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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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Wednesday, 07 December 16
U.S. COAL PRODUCTION IS FORECAST TO INCREASE BY 2% IN 2017 - EIA
U.S. Coal production in November 2016 was 70.7 million short tons (MMst), the third time this year monthly production exceeded 70 MMst, says EIA.
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Wednesday, 07 December 16
IT'S BEEN YET ANOTHER TURBULENT COUPLE OF DAYS..... - GEORGE LAZARIDIS
It’s been yet another turbulent couple of days, with a significant number of news headlines shaking up markets.
On Friday we had & ...
Monday, 05 December 16
INDIAN HYDROPOWER PRODUCTION AT LOWEST LEVEL SINCE 2012, SAYS COMMODORE RESEARCH
According to Commodore Research, the first eleven months of this year have seen India’s overall electricity production total approximately 1. ...
Monday, 05 December 16
THE DECEMBER 2016 HBA HITS TO ITS HIGHEST LEVEL SINCE MAY 2012
COALspot.com: The Indonesia coal benchmark price hits to its highest level since May 2012. The government declared benchmark prices for Indo ...
Monday, 05 December 16
BALTIC PANAMAX INDEX UP 5.98%; BALTIC CAPE INDEX FELL 2.52% W/W
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities rally slightly continues this past week and ending on a s ...
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- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GMR Energy Limited - India
- Toyota Tsusho Corporation, Japan
- Grasim Industreis Ltd - India
- Ind-Barath Power Infra Limited - India
- Bulk Trading Sa - Switzerland
- Iligan Light & Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Bhoruka Overseas - Indonesia
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Price Waterhouse Coopers - Russia
- Australian Commodity Traders Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Straits Asia Resources Limited - Singapore
- Mintek Dendrill Indonesia
- Maheswari Brothers Coal Limited - India
- Mercator Lines Limited - India
- Independent Power Producers Association of India
- McConnell Dowell - Australia
- Indian Energy Exchange, India
- International Coal Ventures Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sree Jayajothi Cements Limited - India
- Deloitte Consulting - India
- Oldendorff Carriers - Singapore
- New Zealand Coal & Carbon
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The University of Queensland
- Central Electricity Authority - India
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- Lanco Infratech Ltd - India
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Formosa Plastics Group - Taiwan
- Anglo American - United Kingdom
- Sindya Power Generating Company Private Ltd
- MS Steel International - UAE
- Neyveli Lignite Corporation Ltd, - India
- Bangladesh Power Developement Board
- Banpu Public Company Limited - Thailand
- Kaltim Prima Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- Romanian Commodities Exchange
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement PLC, Thailand
- Orica Mining Services - Indonesia
- PowerSource Philippines DevCo
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SN Aboitiz Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Riau Bara Harum - Indonesia
- Carbofer General Trading SA - India
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- Australian Coal Association
- Petrochimia International Co. Ltd.- Taiwan
- Salva Resources Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Ministry of Finance - Indonesia
- Essar Steel Hazira Ltd - India
- GVK Power & Infra Limited - India
- Wood Mackenzie - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Star Paper Mills Limited - India
- Timah Investasi Mineral - Indoneisa
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- White Energy Company Limited
- Leighton Contractors Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Economic Council, Georgia
- OPG Power Generation Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- ASAPP Information Group - India
- Sinarmas Energy and Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Indika Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Bharathi Cement Corporation - India
- Energy Link Ltd, New Zealand
- Attock Cement Pakistan Limited
- Uttam Galva Steels Limited - India
- Indian Oil Corporation Limited
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- Billiton Holdings Pty Ltd - Australia
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Goldman Sachs - Singapore
- LBH Netherlands Bv - Netherlands
- Semirara Mining Corp, Philippines
- Manunggal Multi Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Electricity Generating Authority of Thailand
- Petron Corporation, Philippines
- Baramulti Group, Indonesia
- Eastern Coal Council - USA
- Bhatia International Limited - India
- London Commodity Brokers - England
- Global Coal Blending Company Limited - Australia
- Antam Resourcindo - Indonesia
- Madhucon Powers Ltd - India
- Marubeni Corporation - India
- Meenaskhi Energy Private Limited - India
- Thai Mozambique Logistica
- Binh Thuan Hamico - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- Planning Commission, India
- IEA Clean Coal Centre - UK
- Altura Mining Limited, Indonesia
- Chamber of Mines of South Africa
- Parliament of New Zealand
- Gujarat Sidhee Cement - India
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Indogreen Group - Indonesia
- Sical Logistics Limited - India
- Standard Chartered Bank - UAE
- The Treasury - Australian Government
- Trasteel International SA, Italy
- Kobexindo Tractors - Indoneisa
- Makarim & Taira - Indonesia
- Renaissance Capital - South Africa
- Africa Commodities Group - South Africa
- Bukit Baiduri Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Orica Australia Pty. Ltd.
- Meralco Power Generation, Philippines
- Agrawal Coal Company - India
- Malabar Cements Ltd - India
- Latin American Coal - Colombia
- Globalindo Alam Lestari - Indonesia
- Rio Tinto Coal - Australia
- Miang Besar Coal Terminal - Indonesia
- Eastern Energy - Thailand
- Siam City Cement - Thailand
- Sarangani Energy Corporation, Philippines
- Coal and Oil Company - UAE
- VISA Power Limited - India
- Commonwealth Bank - Australia
- Thiess Contractors Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Gujarat Mineral Development Corp Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Asmin Koalindo Tuhup - Indonesia
- Kumho Petrochemical, South Korea
- Krishnapatnam Port Company Ltd. - India
- Mercuria Energy - Indonesia
- ICICI Bank Limited - India
- Simpson Spence & Young - Indonesia
- Barasentosa Lestari - Indonesia
- PTC India Limited - India
- Power Finance Corporation Ltd., India
- Chettinad Cement Corporation Ltd - India
- CIMB Investment Bank - Malaysia
- Therma Luzon, Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karaikal Port Pvt Ltd - India
- Aditya Birla Group - India
- Posco Energy - South Korea
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- Videocon Industries ltd - India
- Wilmar Investment Holdings
- Indo Tambangraya Megah - Indonesia
- Heidelberg Cement - Germany
- Semirara Mining and Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Xindia Steels Limited - India
- Electricity Authority, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Tamil Nadu electricity Board
- Jaiprakash Power Ventures ltd
- Kapuas Tunggal Persada - Indonesia
- Port Waratah Coal Services - Australia
- Central Java Power - Indonesia
- Ministry of Mines - Canada
- Dalmia Cement Bharat India
- Holcim Trading Pte Ltd - Singapore
- South Luzon Thermal Energy Corporation
- Bhushan Steel Limited - India
- Energy Development Corp, Philippines
- Jindal Steel & Power Ltd - India
- Edison Trading Spa - Italy
- Parry Sugars Refinery, India
- Vizag Seaport Private Limited - India
- CNBM International Corporation - China
- Medco Energi Mining Internasional
- Metalloyd Limited - United Kingdom
- Minerals Council of Australia
- Mjunction Services Limited - India
- Rashtriya Ispat Nigam Limited - India
- Singapore Mercantile Exchange
- SMC Global Power, Philippines
- Cement Manufacturers Association - India
- Larsen & Toubro Limited - India
- Intertek Mineral Services - Indonesia
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