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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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- Tata Chemicals Ltd - India
- Ind-Barath Power Infra Limited - India
- Star Paper Mills Limited - India
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- Meralco Power Generation, Philippines
- Bangladesh Power Developement Board
- Metalloyd Limited - United Kingdom
- Thiess Contractors Indonesia
- Thai Mozambique Logistica
- Mercuria Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Parry Sugars Refinery, India
- Kalimantan Lumbung Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- London Commodity Brokers - England
- India Bulls Power Limited - India
- The State Trading Corporation of India Ltd
- Chettinad Cement Corporation Ltd - India
- Antam Resourcindo - Indonesia
- Binh Thuan Hamico - Vietnam
- South Luzon Thermal Energy Corporation
- Ministry of Mines - Canada
- Eastern Coal Council - USA
- Posco Energy - South Korea
- Renaissance Capital - South Africa
- Rio Tinto Coal - Australia
- International Coal Ventures Pvt Ltd - India
- Indian Oil Corporation Limited
- Romanian Commodities Exchange
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Oldendorff Carriers - Singapore
- McConnell Dowell - Australia
- Sarangani Energy Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Global Business Power Corporation, Philippines
- Singapore Mercantile Exchange
- Globalindo Alam Lestari - Indonesia
- White Energy Company Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Gujarat Sidhee Cement - India
- Semirara Mining and Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- ASAPP Information Group - India
- New Zealand Coal & Carbon
- Ministry of Transport, Egypt
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ICICI Bank Limited - India
- Goldman Sachs - Singapore
- Uttam Galva Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Makarim & Taira - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bulk Trading Sa - Switzerland
- Directorate Of Revenue Intelligence - India
- Indo Tambangraya Megah - Indonesia
- Australian Commodity Traders Exchange
- Wilmar Investment Holdings
- Neyveli Lignite Corporation Ltd, - India
- Minerals Council of Australia
- Australian Coal Association
- Bahari Cakrawala Sebuku - Indonesia
- Parliament of New Zealand
- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- Videocon Industries ltd - India
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- Karbindo Abesyapradhi - Indoneisa
- Trasteel International SA, Italy
- Manunggal Multi Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sakthi Sugars Limited - India
- Agrawal Coal Company - India
- Iligan Light & Power Inc, Philippines
- Cement Manufacturers Association - India
- San Jose City I Power Corp, Philippines
- Energy Development Corp, Philippines
- SMC Global Power, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- Dalmia Cement Bharat India
- PowerSource Philippines DevCo
- Carbofer General Trading SA - India
- GN Power Mariveles Coal Plant, Philippines
- Tamil Nadu electricity Board
- Intertek Mineral Services - Indonesia
- Heidelberg Cement - Germany
- Port Waratah Coal Services - Australia
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- Bhoruka Overseas - Indonesia
- TeaM Sual Corporation - Philippines
- Medco Energi Mining Internasional
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Barasentosa Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Alfred C Toepfer International GmbH - Germany
- Kumho Petrochemical, South Korea
- Bharathi Cement Corporation - India
- Global Green Power PLC Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Petrochimia International Co. Ltd.- Taiwan
- Energy Link Ltd, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Sree Jayajothi Cements Limited - India
- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kartika Selabumi Mining - Indonesia
- Electricity Authority, New Zealand
- Ambuja Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- VISA Power Limited - India
- IEA Clean Coal Centre - UK
- Coastal Gujarat Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Rashtriya Ispat Nigam Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Mintek Dendrill Indonesia
- Aditya Birla Group - India
- Central Electricity Authority - India
- Latin American Coal - Colombia
- Bukit Baiduri Energy - Indonesia
- Central Java Power - Indonesia
- Kobexindo Tractors - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- PTC India Limited - India
- Merrill Lynch Commodities Europe
- Siam City Cement PLC, Thailand
- Georgia Ports Authority, United States
- Salva Resources Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Attock Cement Pakistan Limited
- Banpu Public Company Limited - Thailand
- Edison Trading Spa - Italy
- GVK Power & Infra Limited - India
- The University of Queensland
- Riau Bara Harum - Indonesia
- Orica Australia Pty. Ltd.
- Asmin Koalindo Tuhup - Indonesia
- GAC Shipping (India) Pvt Ltd
- Kepco SPC Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Jorong Barutama Greston.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- Economic Council, Georgia
- Indonesian Coal Mining Association
- TNB Fuel Sdn Bhd - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Bhatia International Limited - India
- Jindal Steel & Power Ltd - India
- Orica Mining Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Anglo American - United Kingdom
- Borneo Indobara - Indonesia
- Xindia Steels Limited - India
- The Treasury - Australian Government
- Vizag Seaport Private Limited - India
- Essar Steel Hazira Ltd - India
- Malabar Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Interocean Group of Companies - India
- Indogreen Group - Indonesia
- Siam City Cement - Thailand
- CIMB Investment Bank - Malaysia
- Planning Commission, India
- Petron Corporation, Philippines
- Coal and Oil Company - UAE
- Ministry of Finance - Indonesia
- Savvy Resources Ltd - HongKong
- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
- Deloitte Consulting - India
- Therma Luzon, Inc, Philippines
- Bhushan Steel Limited - India
- Wood Mackenzie - Singapore
- Krishnapatnam Port Company Ltd. - India
- Lanco Infratech Ltd - India
- Chamber of Mines of South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Mjunction Services Limited - India
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- Larsen & Toubro Limited - India
- LBH Netherlands Bv - Netherlands
- Kideco Jaya Agung - Indonesia
- Timah Investasi Mineral - Indoneisa
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Kaltim Prima Coal - Indonesia
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Indika Energy - Indonesia
- SMG Consultants - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Vedanta Resources Plc - India
- MS Steel International - UAE
- Sojitz Corporation - Japan
- IHS Mccloskey Coal Group - USA
- Standard Chartered Bank - UAE
- AsiaOL BioFuels Corp., Philippines
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- Miang Besar Coal Terminal - Indonesia
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