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