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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 February 17
U.S. COAL OUTPUT IS ESTIMATED TO HAVE DECLINED BY 158 MMST IN 2016 TO 739 MMST, SAYS EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 17 million short tons ...
Wednesday, 08 February 17
MARKET INSIGHT - PANOS MAKRINOS
The challenges the oil market has witnessed since the end of 2014 has resulted in a crisis for the global offshore oil and gas exploration industry ...
Tuesday, 07 February 17
WE ARE STILL RIDING ON A WAVE OF MARKET IMPROVEMENT, WITH THE GLOBAL TRADE OF MOST COMMODITIES STILL SHOWING SIGNS OF IMPROVING GROWTH - GEORGE LAZARIDIS
The end of 2016 came with a rejuvenated sentiment amongst most traders and investors, in part through the sigh of relief that 2016 was finally comi ...
Monday, 06 February 17
AFTER MONTHS OF GAINS, THE INDONESIAN GOVERNMENT DECLARED MONTHLY COAL BENCHMARK PRICE IS STEADILY DROPPING
COALspot.com: Over the past two months, the HBA of Indonesian thermal coal has dropped around 18.06 percent. It sank to $ 83.32 per ton for Februar ...
Monday, 06 February 17
THE FREIGHT MARKET CONTINUED ITS DOWNFALL IN ALL SEGMENTS
COALspot.com: Due to Lunar year holidays and celebration, the Freight market was declined in all segments week ending 27 January. The fall was cont ...
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- Kapuas Tunggal Persada - Indonesia
- South Luzon Thermal Energy Corporation
- Ministry of Finance - Indonesia
- PNOC Exploration Corporation - Philippines
- Uttam Galva Steels Limited - India
- Intertek Mineral Services - Indonesia
- Australian Coal Association
- Bukit Asam (Persero) Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Georgia Ports Authority, United States
- Toyota Tsusho Corporation, Japan
- Gujarat Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Krishnapatnam Port Company Ltd. - India
- Wilmar Investment Holdings
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- Power Finance Corporation Ltd., India
- San Jose City I Power Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- PetroVietnam Power Coal Import and Supply Company
- Lanco Infratech Ltd - India
- GMR Energy Limited - India
- White Energy Company Limited
- Standard Chartered Bank - UAE
- Jaiprakash Power Ventures ltd
- Essar Steel Hazira Ltd - India
- Rio Tinto Coal - Australia
- Eastern Energy - Thailand
- Orica Mining Services - Indonesia
- Malabar Cements Ltd - India
- Bharathi Cement Corporation - India
- Commonwealth Bank - Australia
- Karaikal Port Pvt Ltd - India
- Singapore Mercantile Exchange
- Petron Corporation, Philippines
- The Treasury - Australian Government
- Ceylon Electricity Board - Sri Lanka
- Pendopo Energi Batubara - Indonesia
- Ambuja Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Anglo American - United Kingdom
- Therma Luzon, Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Ministry of Mines - Canada
- Globalindo Alam Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Australian Commodity Traders Exchange
- SMC Global Power, Philippines
- Trasteel International SA, Italy
- Heidelberg Cement - Germany
- Global Business Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- PowerSource Philippines DevCo
- VISA Power Limited - India
- Kobexindo Tractors - Indoneisa
- Sakthi Sugars Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMG Consultants - Indonesia
- Meenaskhi Energy Private Limited - India
- Metalloyd Limited - United Kingdom
- LBH Netherlands Bv - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Energy Development Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- McConnell Dowell - Australia
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Goldman Sachs - Singapore
- Mercator Lines Limited - India
- Cement Manufacturers Association - India
- Larsen & Toubro Limited - India
- Indika Energy - Indonesia
- Dalmia Cement Bharat India
- Central Electricity Authority - India
- Eastern Coal Council - USA
- Gujarat Sidhee Cement - India
- Salva Resources Pvt Ltd - India
- Thai Mozambique Logistica
- Leighton Contractors Pty Ltd - Australia
- Agrawal Coal Company - India
- Kalimantan Lumbung Energi - Indonesia
- Madhucon Powers Ltd - India
- Bukit Baiduri Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Mintek Dendrill Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Banpu Public Company Limited - Thailand
- Samtan Co., Ltd - South Korea
- Marubeni Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Parliament of New Zealand
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- Coalindo Energy - Indonesia
- Vizag Seaport Private Limited - India
- Semirara Mining Corp, Philippines
- Antam Resourcindo - Indonesia
- Tata Chemicals Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- Economic Council, Georgia
- Holcim Trading Pte Ltd - Singapore
- Indian Oil Corporation Limited
- Africa Commodities Group - South Africa
- Vedanta Resources Plc - India
- Kartika Selabumi Mining - Indonesia
- PTC India Limited - India
- Chettinad Cement Corporation Ltd - India
- Altura Mining Limited, Indonesia
- Ind-Barath Power Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- India Bulls Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- Sojitz Corporation - Japan
- MS Steel International - UAE
- Renaissance Capital - South Africa
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Sree Jayajothi Cements Limited - India
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- CIMB Investment Bank - Malaysia
- Thiess Contractors Indonesia
- Independent Power Producers Association of India
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- Orica Australia Pty. Ltd.
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Romanian Commodities Exchange
- Sinarmas Energy and Mining - Indonesia
- Interocean Group of Companies - India
- Borneo Indobara - Indonesia
- Energy Link Ltd, New Zealand
- Bangladesh Power Developement Board
- Bayan Resources Tbk. - Indonesia
- Wood Mackenzie - Singapore
- Price Waterhouse Coopers - Russia
- International Coal Ventures Pvt Ltd - India
- Carbofer General Trading SA - India
- Bhatia International Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Mjunction Services Limited - India
- Grasim Industreis Ltd - India
- Edison Trading Spa - Italy
- Electricity Authority, New Zealand
- Straits Asia Resources Limited - Singapore
- Aditya Birla Group - India
- Parry Sugars Refinery, India
- Mercuria Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Makarim & Taira - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Barasentosa Lestari - Indonesia
- Oldendorff Carriers - Singapore
- New Zealand Coal & Carbon
- ASAPP Information Group - India
- Timah Investasi Mineral - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Tamil Nadu electricity Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Star Paper Mills Limited - India
- Siam City Cement PLC, Thailand
- IEA Clean Coal Centre - UK
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Java Power - Indonesia
- Bhushan Steel Limited - India
- Binh Thuan Hamico - Vietnam
- European Bulk Services B.V. - Netherlands
- Planning Commission, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Attock Cement Pakistan Limited
- Latin American Coal - Colombia
- GAC Shipping (India) Pvt Ltd
- Medco Energi Mining Internasional
- TeaM Sual Corporation - Philippines
- Merrill Lynch Commodities Europe
- Indogreen Group - Indonesia
- Chamber of Mines of South Africa
- Manunggal Multi Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- London Commodity Brokers - England
- Kepco SPC Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- ICICI Bank Limited - India
- Siam City Cement - Thailand
- Riau Bara Harum - Indonesia
- Indian Energy Exchange, India
- Bhoruka Overseas - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Rashtriya Ispat Nigam Limited - India
- OPG Power Generation Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- The University of Queensland
- Posco Energy - South Korea
- Bukit Makmur.PT - Indonesia
- Savvy Resources Ltd - HongKong
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