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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, 03 March 17
U.S. WEEKLY COAL PRODUCTION ESTIMATED AT 15.7 MMST; DECLINE 6.7% W/W - EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 15.7 million short ton ...
Thursday, 02 March 17
ULTRAMAX: INDONESIA TO INDIA COAL ROUNDS IS BEING FIXED AT AROUND MID 11K BSS SINGAPORE DELIVERY - FEARNLEYS
Supramax
Holiday mode within Atlantic i.e. very few movements but rates remained still positive, mostly in the USG region where tight tonnage sup ...
Wednesday, 01 March 17
2017 IS LOOKING LIKE IT WILL BE A GOOD YEAR FOR A NUMBER OF COMMODITIES - LINOS KOGEVINAS
2017 is looking like it will be a good year for a number of commodities. Following the price recovery witnessed in 2016 across a number of commodit ...
Tuesday, 28 February 17
PORT OF NEWCASTLE SHIPPED 17.39% LESS COAL IN JANUARY; TRADE VALUE UP 11.87% M/M
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port has shipped $AU 1,625.6 M ...
Monday, 27 February 17
THE FREIGHT MARKET WAS FIRMED UP THIS PAST WEEK; BCI ROSE 57.64% W/W
COALspot.com: The Freight market was firmed up this past week.
The Baltic Exchange, tracking rates for ships carrying dry bulk commod ...
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- Electricity Authority, New Zealand
- Directorate Of Revenue Intelligence - India
- Agrawal Coal Company - India
- San Jose City I Power Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- Globalindo Alam Lestari - Indonesia
- Oldendorff Carriers - Singapore
- OPG Power Generation Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Merrill Lynch Commodities Europe
- The State Trading Corporation of India Ltd
- Indika Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Heidelberg Cement - Germany
- Directorate General of MIneral and Coal - Indonesia
- Sakthi Sugars Limited - India
- Orica Australia Pty. Ltd.
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Sindya Power Generating Company Private Ltd
- Sinarmas Energy and Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Trasteel International SA, Italy
- Tata Chemicals Ltd - India
- Karaikal Port Pvt Ltd - India
- GMR Energy Limited - India
- GVK Power & Infra Limited - India
- Eastern Coal Council - USA
- Riau Bara Harum - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Formosa Plastics Group - Taiwan
- Planning Commission, India
- TNB Fuel Sdn Bhd - Malaysia
- TeaM Sual Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Romanian Commodities Exchange
- CIMB Investment Bank - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Larsen & Toubro Limited - India
- Lanco Infratech Ltd - India
- Kobexindo Tractors - Indoneisa
- Sical Logistics Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Rio Tinto Coal - Australia
- PowerSource Philippines DevCo
- Wood Mackenzie - Singapore
- Alfred C Toepfer International GmbH - Germany
- Singapore Mercantile Exchange
- Miang Besar Coal Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Mintek Dendrill Indonesia
- Borneo Indobara - Indonesia
- Tamil Nadu electricity Board
- Australian Commodity Traders Exchange
- Therma Luzon, Inc, Philippines
- Essar Steel Hazira Ltd - India
- Dalmia Cement Bharat India
- European Bulk Services B.V. - Netherlands
- Jaiprakash Power Ventures ltd
- MS Steel International - UAE
- Coastal Gujarat Power Limited - India
- Bharathi Cement Corporation - India
- White Energy Company Limited
- GN Power Mariveles Coal Plant, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Edison Trading Spa - Italy
- Jindal Steel & Power Ltd - India
- Kideco Jaya Agung - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Gujarat Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Interocean Group of Companies - India
- IHS Mccloskey Coal Group - USA
- Semirara Mining Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Kartika Selabumi Mining - Indonesia
- IEA Clean Coal Centre - UK
- Indian Energy Exchange, India
- Pendopo Energi Batubara - Indonesia
- Posco Energy - South Korea
- Star Paper Mills Limited - India
