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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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Monday, 02 January 17
PORT OF NEWCASTLE SHIPPED 13.62 MMT OF COAL IN NOVEMBER; UP 4.18% M/M
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port has shipped $AU 1,201 Mil ...
Friday, 30 December 16
US WEEKLY COAL PRODUCTION TOTALS 15.2 MMST, DOWN 3.1% - EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 15.2 million sho ...
Thursday, 29 December 16
CHINA AIMS TO CAP COAL-FIRED POWER CAPACITY AT 1,100 GIGAWATTS BY THE END OF 2020 - REUTERS
China aims to cap total primary energy consumption at around 4.4 billion tonnes of coal equivalent in 2017, the director of the National Energy Adm ...
Wednesday, 28 December 16
FINANCIAL MARKETS AND COMMODITY MARKETS HAVE ALREADY SHOWED CONSIDERABLE IMPROVEMENT AND RENEWED OPTIMISM - GEORGE LAZARIDIS
As 2016 nears to a close many will be breathing a heavy sigh of relief, having made it through one of the toughest years in this century and lookin ...
Wednesday, 28 December 16
BUMA SIGNED APPROXIMATELY US$ 493 MILLION WORTH OF MINING SERVICES CONTRACTS WITH PT ADARO INDONESIA AND PT ANGSANA JAYA ENERGY
COALspot.com: PT Delta Dunia Makmur Tbk. Has announced that its primary operating subsidiary, PT Bukit Makmur Mandiri Utama ("BUMA") has ...
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- Romanian Commodities Exchange
- IEA Clean Coal Centre - UK
- Bahari Cakrawala Sebuku - Indonesia
- Coal and Oil Company - UAE
- PowerSource Philippines DevCo
- Malabar Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Larsen & Toubro Limited - India
- Rashtriya Ispat Nigam Limited - India
- Baramulti Group, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Posco Energy - South Korea
- Energy Link Ltd, New Zealand
- Goldman Sachs - Singapore
- Interocean Group of Companies - India
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- Indika Energy - Indonesia
- GMR Energy Limited - India
- Kideco Jaya Agung - Indonesia
- Economic Council, Georgia
- Petrochimia International Co. Ltd.- Taiwan
- SMG Consultants - Indonesia
- Bukit Baiduri Energy - Indonesia
- Aditya Birla Group - India
- GVK Power & Infra Limited - India
- Parliament of New Zealand
- Latin American Coal - Colombia
- Videocon Industries ltd - India
- Billiton Holdings Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- Indo Tambangraya Megah - Indonesia
- Standard Chartered Bank - UAE
- Alfred C Toepfer International GmbH - Germany
- Ambuja Cements Ltd - India
- PTC India Limited - India
- The University of Queensland
- Karbindo Abesyapradhi - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Karaikal Port Pvt Ltd - India
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Kaltim Prima Coal - Indonesia
- Bharathi Cement Corporation - India
- Altura Mining Limited, Indonesia
- Commonwealth Bank - Australia
- GAC Shipping (India) Pvt Ltd
- Renaissance Capital - South Africa
- Power Finance Corporation Ltd., India
- Indonesian Coal Mining Association
- Electricity Generating Authority of Thailand
- Aboitiz Power Corporation - Philippines
- New Zealand Coal & Carbon
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bukit Makmur.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Vizag Seaport Private Limited - India
- Simpson Spence & Young - Indonesia
- Dalmia Cement Bharat India
- Maharashtra Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Jindal Steel & Power Ltd - India
- Independent Power Producers Association of India
- Australian Commodity Traders Exchange
- OPG Power Generation Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Bhoruka Overseas - Indonesia
- Chamber of Mines of South Africa
- Grasim Industreis Ltd - India
- Orica Mining Services - Indonesia
- Singapore Mercantile Exchange
- VISA Power Limited - India
- ASAPP Information Group - India
- Ind-Barath Power Infra Limited - India
- Africa Commodities Group - South Africa
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Heidelberg Cement - Germany
- Sical Logistics Limited - India
- Coalindo Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Agrawal Coal Company - India
- Sakthi Sugars Limited - India
- Holcim Trading Pte Ltd - Singapore
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Straits Asia Resources Limited - Singapore
- Krishnapatnam Port Company Ltd. - India
- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- Trasteel International SA, Italy
- Bhushan Steel Limited - India
- Toyota Tsusho Corporation, Japan
- Georgia Ports Authority, United States
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Merrill Lynch Commodities Europe
- Directorate Of Revenue Intelligence - India
- Mercator Lines Limited - India
- Metalloyd Limited - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- Indian Oil Corporation Limited
- Bangladesh Power Developement Board
- Star Paper Mills Limited - India
- Petron Corporation, Philippines
- Indian Energy Exchange, India
- Globalindo Alam Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Leighton Contractors Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Minerals Council of Australia
- The State Trading Corporation of India Ltd
- Makarim & Taira - Indonesia
- Parry Sugars Refinery, India
- Sinarmas Energy and Mining - Indonesia
- Borneo Indobara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Sarangani Energy Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- PNOC Exploration Corporation - Philippines
- Energy Development Corp, Philippines
- Central Electricity Authority - India
- Sojitz Corporation - Japan
- Carbofer General Trading SA - India
- Madhucon Powers Ltd - India
- Medco Energi Mining Internasional
- TNB Fuel Sdn Bhd - Malaysia
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- Global Coal Blending Company Limited - Australia
- Miang Besar Coal Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Eastern Energy - Thailand
- Antam Resourcindo - Indonesia
- McConnell Dowell - Australia
- ICICI Bank Limited - India
- Maheswari Brothers Coal Limited - India
- Rio Tinto Coal - Australia
- TeaM Sual Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- SN Aboitiz Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- MS Steel International - UAE
- Edison Trading Spa - Italy
- Uttam Galva Steels Limited - India
- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- Kobexindo Tractors - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Xindia Steels Limited - India
- Ministry of Transport, Egypt
- Electricity Authority, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Indogreen Group - Indonesia
- Attock Cement Pakistan Limited
- Kalimantan Lumbung Energi - Indonesia
- Savvy Resources Ltd - HongKong
- White Energy Company Limited
- Wilmar Investment Holdings
- San Jose City I Power Corp, Philippines
- Anglo American - United Kingdom
- Ministry of Finance - Indonesia
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Coastal Gujarat Power Limited - India
- Siam City Cement PLC, Thailand
- Orica Australia Pty. Ltd.
- Riau Bara Harum - Indonesia
- Mintek Dendrill Indonesia
- Global Business Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- Tata Chemicals Ltd - India
- Gujarat Sidhee Cement - India
- Manunggal Multi Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Essar Steel Hazira Ltd - India
- Siam City Cement - Thailand
- Timah Investasi Mineral - Indoneisa
- Tamil Nadu electricity Board
- Intertek Mineral Services - Indonesia
- Wood Mackenzie - Singapore
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- Eastern Coal Council - USA
- Bayan Resources Tbk. - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- India Bulls Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Thiess Contractors Indonesia
- Bhatia International Limited - India
- CNBM International Corporation - China
- Price Waterhouse Coopers - Russia
- Meralco Power Generation, Philippines
- Chettinad Cement Corporation Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- SMC Global Power, Philippines
- Therma Luzon, Inc, Philippines
- Bulk Trading Sa - Switzerland
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