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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, 28 April 17
U.S PRODUCED LESS COAL THIS PAST WEEK COMPARED TO THE PREVIOUS WEEK - EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 14 million short tons ( ...
Friday, 28 April 17
DELTA DUNIA RECORDED $24 MILLION NET PROFIT FOR FIRST QUARTER OF 2017; UP 700% Y/Y
COALspot.com: PT Delta Dunia Makmur Tbk. has announced its financial results for the first quarter of 2017 yesterday. According to the ...
Thursday, 27 April 17
PACIFIC IS SOFTENING WITH MORE TONNAGE OPENING AND LESS COAL ORDERS AROUND - FEARNLEYS
Supramax
Relatively slow week, with both basins showing signs of cooling down. Although grain cargoes out ECSA and ECCA on Ultras still delivered ...
Wednesday, 26 April 17
IRON ORE PRICES HAVE BEEN ON A ROLLERCOASTER RIDE OVER THE LAST MONTH - CHRISTOPHER WHITTY
Iron ore prices have been on a rollercoaster ride over the last month. Prices started the year on a very positive note, surging up to their highest ...
Tuesday, 25 April 17
FIONA POUNDS: VALID TENDER OF NOTICE OF READINESS
KNOWLEDGE TO ELEVATE
In the recent English High Court case of MV Arundel Castle1, the Judge ruled that a vessel, that could not immediately pr ...
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- Thiess Contractors Indonesia
- Miang Besar Coal Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bayan Resources Tbk. - Indonesia
- Wood Mackenzie - Singapore
- Independent Power Producers Association of India
- Directorate Of Revenue Intelligence - India
- Pipit Mutiara Jaya. PT, Indonesia
- Star Paper Mills Limited - India
- Deloitte Consulting - India
- Barasentosa Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- Orica Australia Pty. Ltd.
- Uttam Galva Steels Limited - India
- Antam Resourcindo - Indonesia
- Banpu Public Company Limited - Thailand
- The University of Queensland
- Malabar Cements Ltd - India
- Bulk Trading Sa - Switzerland
- VISA Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Savvy Resources Ltd - HongKong
- Kapuas Tunggal Persada - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Oldendorff Carriers - Singapore
- Meenaskhi Energy Private Limited - India
- Mercuria Energy - Indonesia
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- Kobexindo Tractors - Indoneisa
- GVK Power & Infra Limited - India
- Heidelberg Cement - Germany
- Therma Luzon, Inc, Philippines
- Electricity Generating Authority of Thailand
- Parry Sugars Refinery, India
- Georgia Ports Authority, United States
- Eastern Energy - Thailand
- ICICI Bank Limited - India
- Power Finance Corporation Ltd., India
- Indonesian Coal Mining Association
- Petron Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Aboitiz Power Corporation - Philippines
- MS Steel International - UAE
- Anglo American - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Indian Energy Exchange, India
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Videocon Industries ltd - India
- Kumho Petrochemical, South Korea
- SMC Global Power, Philippines
- Essar Steel Hazira Ltd - India
- Kaltim Prima Coal - Indonesia
- PTC India Limited - India
- Dalmia Cement Bharat India
- Siam City Cement - Thailand
- Altura Mining Limited, Indonesia
- Global Business Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Posco Energy - South Korea
- Agrawal Coal Company - India
- Bhoruka Overseas - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- AsiaOL BioFuels Corp., Philippines
- Straits Asia Resources Limited - Singapore
- CNBM International Corporation - China
- Larsen & Toubro Limited - India
- LBH Netherlands Bv - Netherlands
- Coastal Gujarat Power Limited - India
- Global Coal Blending Company Limited - Australia
- Asmin Koalindo Tuhup - Indonesia
- SMG Consultants - Indonesia
- Bukit Baiduri Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Romanian Commodities Exchange
- Sakthi Sugars Limited - India
- European Bulk Services B.V. - Netherlands
- Carbofer General Trading SA - India
- Bangladesh Power Developement Board
- Indo Tambangraya Megah - Indonesia
- Central Java Power - Indonesia
- Makarim & Taira - Indonesia
