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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, 07 August 15
COAL PRICE DEVELOPMENTS CAN ONLY BE DESCRIBED, SUCCINCTLY AS "OVERSUPPLY MEETS SUBDUED DEMAND" - VDKI
Coal Outlook 2015 – International
Regarding the outlook for global coal trading, two questions arise: firstly, “ whether the years of ...
Friday, 07 August 15
U.S. YEAR-TO-DATE COAL PRODUCTION TOTALED 528.1 MMST; DOWN 8.7% Y/Y - EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 17.7 million shor ...
Thursday, 06 August 15
THE RATES FOR CAPES SHOOT UP LAST WEEK; GIVING THIS RECENT RALLY SOME MUCH NEEDED LEGS - INTERMODAL
COALspot.com: The Dry Bulk market noted another positive closing last week, entirely supported by Capesize performance, which managed to balance th ...
Thursday, 06 August 15
HARD COAL AND COKE IMPORTS TO GERMANY REACH NEW ALL-TIME HIGH OF 56.2M TONES IN 2014
Demand for German and imported hard coal In 2014, in 2014 fell by almost 8%, or 4.8m TCE, to 56.2m TCE.
According to German Coal Importer ...
Thursday, 06 August 15
SEABORNE WORLD TRADE IN STEAM COAL GROWS BY 3% YOY - GERMAN COAL IMPORTER ASSOCIATION
Global trade with hard coal, at 1,272m tones in 2014, increased by 35m tonnes or 3% in comparison with the previous year.
According to associa ...
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- CIMB Investment Bank - Malaysia
- Goldman Sachs - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
- Merrill Lynch Commodities Europe
- Asmin Koalindo Tuhup - Indonesia
- Independent Power Producers Association of India
- Gujarat Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Aditya Birla Group - India
- Gujarat Mineral Development Corp Ltd - India
- Bukit Baiduri Energy - Indonesia
- Singapore Mercantile Exchange
- Global Business Power Corporation, Philippines
- CNBM International Corporation - China
- Meralco Power Generation, Philippines
- Malabar Cements Ltd - India
- New Zealand Coal & Carbon
- Makarim & Taira - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Marubeni Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Jaiprakash Power Ventures ltd
- VISA Power Limited - India
- Metalloyd Limited - United Kingdom
- San Jose City I Power Corp, Philippines
- Deloitte Consulting - India
- Coastal Gujarat Power Limited - India
- Orica Mining Services - Indonesia
- Petron Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- TeaM Sual Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Romanian Commodities Exchange
- Rio Tinto Coal - Australia
- PowerSource Philippines DevCo
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thiess Contractors Indonesia
- London Commodity Brokers - England
- Australian Commodity Traders Exchange
- Uttam Galva Steels Limited - India
- Anglo American - United Kingdom
- Thai Mozambique Logistica
- Simpson Spence & Young - Indonesia
- Gujarat Sidhee Cement - India
- Ministry of Finance - Indonesia
- Parry Sugars Refinery, India
- Siam City Cement - Thailand
- Bhushan Steel Limited - India
- MS Steel International - UAE
- Tata Chemicals Ltd - India
- Bayan Resources Tbk. - Indonesia
- Latin American Coal - Colombia
- Vizag Seaport Private Limited - India
- Toyota Tsusho Corporation, Japan
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- PNOC Exploration Corporation - Philippines
- ASAPP Information Group - India
- Attock Cement Pakistan Limited
- Jindal Steel & Power Ltd - India
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Agrawal Coal Company - India
- Central Java Power - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Pendopo Energi Batubara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Central Electricity Authority - India
- Chamber of Mines of South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Australia Pty. Ltd.
- GVK Power & Infra Limited - India
- India Bulls Power Limited - India
- Mjunction Services Limited - India
- The Treasury - Australian Government
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Mines - Canada
- Indo Tambangraya Megah - Indonesia
- Dalmia Cement Bharat India
- Cement Manufacturers Association - India
- Kideco Jaya Agung - Indonesia
- Formosa Plastics Group - Taiwan
- Ceylon Electricity Board - Sri Lanka
- Mintek Dendrill Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Videocon Industries ltd - India
- Georgia Ports Authority, United States
- Port Waratah Coal Services - Australia
- Heidelberg Cement - Germany
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Antam Resourcindo - Indonesia
- Sree Jayajothi Cements Limited - India
- Parliament of New Zealand
- GAC Shipping (India) Pvt Ltd
- Bhatia International Limited - India
- Economic Council, Georgia
- Sojitz Corporation - Japan
- Sarangani Energy Corporation, Philippines
- Lanco Infratech Ltd - India
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- European Bulk Services B.V. - Netherlands
- Ambuja Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- SMC Global Power, Philippines
- Indonesian Coal Mining Association
- Therma Luzon, Inc, Philippines
- Eastern Energy - Thailand
- Mercuria Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bangladesh Power Developement Board
- McConnell Dowell - Australia
- Energy Development Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Sakthi Sugars Limited - India
- Directorate Of Revenue Intelligence - India
- Coalindo Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Oldendorff Carriers - Singapore
- Carbofer General Trading SA - India
- Global Green Power PLC Corporation, Philippines
- SMG Consultants - Indonesia
- Indian Energy Exchange, India
- Directorate General of MIneral and Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement PLC, Thailand
- IEA Clean Coal Centre - UK
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- Posco Energy - South Korea
- Borneo Indobara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Medco Energi Mining Internasional
- Karaikal Port Pvt Ltd - India
- Minerals Council of Australia
- Power Finance Corporation Ltd., India
- Tamil Nadu electricity Board
- Bukit Makmur.PT - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Global Coal Blending Company Limited - Australia
- White Energy Company Limited
- Larsen & Toubro Limited - India
- Cigading International Bulk Terminal - Indonesia
- Planning Commission, India
- Globalindo Alam Lestari - Indonesia
- PTC India Limited - India
- IHS Mccloskey Coal Group - USA
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- Meenaskhi Energy Private Limited - India
- Sical Logistics Limited - India
- Maheswari Brothers Coal Limited - India
- Energy Link Ltd, New Zealand
- Altura Mining Limited, Indonesia
- GMR Energy Limited - India
- Star Paper Mills Limited - India
- Riau Bara Harum - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indogreen Group - Indonesia
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- Kalimantan Lumbung Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Aboitiz Power Corporation - Philippines
- Baramulti Group, Indonesia
- Trasteel International SA, Italy
- AsiaOL BioFuels Corp., Philippines
- OPG Power Generation Pvt Ltd - India
- Bharathi Cement Corporation - India
- Electricity Generating Authority of Thailand
- Interocean Group of Companies - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- Edison Trading Spa - Italy
- ICICI Bank Limited - India
- Sindya Power Generating Company Private Ltd
- Kapuas Tunggal Persada - Indonesia
- Coal and Oil Company - UAE
- Rashtriya Ispat Nigam Limited - India
- Binh Thuan Hamico - Vietnam
- Mercator Lines Limited - India
- Ind-Barath Power Infra Limited - India
- Australian Coal Association
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Madhucon Powers Ltd - India
- Salva Resources Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Straits Asia Resources Limited - Singapore
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- Semirara Mining and Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- GN Power Mariveles Coal Plant, Philippines
- Commonwealth Bank - Australia
- Kepco SPC Power Corporation, Philippines
- Vedanta Resources Plc - India
- Ministry of Transport, Egypt
- Intertek Mineral Services - Indonesia
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