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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, 06 May 16
U.S. WEEKLY COAL PRODUCTION UP 9 PERCENT W/W; DOWN 35.3 PERCENT Y/Y - EIA
COALspot.com – U.S the world’s second largest coal producer has produced approximately totaled an estimated 11.3 million short to ...
Thursday, 05 May 16
DRY BULK MARKET ON REVERSE MODE, AS HOLIDAYS AROUND THE WORLD HURT DEMAND - HELLENIC SHIPPING NEWS
The dry bulk market’s recent rally has been put on a temporary hold, as various holidays around the world have put a stop in it. In its lates ...
Wednesday, 04 May 16
COAL IMPORTS: A VOLATILE MATTER OR STILL POWERING DOWN? - CLARKSONS
Chinese coal imports decreased significantly in 2014-15, and so far in 2016 the pace of decline appears to have slowed, with imports even recording ...
Wednesday, 04 May 16
IS THE DRY BULK MARKET OUT OF THE WOODS YET, OR NOT? - HELLENIC SHIPPING NEWS
Things are beginning to brighten up in the beleaguered dry bulk market, which is riding on a multi-week rally to find itself around the “psyc ...
Wednesday, 04 May 16
POWER - WEEK: REAL EXAMPLES AND CASE STUDIES
POWER WEEK
7 - 11 November 2016, PARKROYAL on Beach Road Hotel, Singapore
www.power-week.com
Overview
Designed for the global e ...
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- Vizag Seaport Private Limited - India
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- Bharathi Cement Corporation - India
- Singapore Mercantile Exchange
- Planning Commission, India
- Price Waterhouse Coopers - Russia
- Sakthi Sugars Limited - India
- PowerSource Philippines DevCo
- Rio Tinto Coal - Australia
- Krishnapatnam Port Company Ltd. - India
- Lanco Infratech Ltd - India
- Metalloyd Limited - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- PTC India Limited - India
- Pendopo Energi Batubara - Indonesia
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
- Orica Australia Pty. Ltd.
- Xindia Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Independent Power Producers Association of India
- SN Aboitiz Power Inc, Philippines
- Iligan Light & Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- Minerals Council of Australia
- Videocon Industries ltd - India
- Indogreen Group - Indonesia
- Indo Tambangraya Megah - Indonesia
- Tata Chemicals Ltd - India
- International Coal Ventures Pvt Ltd - India
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- Oldendorff Carriers - Singapore
- Sarangani Energy Corporation, Philippines
- Parliament of New Zealand
- Sojitz Corporation - Japan
- Bahari Cakrawala Sebuku - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CNBM International Corporation - China
- Georgia Ports Authority, United States
- Africa Commodities Group - South Africa
- Australian Coal Association
- Cement Manufacturers Association - India
- The University of Queensland
- PetroVietnam Power Coal Import and Supply Company
- Cigading International Bulk Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Siam City Cement PLC, Thailand
- Formosa Plastics Group - Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Sical Logistics Limited - India
- Central Java Power - Indonesia
- Ministry of Mines - Canada
- Bulk Trading Sa - Switzerland
- Wood Mackenzie - Singapore
- Coalindo Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Meralco Power Generation, Philippines
- Indonesian Coal Mining Association
- Deloitte Consulting - India
- Mintek Dendrill Indonesia
- Bhoruka Overseas - Indonesia
- Tamil Nadu electricity Board
- Mercuria Energy - Indonesia
- Chamber of Mines of South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rashtriya Ispat Nigam Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement - Thailand
- Simpson Spence & Young - Indonesia
- Energy Development Corp, Philippines
- Mercator Lines Limited - India
- New Zealand Coal & Carbon
- Port Waratah Coal Services - Australia
- Ambuja Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Orica Mining Services - Indonesia
- Marubeni Corporation - India
- Carbofer General Trading SA - India
- Kobexindo Tractors - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- GAC Shipping (India) Pvt Ltd
- Coal and Oil Company - UAE
- Kartika Selabumi Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Timah Investasi Mineral - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Malabar Cements Ltd - India
- Petron Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Salva Resources Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- GVK Power & Infra Limited - India
- Bhushan Steel Limited - India
- Aboitiz Power Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Standard Chartered Bank - UAE
- Thai Mozambique Logistica
- Samtan Co., Ltd - South Korea
- Savvy Resources Ltd - HongKong
- Directorate Of Revenue Intelligence - India
- Aditya Birla Group - India
- Merrill Lynch Commodities Europe
- Maheswari Brothers Coal Limited - India
- Renaissance Capital - South Africa
- Riau Bara Harum - Indonesia
- Uttam Galva Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Karbindo Abesyapradhi - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Attock Cement Pakistan Limited
- Sindya Power Generating Company Private Ltd
- AsiaOL BioFuels Corp., Philippines
- GN Power Mariveles Coal Plant, Philippines
- San Jose City I Power Corp, Philippines
- Wilmar Investment Holdings
- Sree Jayajothi Cements Limited - India
- Bukit Makmur.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Bangladesh Power Developement Board
- Agrawal Coal Company - India
- Vijayanagar Sugar Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Interocean Group of Companies - India
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- Altura Mining Limited, Indonesia
- Heidelberg Cement - Germany
- Alfred C Toepfer International GmbH - Germany
- Miang Besar Coal Terminal - Indonesia
- Romanian Commodities Exchange
- Sinarmas Energy and Mining - Indonesia
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
- Ministry of Finance - Indonesia
- Electricity Generating Authority of Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhatia International Limited - India
- Mjunction Services Limited - India
- ASAPP Information Group - India
- The State Trading Corporation of India Ltd
- GMR Energy Limited - India
- Meenaskhi Energy Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Kideco Jaya Agung - Indonesia
- Commonwealth Bank - Australia
- Kumho Petrochemical, South Korea
- Karaikal Port Pvt Ltd - India
- India Bulls Power Limited - India
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Medco Energi Mining Internasional
- Makarim & Taira - Indonesia
- Eastern Energy - Thailand
- Straits Asia Resources Limited - Singapore
- Edison Trading Spa - Italy
- Grasim Industreis Ltd - India
- SMC Global Power, Philippines
- Parry Sugars Refinery, India
- Barasentosa Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMG Consultants - Indonesia
- ICICI Bank Limited - India
- Semirara Mining and Power Corporation, Philippines
- McConnell Dowell - Australia
- Intertek Mineral Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- TeaM Sual Corporation - Philippines
- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Baramulti Group, Indonesia
- Semirara Mining Corp, Philippines
- MS Steel International - UAE
- Madhucon Powers Ltd - India
- Dalmia Cement Bharat India
- VISA Power Limited - India
- Thiess Contractors Indonesia
- Economic Council, Georgia
- Central Electricity Authority - India
- Borneo Indobara - Indonesia
- IHS Mccloskey Coal Group - USA
- PNOC Exploration Corporation - Philippines
- Larsen & Toubro Limited - India
- Power Finance Corporation Ltd., India
- London Commodity Brokers - England
- Jindal Steel & Power Ltd - India
- Indian Oil Corporation Limited
- Vedanta Resources Plc - India
- Trasteel International SA, Italy
- Bukit Baiduri Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Indika Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CIMB Investment Bank - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Latin American Coal - Colombia
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