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Sree Jayajothi Cements Limited - India
- Siam City Cement PLC, Thailand
- Formosa Plastics Group - Taiwan
- Price Waterhouse Coopers - Russia
- Eastern Coal Council - USA
- Simpson Spence & Young - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Authority, New Zealand
- Sojitz Corporation - Japan
- Vijayanagar Sugar Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Chettinad Cement Corporation Ltd - India
- Global Green Power PLC Corporation, Philippines
- Edison Trading Spa - Italy
- Energy Development Corp, Philippines
- Thai Mozambique Logistica
- CIMB Investment Bank - Malaysia
- Binh Thuan Hamico - Vietnam
- Medco Energi Mining Internasional
- Borneo Indobara - Indonesia
- Metalloyd Limited - United Kingdom
- Tata Chemicals Ltd - India
- Orica Mining Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Bhushan Steel Limited - India
- Gujarat Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Ministry of Mines - Canada
- London Commodity Brokers - England
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- Rio Tinto Coal - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indogreen Group - Indonesia
- Planning Commission, India
- Xindia Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- South Luzon Thermal Energy Corporation
- San Jose City I Power Corp, Philippines
- Baramulti Group, Indonesia
- Riau Bara Harum - Indonesia
- PNOC Exploration Corporation - Philippines
- Sical Logistics Limited - India
- Interocean Group of Companies - India
- Salva Resources Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Bhatia International Limited - India
- Maheswari Brothers Coal Limited - India
- OPG Power Generation Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Vedanta Resources Plc - India
- Ambuja Cements Ltd - India
- Commonwealth Bank - Australia
- Bharathi Cement Corporation - India
- Chamber of Mines of South Africa
- Petrochimia International Co. Ltd.- Taiwan
- India Bulls Power Limited - India
- Bukit Makmur.PT - Indonesia
- Central Electricity Authority - India
- Leighton Contractors Pty Ltd - Australia
- The Treasury - Australian Government
- Samtan Co., Ltd - South Korea
- Australian Coal Association
- Grasim Industreis Ltd - India
- Mjunction Services Limited - India
- International Coal Ventures Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Australian Commodity Traders Exchange
- Trasteel International SA, Italy
- Economic Council, Georgia
- Ind-Barath Power Infra Limited - India
- Goldman Sachs - Singapore
- Sarangani Energy Corporation, Philippines
- Ministry of Transport, Egypt
- Attock Cement Pakistan Limited
- IEA Clean Coal Centre - UK
- Indika Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- TeaM Sual Corporation - Philippines
- Lanco Infratech Ltd - India
- Tamil Nadu electricity Board
- Sindya Power Generating Company Private Ltd
- ASAPP Information Group - India
- Aditya Birla Group - India
- Vizag Seaport Private Limited - India
- Latin American Coal - Colombia
- Kohat Cement Company Ltd. - Pakistan
- Kepco SPC Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Karaikal Port Pvt Ltd - India
- New Zealand Coal & Carbon
- McConnell Dowell - Australia
- Iligan Light & Power Inc, Philippines
- Wilmar Investment Holdings
- Semirara Mining and Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Merrill Lynch Commodities Europe
- Manunggal Multi Energi - Indonesia
- Renaissance Capital - South Africa
- PowerSource Philippines DevCo
- Holcim Trading Pte Ltd - Singapore
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- Marubeni Corporation - India
- Coalindo Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parliament of New Zealand
- Energy Link Ltd, New Zealand
- Mintek Dendrill Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Mercator Lines Limited - India
- Singapore Mercantile Exchange
- Globalindo Alam Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Indian Oil Corporation Limited
- Cement Manufacturers Association - India
- Africa Commodities Group - South Africa
- Kartika Selabumi Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Gujarat Sidhee Cement - India
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