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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, 03 August 16
SHIP TRADING AND ORDERING CLOSE TO A STALEMATE AS SUMMER LULL KICKS IN
With newbuilding activity already at a near standstill since the start of the year, most of 2016’s trading activity in shipping was evident i ...
Tuesday, 02 August 16
INDONESIAN CS COAL INDICES STAY POSITIVE
COALspot.com: Average 5000 GAR coal index of Indonesian origin rose 0.71% week over week to averaging $41.12 per ton this past week, shows CS (i) C ...
Monday, 01 August 16
4200 GAR INDONESIAN COAL PRICE MAY TOUCH $ 32/33 A TON LEVELS SOON
COALspot.com: Indonesian coal prices are likely surge further in 2016 as the recent price movement in Indonesian coal markets suggests that the mar ...
Monday, 01 August 16
BALTIC INDEX ENDED NEGATIVE NOTE THIS PAST WEEK ON WEAKER RATES ACROSS ALL LARGE VESSEL SEGMENTS
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities slide slightly as Cape, Panamax and Supramax segments end ...
Friday, 29 July 16
U.S. COAL OUTPUT SLIPS SLIGHTLY WEEK OVER WEEK
COALspot.com – U.S., the world’s second largest coal producers has produced approximately totalled an estimated 15 million short tons ( ...
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- Salva Resources Pvt Ltd - India
- Standard Chartered Bank - UAE
- Sakthi Sugars Limited - India
- European Bulk Services B.V. - Netherlands
- Orica Mining Services - Indonesia
- Ministry of Mines - Canada
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
- Power Finance Corporation Ltd., India
- Parliament of New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Indian Energy Exchange, India
- Globalindo Alam Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Meralco Power Generation, Philippines
- Chettinad Cement Corporation Ltd - India
- Electricity Authority, New Zealand
- Attock Cement Pakistan Limited
- Xindia Steels Limited - India
- Indogreen Group - Indonesia
- Merrill Lynch Commodities Europe
- SMG Consultants - Indonesia
- Sical Logistics Limited - India
- Karaikal Port Pvt Ltd - India
- Eastern Coal Council - USA
- Renaissance Capital - South Africa
- Heidelberg Cement - Germany
- Africa Commodities Group - South Africa
- CIMB Investment Bank - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Latin American Coal - Colombia
- McConnell Dowell - Australia
- Kaltim Prima Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Posco Energy - South Korea
- Sinarmas Energy and Mining - Indonesia
- Australian Coal Association
- Planning Commission, India
- Coastal Gujarat Power Limited - India
- Maheswari Brothers Coal Limited - India
- Altura Mining Limited, Indonesia
- Malabar Cements Ltd - India
- Agrawal Coal Company - India
- Petron Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Samtan Co., Ltd - South Korea
- Semirara Mining and Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Independent Power Producers Association of India
- Bhushan Steel Limited - India
- IEA Clean Coal Centre - UK
- Semirara Mining Corp, Philippines
- Parry Sugars Refinery, India
- Eastern Energy - Thailand
- VISA Power Limited - India
- Deloitte Consulting - India
- Ministry of Transport, Egypt
- Chamber of Mines of South Africa
- Wood Mackenzie - Singapore
- Mintek Dendrill Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Commodity Traders Exchange
- Formosa Plastics Group - Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- Bulk Trading Sa - Switzerland
- Medco Energi Mining Internasional
- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- GVK Power & Infra Limited - India
- New Zealand Coal & Carbon
- Interocean Group of Companies - India
- Commonwealth Bank - Australia
- Orica Australia Pty. Ltd.
- Madhucon Powers Ltd - India
- PowerSource Philippines DevCo
- Energy Link Ltd, New Zealand
- Uttam Galva Steels Limited - India
- Indika Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Gujarat Sidhee Cement - India
- Bukit Makmur.PT - Indonesia
- Mjunction Services Limited - India
- Vizag Seaport Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- ICICI Bank Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Iligan Light & Power Inc, Philippines
- Energy Development Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- GMR Energy Limited - India
- Kumho Petrochemical, South Korea
- Timah Investasi Mineral - Indoneisa
- PNOC Exploration Corporation - Philippines
- Carbofer General Trading SA - India
- Metalloyd Limited - United Kingdom
- Sindya Power Generating Company Private Ltd
- Kideco Jaya Agung - Indonesia
- Bhoruka Overseas - Indonesia
- Borneo Indobara - Indonesia
- Sojitz Corporation - Japan
- Intertek Mineral Services - Indonesia
- London Commodity Brokers - England
- TNB Fuel Sdn Bhd - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Antam Resourcindo - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Goldman Sachs - Singapore
- Tamil Nadu electricity Board
- Ministry of Finance - Indonesia
- Banpu Public Company Limited - Thailand
- Savvy Resources Ltd - HongKong
- Singapore Mercantile Exchange
- Maharashtra Electricity Regulatory Commission - India
- Economic Council, Georgia
- Wilmar Investment Holdings
- Siam City Cement PLC, Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Mercuria Energy - Indonesia
- Baramulti Group, Indonesia
- Pendopo Energi Batubara - Indonesia
- Global Business Power Corporation, Philippines
- Grasim Industreis Ltd - India
- White Energy Company Limited
- Billiton Holdings Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Aboitiz Power Corporation - Philippines
- Port Waratah Coal Services - Australia
- Videocon Industries ltd - India
- Gujarat Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- Siam City Cement - Thailand
- Ambuja Cements Ltd - India
- Cement Manufacturers Association - India
- Trasteel International SA, Italy
- Coalindo Energy - Indonesia
- Minerals Council of Australia
- Simpson Spence & Young - Indonesia
- Star Paper Mills Limited - India
- Bukit Baiduri Energy - Indonesia
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- MS Steel International - UAE
- Lanco Infratech Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Price Waterhouse Coopers - Russia
- Jindal Steel & Power Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Jaiprakash Power Ventures ltd
- Makarim & Taira - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- ASAPP Information Group - India
- OPG Power Generation Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Aditya Birla Group - India
- Directorate Of Revenue Intelligence - India
- PTC India Limited - India
- Indonesian Coal Mining Association
- Vijayanagar Sugar Pvt Ltd - India
- Central Java Power - Indonesia
- Toyota Tsusho Corporation, Japan
- Global Green Power PLC Corporation, Philippines
- SMC Global Power, Philippines
- Ceylon Electricity Board - Sri Lanka
- Rio Tinto Coal - Australia
- Riau Bara Harum - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Bharathi Cement Corporation - India
- CNBM International Corporation - China
- Miang Besar Coal Terminal - Indonesia
- TeaM Sual Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Mercator Lines Limited - India
- Rashtriya Ispat Nigam Limited - India
- Marubeni Corporation - India
- Thiess Contractors Indonesia
- Kapuas Tunggal Persada - Indonesia
- Edison Trading Spa - Italy
- Central Electricity Authority - India
- Neyveli Lignite Corporation Ltd, - India
- GAC Shipping (India) Pvt Ltd
- Meenaskhi Energy Private Limited - India
- Binh Thuan Hamico - Vietnam
- Vedanta Resources Plc - India
- San Jose City I Power Corp, Philippines
- Georgia Ports Authority, United States
- Dalmia Cement Bharat India
- India Bulls Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Romanian Commodities Exchange
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Indo Tambangraya Megah - Indonesia
- South Luzon Thermal Energy Corporation
- Bhatia International Limited - India
- The Treasury - Australian Government
- Bangladesh Power Developement Board
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