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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, 10 March 17
ESTIMATED U.S. COAL PRODUCTION ALMOST FLAT WEEK ENDED MARCH 4, SAYS EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 15.7 million short ton ...
Friday, 10 March 17
THE 5TH PHILIPPINES POWER AND ELECTRICITY WEEK RETURNS WITH A UNIQUE FOCUS IN 2017
5th Annual Philippines Power & Electricity
18-21 July 2017
Solaire Resort & Casino,Manila, Philippines
http://www.philippinespowe ...
Thursday, 09 March 17
INDONESIAN COAL BENCHMARK PRICE DROPPED FOR A THIRD STRAIGHT MONTH IN MARCH, GOVERNMENT DATA SHOWED
COALspot.com: Indonesian government declared coal benchmark price dropped for a fourth straight month in March, government data showed. The ...
Wednesday, 08 March 17
THE FREIGHT MARKET TODAY PROVIDES MUCH MORE CONFIDENCE COMPARED TO LAST YEAR - TIMOS PAPADIMITRIOU
So what's all the fuss about? During the past five months SnP activity has being surging exponentially in the dry bulk sector. Buyers are looki ...
Monday, 06 March 17
THE FREIGHT MARKET WAS CONTINUING TO FIRM UP THIS PAST WEEK
COALspot.com: The Freight market was continuing to firm up this past week.
The Baltic Exchange, tracking rates for ships carrying dry bulk com ...
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- Timah Investasi Mineral - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Antam Resourcindo - Indonesia
- Tamil Nadu electricity Board
- Directorate General of MIneral and Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Interocean Group of Companies - India
- Sakthi Sugars Limited - India
- Makarim & Taira - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Pipit Mutiara Jaya. PT, Indonesia
- Trasteel International SA, Italy
- Minerals Council of Australia
- Barasentosa Lestari - Indonesia
- ICICI Bank Limited - India
- Independent Power Producers Association of India
- Carbofer General Trading SA - India
- Bhoruka Overseas - Indonesia
- SMG Consultants - Indonesia
- Heidelberg Cement - Germany
- Bukit Baiduri Energy - Indonesia
- Marubeni Corporation - India
- Larsen & Toubro Limited - India
- Sindya Power Generating Company Private Ltd
- Banpu Public Company Limited - Thailand
- Toyota Tsusho Corporation, Japan
- Billiton Holdings Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Ministry of Mines - Canada
- Renaissance Capital - South Africa
- Kapuas Tunggal Persada - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Indian Oil Corporation Limited
- Economic Council, Georgia
- Wood Mackenzie - Singapore
- Singapore Mercantile Exchange
- Samtan Co., Ltd - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The State Trading Corporation of India Ltd
- Formosa Plastics Group - Taiwan
- Central Electricity Authority - India
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Krishnapatnam Port Company Ltd. - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Bharathi Cement Corporation - India
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
- Uttam Galva Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Standard Chartered Bank - UAE
- LBH Netherlands Bv - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Power Finance Corporation Ltd., India
- Chamber of Mines of South Africa
- Jorong Barutama Greston.PT - Indonesia
- Energy Development Corp, Philippines
- Gujarat Sidhee Cement - India
- Merrill Lynch Commodities Europe
- Mercator Lines Limited - India
- Indogreen Group - Indonesia
- Medco Energi Mining Internasional
- Cement Manufacturers Association - India
- Indika Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Chettinad Cement Corporation Ltd - India
- Electricity Generating Authority of Thailand
- Jindal Steel & Power Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- VISA Power Limited - India
- PNOC Exploration Corporation - Philippines
- Grasim Industreis Ltd - India
- MS Steel International - UAE
- Commonwealth Bank - Australia
- Alfred C Toepfer International GmbH - Germany
- Sical Logistics Limited - India
- Edison Trading Spa - Italy
- Australian Commodity Traders Exchange
- Global Business Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Semirara Mining Corp, Philippines
- Africa Commodities Group - South Africa
- Orica Australia Pty. Ltd.
- Riau Bara Harum - Indonesia
- GAC Shipping (India) Pvt Ltd
- Australian Coal Association
- Bahari Cakrawala Sebuku - Indonesia
- Baramulti Group, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Ambuja Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Siam City Cement - Thailand
- TeaM Sual Corporation - Philippines
- McConnell Dowell - Australia
- Mjunction Services Limited - India
- Kartika Selabumi Mining - Indonesia
- Latin American Coal - Colombia
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Bhushan Steel Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Salva Resources Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tata Chemicals Ltd - India
- Orica Mining Services - Indonesia
- Malabar Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- Romanian Commodities Exchange
- Altura Mining Limited, Indonesia
- IEA Clean Coal Centre - UK
- Bhatia International Limited - India
- New Zealand Coal & Carbon
- Cigading International Bulk Terminal - Indonesia
- GMR Energy Limited - India
- Karaikal Port Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Anglo American - United Kingdom
- Kepco SPC Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Indonesian Coal Mining Association
- Parry Sugars Refinery, India
- Xindia Steels Limited - India
- Planning Commission, India
- Kideco Jaya Agung - Indonesia
- SMC Global Power, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Simpson Spence & Young - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Mintek Dendrill Indonesia
- Bangladesh Power Developement Board
- Mercuria Energy - Indonesia
- Siam City Cement PLC, Thailand
- Lanco Infratech Ltd - India
- PTC India Limited - India
- Rashtriya Ispat Nigam Limited - India
- Kumho Petrochemical, South Korea
- Videocon Industries ltd - India
- Star Paper Mills Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Central Java Power - Indonesia
- The Treasury - Australian Government
- Miang Besar Coal Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Vedanta Resources Plc - India
- Iligan Light & Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Global Coal Blending Company Limited - Australia
- Globalindo Alam Lestari - Indonesia
- Ministry of Finance - Indonesia
- Indo Tambangraya Megah - Indonesia
- Posco Energy - South Korea
- Agrawal Coal Company - India
- Georgia Ports Authority, United States
- Coalindo Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- GVK Power & Infra Limited - India
- Coastal Gujarat Power Limited - India
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- Dalmia Cement Bharat India
- Price Waterhouse Coopers - Russia
- Pendopo Energi Batubara - Indonesia
- Aditya Birla Group - India
- CNBM International Corporation - China
- Maharashtra Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- International Coal Ventures Pvt Ltd - India
- Eastern Energy - Thailand
- Ind-Barath Power Infra Limited - India
- Maheswari Brothers Coal Limited - India
- European Bulk Services B.V. - Netherlands
- Indian Energy Exchange, India
- Borneo Indobara - Indonesia
- Attock Cement Pakistan Limited
- Meralco Power Generation, Philippines
- Metalloyd Limited - United Kingdom
- Therma Luzon, Inc, Philippines
- Thai Mozambique Logistica
- Manunggal Multi Energi - Indonesia
- Vizag Seaport Private Limited - India
- Energy Link Ltd, New Zealand
- Goldman Sachs - Singapore
- The University of Queensland
- Eastern Coal Council - USA
- Bayan Resources Tbk. - Indonesia
- Binh Thuan Hamico - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Parliament of New Zealand
- Deloitte Consulting - India
- Savvy Resources Ltd - HongKong
- Ministry of Transport, Egypt
- Global Green Power PLC Corporation, Philippines
- White Energy Company Limited
- San Jose City I Power Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- London Commodity Brokers - England
- PowerSource Philippines DevCo
- Rio Tinto Coal - Australia
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