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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, 16 March 17
CAPESIZE: SHOWING STRENGTH; PANAMAX: VERY QUIET - FEARNLEYS
Supramax
The Atlantic market faced less activity from the USG whereas at the Cont tonnage seemed to tighten up with more cargoes emerging. Despit ...
Wednesday, 15 March 17
SHIPPING MARKET INSIGHT - GEORGE PANAGOPOULOS
Over the past two weeks, the Dry Baltic Index has been on an upward trend, breaking the 1000 point mark and creating a positive sentiment for the u ...
Tuesday, 14 March 17
ORDERBOOK-TO-FEET RATIO DECREASING; THE FREIGHT MARKET IMPROVING
It seems as though the renewed optimism that has arisen from the recent upward trends being noted in the freight market, the dry bulk market has be ...
Monday, 13 March 17
PORT OF NEWCASTLE HAS SHIPPED 11.563 MILLION TONS COAL IN FEBRUARY 2017; DECLINED 12.19 PERCENT M/M
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export ports has shipped $AU 1,4 ...
Monday, 13 March 17
INDO - INDIA COAL FREIGHT RATES STAY FIRM
COALspot.com: The Freight market was continuing to firming up.
The Baltic Exchange, tracking rates for ships carrying dry bulk commodities ros ...
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- Electricity Generating Authority of Thailand
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- Mintek Dendrill Indonesia
- Vedanta Resources Plc - India
- Tamil Nadu electricity Board
- Formosa Plastics Group - Taiwan
- Kartika Selabumi Mining - Indonesia
- Power Finance Corporation Ltd., India
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining Corp, Philippines
- Eastern Coal Council - USA
- Binh Thuan Hamico - Vietnam
- Kobexindo Tractors - Indoneisa
- Eastern Energy - Thailand
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Dalmia Cement Bharat India
- Maheswari Brothers Coal Limited - India
- The State Trading Corporation of India Ltd
- Deloitte Consulting - India
- TeaM Sual Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- McConnell Dowell - Australia
- Africa Commodities Group - South Africa
- Indian Oil Corporation Limited
- Bahari Cakrawala Sebuku - Indonesia
- Tata Chemicals Ltd - India
- Iligan Light & Power Inc, Philippines
- Posco Energy - South Korea
- GMR Energy Limited - India
- Edison Trading Spa - Italy
- Antam Resourcindo - Indonesia
- Ministry of Finance - Indonesia
- Minerals Council of Australia
- Kohat Cement Company Ltd. - Pakistan
- Makarim & Taira - Indonesia
- Globalindo Alam Lestari - Indonesia
- Thiess Contractors Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Kepco SPC Power Corporation, Philippines
- VISA Power Limited - India
- India Bulls Power Limited - India
- Attock Cement Pakistan Limited
- Metalloyd Limited - United Kingdom
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- Petrochimia International Co. Ltd.- Taiwan
- Bhatia International Limited - India
- Mercuria Energy - Indonesia
- Petron Corporation, Philippines
- Videocon Industries ltd - India
- Central Electricity Authority - India
- Straits Asia Resources Limited - Singapore
- International Coal Ventures Pvt Ltd - India
- Chamber of Mines of South Africa
- Meenaskhi Energy Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- Larsen & Toubro Limited - India
- Electricity Authority, New Zealand
- Marubeni Corporation - India
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Toyota Tsusho Corporation, Japan
- European Bulk Services B.V. - Netherlands
- Parliament of New Zealand
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- Aboitiz Power Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Medco Energi Mining Internasional
- Directorate Of Revenue Intelligence - India
- Merrill Lynch Commodities Europe
- Lanco Infratech Ltd - India
- Bukit Makmur.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Ambuja Cements Ltd - India
- The Treasury - Australian Government
- Kaltim Prima Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- Orica Mining Services - Indonesia
- Australian Coal Association
- Mjunction Services Limited - India
- Indo Tambangraya Megah - Indonesia
- Rio Tinto Coal - Australia
- Asmin Koalindo Tuhup - Indonesia
- Leighton Contractors Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Samtan Co., Ltd - South Korea
- Essar Steel Hazira Ltd - India
- MS Steel International - UAE
- Sical Logistics Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Independent Power Producers Association of India
- Kapuas Tunggal Persada - Indonesia
- ICICI Bank Limited - India
- Pendopo Energi Batubara - Indonesia
- Madhucon Powers Ltd - India
- Economic Council, Georgia
- Semirara Mining and Power Corporation, Philippines
- Goldman Sachs - Singapore
- LBH Netherlands Bv - Netherlands
- PTC India Limited - India
- Cement Manufacturers Association - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Link Ltd, New Zealand
- Heidelberg Cement - Germany
- Bhushan Steel Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Baramulti Group, Indonesia
- The University of Queensland
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- Energy Development Corp, Philippines
- Bulk Trading Sa - Switzerland
- Intertek Mineral Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Indogreen Group - Indonesia
- Wood Mackenzie - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Port Waratah Coal Services - Australia
- Carbofer General Trading SA - India
- Gujarat Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Bukit Asam (Persero) Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement PLC, Thailand
- London Commodity Brokers - England
- Alfred C Toepfer International GmbH - Germany
- Bayan Resources Tbk. - Indonesia
- Sakthi Sugars Limited - India
- Aditya Birla Group - India
- Malabar Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Parry Sugars Refinery, India
- Ind-Barath Power Infra Limited - India
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- SN Aboitiz Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Baiduri Energy - Indonesia
- Mercator Lines Limited - India
- Latin American Coal - Colombia
- Xindia Steels Limited - India
- San Jose City I Power Corp, Philippines
- Star Paper Mills Limited - India
- Georgia Ports Authority, United States
- Standard Chartered Bank - UAE
- Trasteel International SA, Italy
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- CNBM International Corporation - China
- Grasim Industreis Ltd - India
- ASAPP Information Group - India
- Rashtriya Ispat Nigam Limited - India
- Coastal Gujarat Power Limited - India
- Wilmar Investment Holdings
- Agrawal Coal Company - India
- Sarangani Energy Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Holcim Trading Pte Ltd - Singapore
- Ceylon Electricity Board - Sri Lanka
- Therma Luzon, Inc, Philippines
- Meralco Power Generation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Kalimantan Lumbung Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bharathi Cement Corporation - India
- Siam City Cement - Thailand
- Kideco Jaya Agung - Indonesia
- Price Waterhouse Coopers - Russia
- GAC Shipping (India) Pvt Ltd
- OPG Power Generation Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Jaiprakash Power Ventures ltd
- Vijayanagar Sugar Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Manunggal Multi Energi - Indonesia
- Indonesian Coal Mining Association
- Singapore Mercantile Exchange
- Coal and Oil Company - UAE
- GVK Power & Infra Limited - India
- Gujarat Sidhee Cement - India
- Miang Besar Coal Terminal - Indonesia
- New Zealand Coal & Carbon
- Pipit Mutiara Jaya. PT, Indonesia
- Sojitz Corporation - Japan
- Renaissance Capital - South Africa
- Indian Energy Exchange, India
- Central Java Power - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Borneo Indobara - Indonesia
- Altura Mining Limited, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Uttam Galva Steels Limited - India
- SMG Consultants - Indonesia
- Oldendorff Carriers - Singapore
- Planning Commission, India
- Bangladesh Power Developement Board
- Commonwealth Bank - Australia
- GN Power Mariveles Coal Plant, Philippines
- Interocean Group of Companies - India
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