- Goldman Sachs - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Anglo American - United Kingdom
- LBH Netherlands Bv - Netherlands
- SN Aboitiz Power Inc, Philippines
- Vedanta Resources Plc - India
- Meenaskhi Energy Private Limited - India
- Coal and Oil Company - UAE
- Toyota Tsusho Corporation, Japan
- Chettinad Cement Corporation Ltd - India
- Thai Mozambique Logistica
- PNOC Exploration Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Sarangani Energy Corporation, Philippines
- Kumho Petrochemical, South Korea
- Xindia Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Ministry of Transport, Egypt
- Commonwealth Bank - Australia
- Makarim & Taira - Indonesia
- Power Finance Corporation Ltd., India
- Grasim Industreis Ltd - India
- Ambuja Cements Ltd - India
- Madhucon Powers Ltd - India
- Petron Corporation, Philippines
- Meralco Power Generation, Philippines
- Siam City Cement - Thailand
- Samtan Co., Ltd - South Korea
- Global Green Power PLC Corporation, Philippines
- Electricity Generating Authority of Thailand
- Eastern Energy - Thailand
- Banpu Public Company Limited - Thailand
- Thiess Contractors Indonesia
- Gujarat Sidhee Cement - India
- Medco Energi Mining Internasional
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- Savvy Resources Ltd - HongKong
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ind-Barath Power Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Australian Coal Association
- Leighton Contractors Pty Ltd - Australia
- Economic Council, Georgia
- Chamber of Mines of South Africa
- The University of Queensland
- Baramulti Group, Indonesia
- CNBM International Corporation - China
- Kaltim Prima Coal - Indonesia
- Videocon Industries ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ceylon Electricity Board - Sri Lanka
- Sojitz Corporation - Japan
- McConnell Dowell - Australia
- Central Java Power - Indonesia
- Vizag Seaport Private Limited - India
- Aditya Birla Group - India
- Indian Oil Corporation Limited
- Maheswari Brothers Coal Limited - India
- Central Electricity Authority - India
- Bukit Makmur.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Marubeni Corporation - India
- Indogreen Group - Indonesia
- PTC India Limited - India
- Bangladesh Power Developement Board
- Latin American Coal - Colombia
- Orica Mining Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- AsiaOL BioFuels Corp., Philippines
- Petrochimia International Co. Ltd.- Taiwan
- London Commodity Brokers - England
- Timah Investasi Mineral - Indoneisa
- South Luzon Thermal Energy Corporation
- Pipit Mutiara Jaya. PT, Indonesia
- Africa Commodities Group - South Africa
- Parliament of New Zealand
- Bhoruka Overseas - Indonesia
- SMG Consultants - Indonesia
- New Zealand Coal & Carbon
- Kepco SPC Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Ministry of Finance - Indonesia
- Global Business Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Minerals Council of Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Parry Sugars Refinery, India
- Standard Chartered Bank - UAE
- Antam Resourcindo - Indonesia
- The Treasury - Australian Government
- Bhushan Steel Limited - India
- Mjunction Services Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Independent Power Producers Association of India
- Port Waratah Coal Services - Australia
- India Bulls Power Limited - India
- Ministry of Mines - Canada
- Kohat Cement Company Ltd. - Pakistan
- Carbofer General Trading SA - India
- Cigading International Bulk Terminal - Indonesia
- VISA Power Limited - India
- Mercator Lines Limited - India
- Manunggal Multi Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Aboitiz Power Corporation - Philippines
- Bulk Trading Sa - Switzerland
- ICICI Bank Limited - India
- Indonesian Coal Mining Association
- Mercuria Energy - Indonesia
- SMC Global Power, Philippines
- GAC Shipping (India) Pvt Ltd
- Wilmar Investment Holdings
- Indo Tambangraya Megah - Indonesia
- Coalindo Energy - Indonesia
- Energy Development Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Deloitte Consulting - India
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