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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, 07 March 16
INDONESIAN 5700 GAR COAL INDEX DECLINE $0.05 A TON WEEK OVER WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 0.28 percent week over week to averaging $38.66 per ton on this past Friday, ...
Monday, 07 March 16
FREIGHT MARKET MOVING POSITIVE; ALL SEGMENTS EXCEPT CAPE SHOWING A FIRM TREND
COALspot.com: The freight market was steady this past week and showing a firm trend for all segments except for Cape index.
The Baltic Dry Ind ...
Friday, 04 March 16
GLOBAL ECONOMY'S JITTERS ARE SLOWING DOWN SHIPPING EVEN FURTHER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The global economy’s shaky condition to say the least is now hampering growth and as a result demand for shipping is slowing down, something ...
Friday, 04 March 16
U.S. YEAR-TO-DATE COAL PRODUCTION TOTALED 109.3 MMST; 30.2% LOWER THAN THE COMPARABLE YEAR-TO-DATE COAL PRODUCTION IN 2015 - EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 13.1 million shor ...
Thursday, 03 March 16
INDIA'S BUDGET NOT ENOUGH TO BOOST STEELMAKERS' PROFITABILITY - FITCH RATINGS
COALspot.com: Fitch Ratings says that increase in proposed infrastructure spending in India's latest government budget is unlikely to provide a ...
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- SN Aboitiz Power Inc, Philippines
- Madhucon Powers Ltd - India
- Central Electricity Authority - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Power Finance Corporation Ltd., India
- Indonesian Coal Mining Association
- Iligan Light & Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- PowerSource Philippines DevCo
- Wilmar Investment Holdings
- Mercator Lines Limited - India
- Commonwealth Bank - Australia
- Economic Council, Georgia
- Malabar Cements Ltd - India
- Savvy Resources Ltd - HongKong
- Siam City Cement PLC, Thailand
- Attock Cement Pakistan Limited
- Coastal Gujarat Power Limited - India
- Australian Commodity Traders Exchange
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Miang Besar Coal Terminal - Indonesia
- Goldman Sachs - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMG Consultants - Indonesia
- Chettinad Cement Corporation Ltd - India
- Petron Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Interocean Group of Companies - India
- GMR Energy Limited - India
- Indian Oil Corporation Limited
- Kohat Cement Company Ltd. - Pakistan
- New Zealand Coal & Carbon
- Jaiprakash Power Ventures ltd
- White Energy Company Limited
- Electricity Generating Authority of Thailand
- Rio Tinto Coal - Australia
- Meralco Power Generation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tata Chemicals Ltd - India
- Anglo American - United Kingdom
- Gujarat Sidhee Cement - India
- Videocon Industries ltd - India
- McConnell Dowell - Australia
- Sree Jayajothi Cements Limited - India
- Antam Resourcindo - Indonesia
- GVK Power & Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- LBH Netherlands Bv - Netherlands
- Port Waratah Coal Services - Australia
- Ministry of Mines - Canada
- Dalmia Cement Bharat India
- Straits Asia Resources Limited - Singapore
- TeaM Sual Corporation - Philippines
- Carbofer General Trading SA - India
- PetroVietnam Power Coal Import and Supply Company
- Bulk Trading Sa - Switzerland
- Bahari Cakrawala Sebuku - Indonesia
- Price Waterhouse Coopers - Russia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Xindia Steels Limited - India
- Edison Trading Spa - Italy
- Energy Link Ltd, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Australian Coal Association
- Intertek Mineral Services - Indonesia
- Kumho Petrochemical, South Korea
- Globalindo Alam Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bharathi Cement Corporation - India
- OPG Power Generation Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Georgia Ports Authority, United States
- The State Trading Corporation of India Ltd
- Cement Manufacturers Association - India
- SMC Global Power, Philippines
- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
- Coalindo Energy - Indonesia
- VISA Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Global Green Power PLC Corporation, Philippines
- Thai Mozambique Logistica
- Posco Energy - South Korea
- Simpson Spence & Young - Indonesia
- Bhushan Steel Limited - India
- Lanco Infratech Ltd - India
- Formosa Plastics Group - Taiwan
- Minerals Council of Australia
- London Commodity Brokers - England
- CNBM International Corporation - China
- Mercuria Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Ministry of Transport, Egypt
- Renaissance Capital - South Africa
- Karaikal Port Pvt Ltd - India
- Bangladesh Power Developement Board
- Sakthi Sugars Limited - India
- Therma Luzon, Inc, Philippines
- Heidelberg Cement - Germany
- Ambuja Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Asmin Koalindo Tuhup - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- India Bulls Power Limited - India
- Manunggal Multi Energi - Indonesia
- Marubeni Corporation - India
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Agrawal Coal Company - India
- Sical Logistics Limited - India
- The Treasury - Australian Government
- IEA Clean Coal Centre - UK
- Cigading International Bulk Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Billiton Holdings Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Parry Sugars Refinery, India
- Maheswari Brothers Coal Limited - India
- PTC India Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Samtan Co., Ltd - South Korea
- Energy Development Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- Indogreen Group - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Orica Australia Pty. Ltd.
- Semirara Mining and Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Timah Investasi Mineral - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Leighton Contractors Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Sinarmas Energy and Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Merrill Lynch Commodities Europe
- South Luzon Thermal Energy Corporation
- Romanian Commodities Exchange
- Singapore Mercantile Exchange
- Kartika Selabumi Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Sojitz Corporation - Japan
- Parliament of New Zealand
- Thiess Contractors Indonesia
- Eastern Coal Council - USA
- ASAPP Information Group - India
- Africa Commodities Group - South Africa
- Aboitiz Power Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement - Thailand
- MS Steel International - UAE
- Indian Energy Exchange, India
- Sindya Power Generating Company Private Ltd
- Trasteel International SA, Italy
- Jindal Steel & Power Ltd - India
- International Coal Ventures Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- IHS Mccloskey Coal Group - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Uttam Galva Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Meenaskhi Energy Private Limited - India
- Global Business Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhoruka Overseas - Indonesia
- Star Paper Mills Limited - India
- Indo Tambangraya Megah - Indonesia
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- Riau Bara Harum - Indonesia
- Grasim Industreis Ltd - India
- Eastern Energy - Thailand
- Independent Power Producers Association of India
- Wood Mackenzie - Singapore
- Mintek Dendrill Indonesia
- Electricity Authority, New Zealand
- Indika Energy - Indonesia
- Planning Commission, India
- Vizag Seaport Private Limited - India
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- ICICI Bank Limited - India
- Binh Thuan Hamico - Vietnam
- Bhatia International Limited - India
- Semirara Mining Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Directorate Of Revenue Intelligence - India
- Makarim & Taira - Indonesia
- Banpu Public Company Limited - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Barasentosa Lestari - Indonesia
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Medco Energi Mining Internasional
- PNOC Exploration Corporation - Philippines
- Standard Chartered Bank - UAE
- Borneo Indobara - Indonesia
- Orica Mining Services - Indonesia
- Deloitte Consulting - India
- Aditya Birla Group - India
- Bukit Baiduri Energy - Indonesia
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