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