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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, 20 April 17
CHINA'S IMPORT OF IRON ORE TO PROPEL DRY BULK SHIPPING DEMAND IN 2017 - PETER SAND
China's import of iron ore will continue to be a key driver for the demand growth in 2017 for the dry bulk shipping industry, alongside shippin ...
Monday, 17 April 17
THE PANAMAX INDEX (BPI) ROSE (12.89%) WEEK OVER WEEK
COALspot.com: The Freight market was firm, week over a week as all segments show a positive upward trend this past week.
The Baltic Exchange, ...
Monday, 17 April 17
U.S. WEEKLY COAL OUTPUT FELL 5% WEEK OVER WEEK - EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 13.8 million short tons ...
Thursday, 13 April 17
OPEC OVER-DELIVERS ON OIL CUTS, BUT SEES RIVALS' OUTPUT RISING
Crude Oil Price Movements
The OPEC Reference Basket averaged $50.32/b in March, representing a decline of 5.7% from the previous month. Crude fut ...
Wednesday, 12 April 17
THE PORT OF NEWCASTLE SHIPPED 13.791 MILLION TONS OF COAL IN MARCH 2017
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export ports has shipped $AU 1,688.5 ...
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- Energy Link Ltd, New Zealand
- Indika Energy - Indonesia
- Gujarat Sidhee Cement - India
- Simpson Spence & Young - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kepco SPC Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meralco Power Generation, Philippines
- Standard Chartered Bank - UAE
- Gujarat Electricity Regulatory Commission - India
- Kaltim Prima Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- OPG Power Generation Pvt Ltd - India
- Minerals Council of Australia
- Agrawal Coal Company - India
- Price Waterhouse Coopers - Russia
- Karbindo Abesyapradhi - Indoneisa
- IEA Clean Coal Centre - UK
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Coal and Oil Company - UAE
- Eastern Coal Council - USA
- Aditya Birla Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Development Corp, Philippines
- Samtan Co., Ltd - South Korea
- Asmin Koalindo Tuhup - Indonesia
- The University of Queensland
- Malabar Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Banpu Public Company Limited - Thailand
- New Zealand Coal & Carbon
- Goldman Sachs - Singapore
- London Commodity Brokers - England
- Tata Chemicals Ltd - India
- Electricity Generating Authority of Thailand
- Globalindo Alam Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- India Bulls Power Limited - India
- Australian Commodity Traders Exchange
- Meenaskhi Energy Private Limited - India
- Petron Corporation, Philippines
- Mjunction Services Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Authority, New Zealand
- Binh Thuan Hamico - Vietnam
- LBH Netherlands Bv - Netherlands
- Ind-Barath Power Infra Limited - India
- Planning Commission, India
- Siam City Cement PLC, Thailand
- PowerSource Philippines DevCo
- Romanian Commodities Exchange
- Uttam Galva Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Salva Resources Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- PNOC Exploration Corporation - Philippines
- Baramulti Group, Indonesia
- Bharathi Cement Corporation - India
- Renaissance Capital - South Africa
- Indogreen Group - Indonesia
- Central Electricity Authority - India
- Ceylon Electricity Board - Sri Lanka
- Kideco Jaya Agung - Indonesia
- IHS Mccloskey Coal Group - USA
- Madhucon Powers Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Orica Australia Pty. Ltd.
- Eastern Energy - Thailand
- Australian Coal Association
- Siam City Cement - Thailand
- Parry Sugars Refinery, India
- Kumho Petrochemical, South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Edison Trading Spa - Italy
- Intertek Mineral Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Singapore Mercantile Exchange
- Parliament of New Zealand
- Leighton Contractors Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- VISA Power Limited - India
- Semirara Mining Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Savvy Resources Ltd - HongKong
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- TeaM Sual Corporation - Philippines
- Carbofer General Trading SA - India
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Vizag Seaport Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- White Energy Company Limited
- GVK Power & Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Mercuria Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Wilmar Investment Holdings
- Rio Tinto Coal - Australia
- Jindal Steel & Power Ltd - India
- Attock Cement Pakistan Limited
- AsiaOL BioFuels Corp., Philippines
- Karaikal Port Pvt Ltd - India
- Independent Power Producers Association of India
- Star Paper Mills Limited - India
- Bangladesh Power Developement Board
- The Treasury - Australian Government
- Sindya Power Generating Company Private Ltd
- Borneo Indobara - Indonesia
- Bulk Trading Sa - Switzerland
- MS Steel International - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Medco Energi Mining Internasional
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- Coastal Gujarat Power Limited - India
- Larsen & Toubro Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Makmur.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Billiton Holdings Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Sojitz Corporation - Japan
- Bhoruka Overseas - Indonesia
- Makarim & Taira - Indonesia
- The State Trading Corporation of India Ltd
- Semirara Mining and Power Corporation, Philippines
- Thai Mozambique Logistica
- Economic Council, Georgia
- PTC India Limited - India
- ASAPP Information Group - India
- Global Business Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- CIMB Investment Bank - Malaysia
- Bhushan Steel Limited - India
- Krishnapatnam Port Company Ltd. - India
- Oldendorff Carriers - Singapore
- Indonesian Coal Mining Association
- Chettinad Cement Corporation Ltd - India
- Cement Manufacturers Association - India
- Iligan Light & Power Inc, Philippines
- Orica Mining Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Deloitte Consulting - India
- Barasentosa Lestari - Indonesia
- Anglo American - United Kingdom
- Trasteel International SA, Italy
- SN Aboitiz Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ambuja Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Thiess Contractors Indonesia
- Wood Mackenzie - Singapore
- SMC Global Power, Philippines
- Ministry of Transport, Egypt
- Commonwealth Bank - Australia
- Miang Besar Coal Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Rashtriya Ispat Nigam Limited - India
- GMR Energy Limited - India
- CNBM International Corporation - China
- GN Power Mariveles Coal Plant, Philippines
- Indian Oil Corporation Limited
- Sarangani Energy Corporation, Philippines
- Mercator Lines Limited - India
- Videocon Industries ltd - India
- Merrill Lynch Commodities Europe
- Posco Energy - South Korea
- Sakthi Sugars Limited - India
- Timah Investasi Mineral - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Lanco Infratech Ltd - India
- Sree Jayajothi Cements Limited - India
- Riau Bara Harum - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Central Java Power - Indonesia
- Africa Commodities Group - South Africa
- GAC Shipping (India) Pvt Ltd
- Formosa Plastics Group - Taiwan
- Heidelberg Cement - Germany
- Grasim Industreis Ltd - India
- Power Finance Corporation Ltd., India
- Mintek Dendrill Indonesia
- Therma Luzon, Inc, Philippines
- Vedanta Resources Plc - India
- ICICI Bank Limited - India
- Maheswari Brothers Coal Limited - India
- Marubeni Corporation - India
- Ministry of Mines - Canada
- Xindia Steels Limited - India
- SMG Consultants - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- European Bulk Services B.V. - Netherlands
- Georgia Ports Authority, United States
- Manunggal Multi Energi - Indonesia
- McConnell Dowell - Australia
- Coalindo Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Tamil Nadu electricity Board
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- Kobexindo Tractors - Indoneisa
- Ministry of Finance - Indonesia
- Chamber of Mines of South Africa
- Aboitiz Power Corporation - Philippines
- Altura Mining Limited, Indonesia
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