity Brokers - England
- Kalimantan Lumbung Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Minerals Council of Australia
- Planning Commission, India
- Wood Mackenzie - Singapore
- Bayan Resources Tbk. - Indonesia
- The Treasury - Australian Government
- Petrochimia International Co. Ltd.- Taiwan
- Therma Luzon, Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indogreen Group - Indonesia
- Heidelberg Cement - Germany
- Maharashtra Electricity Regulatory Commission - India
- Sakthi Sugars Limited - India
- Siam City Cement - Thailand
- Miang Besar Coal Terminal - Indonesia
- McConnell Dowell - Australia
- Intertek Mineral Services - Indonesia
- Tamil Nadu electricity Board
- ICICI Bank Limited - India
- Kapuas Tunggal Persada - Indonesia
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- Deloitte Consulting - India
- CNBM International Corporation - China
- Savvy Resources Ltd - HongKong
- GVK Power & Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Billiton Holdings Pty Ltd - Australia
- Indian Energy Exchange, India
- Kaltim Prima Coal - Indonesia
- Latin American Coal - Colombia
- IEA Clean Coal Centre - UK
- TNB Fuel Sdn Bhd - Malaysia
- Grasim Industreis Ltd - India
- Ministry of Mines - Canada
- Bhatia International Limited - India
- Aditya Birla Group - India
- Indonesian Coal Mining Association
- Bhoruka Overseas - Indonesia
- Barasentosa Lestari - Indonesia
- Vedanta Resources Plc - India
- Mintek Dendrill Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Dalmia Cement Bharat India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Price Waterhouse Coopers - Russia
- Gujarat Mineral Development Corp Ltd - India
- Samtan Co., Ltd - South Korea
- Madhucon Powers Ltd - India
- Sindya Power Generating Company Private Ltd
- Star Paper Mills Limited - India
- Krishnapatnam Port Company Ltd. - India
- Gujarat Electricity Regulatory Commission - India
- MS Steel International - UAE
- Vizag Seaport Private Limited - India
- Port Waratah Coal Services - Australia
- Bukit Makmur.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- Georgia Ports Authority, United States
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Tata Chemicals Ltd - India
- Goldman Sachs - Singapore
- Agrawal Coal Company - India
- Coastal Gujarat Power Limited - India
- Indika Energy - Indonesia
- Ministry of Finance - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- Mercator Lines Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Manunggal Multi Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coalindo Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Formosa Plastics Group - Taiwan
- Ambuja Cements Ltd - India
- Siam City Cement PLC, Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Borneo Indobara - Indonesia
- Lanco Infratech Ltd - India
- The University of Queensland
- Coal and Oil Company - UAE
- Globalindo Alam Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- The State Trading Corporation of India Ltd
- ASAPP Information Group - India
- Karaikal Port Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Jindal Steel & Power Ltd - India
- Aboitiz Power Corporation - Philippines
- Electricity Generating Authority of Thailand
- Mercuria Energy - Indonesia
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- GAC Shipping (India) Pvt Ltd
- Xindia Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
- Commonwealth Bank - Australia
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Independent Power Producers Association of India
- Binh Thuan Hamico - Vietnam
- Parliament of New Zealand
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- Petron Corporation, Philippines
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- Antam Resourcindo - Indonesia
- Global Business Power Corporation, Philippines
- Interocean Group of Companies - India
- Orica Mining Services - Indonesia
- Eastern Energy - Thailand
- Kobexindo Tractors - Indoneisa
- San Jose City I Power Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- PowerSource Philippines DevCo
- Energy Development Corp, Philippines
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