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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, 02 September 16
EIA FORECASTS U.S. COAL EXPORTS TO DECLINE BY 19 MMST IN 2016 TO 55 MMST
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 16.3 million sho ...
Thursday, 01 September 16
SUPRAMAX GETTING LEVELS OF MID/HIGHER 7K DELIVERY SINGAPORE FOR TRIPS TO CHINA AND AROUND 9K FOR DIRECTION INDIA - FEARNLEYS
Supramax
This week started slower with London on bank holiday Monday. The south east Asian market seems to have been taking a breather with chart ...
Thursday, 01 September 16
AUSTRALIA'S NEWCASTLE PORT SHIPPED 2.33 PERCENT MORE COAL IN JULY
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port has shipped $AU 1.10 bill ...
Wednesday, 31 August 16
THE DRY BULK MARKET MANAGED TO FIND FURTHER SUPPORT DURING THE LAST DAYS OF THE SUMMER SEASON - INTERMODAL
The Dry Bulk market managed to find further support during the last days of the summer season, with the BDI climbing above 700 last Friday, reachin ...
Tuesday, 30 August 16
THE SUDDEN SURGE IN IRON ORE TRADE HAS CREPT UP ON THE MARKET THIS PAST WEEK - GEORGE LAZARIDIS
The sudden surge in Iron ore trade has crept up on the market this past week bringing about a change in the prospects for Capes. Continued increase ...
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- Orica Mining Services - Indonesia
- Thai Mozambique Logistica
- Mercator Lines Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- GN Power Mariveles Coal Plant, Philippines
- OPG Power Generation Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Indian Oil Corporation Limited
- White Energy Company Limited
- Petrochimia International Co. Ltd.- Taiwan
- New Zealand Coal & Carbon
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- MS Steel International - UAE
- Semirara Mining and Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- GMR Energy Limited - India
- Sinarmas Energy and Mining - Indonesia
- Renaissance Capital - South Africa
- Carbofer General Trading SA - India
- Parry Sugars Refinery, India
- Kalimantan Lumbung Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Marubeni Corporation - India
- Borneo Indobara - Indonesia
- Semirara Mining Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- International Coal Ventures Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- Indika Energy - Indonesia
- Ministry of Finance - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement PLC, Thailand
- Makarim & Taira - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Central Java Power - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Antam Resourcindo - Indonesia
- Meralco Power Generation, Philippines
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Tamil Nadu electricity Board
- European Bulk Services B.V. - Netherlands
- Aboitiz Power Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- Bulk Trading Sa - Switzerland
- The State Trading Corporation of India Ltd
- Price Waterhouse Coopers - Russia
- Medco Energi Mining Internasional
- India Bulls Power Limited - India
- London Commodity Brokers - England
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
- Mintek Dendrill Indonesia
- PNOC Exploration Corporation - Philippines
- Cement Manufacturers Association - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Karaikal Port Pvt Ltd - India
- Bhatia International Limited - India
- Indonesian Coal Mining Association
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- GVK Power & Infra Limited - India
- SMG Consultants - Indonesia
- Intertek Mineral Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Samtan Co., Ltd - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Bukit Baiduri Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Aditya Birla Group - India
- Maharashtra Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Bhushan Steel Limited - India
- Toyota Tsusho Corporation, Japan
- Banpu Public Company Limited - Thailand
- Deloitte Consulting - India
- Vedanta Resources Plc - India
- Energy Development Corp, Philippines
- Essar Steel Hazira Ltd - India
- Mercuria Energy - Indonesia
- Electricity Authority, New Zealand
- Indogreen Group - Indonesia
- Star Paper Mills Limited - India
- Indo Tambangraya Megah - Indonesia
- CNBM International Corporation - China
- Electricity Generating Authority of Thailand
- Power Finance Corporation Ltd., India
- Ceylon Electricity Board - Sri Lanka
- Kideco Jaya Agung - Indonesia
- Baramulti Group, Indonesia
- Larsen & Toubro Limited - India
- San Jose City I Power Corp, Philippines
- Wood Mackenzie - Singapore
- LBH Netherlands Bv - Netherlands
- Romanian Commodities Exchange
- Coal and Oil Company - UAE
- Latin American Coal - Colombia
- TeaM Sual Corporation - Philippines
- Minerals Council of Australia
- Altura Mining Limited, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Sojitz Corporation - Japan
- Ministry of Mines - Canada
- Maheswari Brothers Coal Limited - India
- Eastern Energy - Thailand
- Oldendorff Carriers - Singapore
- Parliament of New Zealand
- Ministry of Transport, Egypt
- Independent Power Producers Association of India
- Sical Logistics Limited - India
- Anglo American - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- IHS Mccloskey Coal Group - USA
- Rashtriya Ispat Nigam Limited - India
- Agrawal Coal Company - India
- Bharathi Cement Corporation - India
- Bayan Resources Tbk. - Indonesia
- Standard Chartered Bank - UAE
- PTC India Limited - India
- Siam City Cement - Thailand
- Gujarat Sidhee Cement - India
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- Interocean Group of Companies - India
- Jindal Steel & Power Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Rio Tinto Coal - Australia
- Bhoruka Overseas - Indonesia
- Iligan Light & Power Inc, Philippines
- Economic Council, Georgia
- Billiton Holdings Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- ASAPP Information Group - India
- McConnell Dowell - Australia
- Kaltim Prima Coal - Indonesia
- Edison Trading Spa - Italy
- Wilmar Investment Holdings
- Orica Australia Pty. Ltd.
- Xindia Steels Limited - India
- Salva Resources Pvt Ltd - India
- Ambuja Cements Ltd - India
- Commonwealth Bank - Australia
- Australian Coal Association
- Africa Commodities Group - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thiess Contractors Indonesia
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- The Treasury - Australian Government
- Mjunction Services Limited - India
- Sree Jayajothi Cements Limited - India
- Bukit Makmur.PT - Indonesia
- Grasim Industreis Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Chettinad Cement Corporation Ltd - India
- Planning Commission, India
- Georgia Ports Authority, United States
- Tata Chemicals Ltd - India
- Ind-Barath Power Infra Limited - India
- Central Electricity Authority - India
- CIMB Investment Bank - Malaysia
- Sarangani Energy Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Merrill Lynch Commodities Europe
- Sakthi Sugars Limited - India
- Bangladesh Power Developement Board
- Formosa Plastics Group - Taiwan
- PowerSource Philippines DevCo
- Trasteel International SA, Italy
- Videocon Industries ltd - India
- Lanco Infratech Ltd - India
- Meenaskhi Energy Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Madhucon Powers Ltd - India
- Attock Cement Pakistan Limited
- Australian Commodity Traders Exchange
- Coastal Gujarat Power Limited - India
- Metalloyd Limited - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- The University of Queensland
- SMC Global Power, Philippines
- ICICI Bank Limited - India
- Manunggal Multi Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Global Green Power PLC Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Coalindo Energy - Indonesia
- Eastern Coal Council - USA
- Indian Energy Exchange, India
- Petron Corporation, Philippines
- Dalmia Cement Bharat India
- Miang Besar Coal Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Riau Bara Harum - Indonesia
- Global Business Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Timah Investasi Mineral - Indoneisa
- Kumho Petrochemical, South Korea
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