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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, 12 December 14
U.S WEEKLY COAL PRODUCTION UP 3.4% W/E DECEMBER 6
COALspot.com – United States the world's one of the largest coal producers, produced approximately 19.6 million short tons (mmst) of coal ...
Wednesday, 10 December 14
SHIPPING MARKET INSIGHT - GEORGE ILIOPOULOS, INTERMODAL
COALspot.com: As 2014 is coming to an end, we look back to what has happened during the year and notice that SnP activity has been particularly sof ...
Wednesday, 10 December 14
WORLD HARD COAL MARKET 2014: PRODUCTION AND TRADE STAGNATING, IMPORTS TO GERMANY AND EUROPE ON THE DECLINE
Press Release: German Coal Importers Association (VDKi) criticizes regulations ordering reduction of CO2 emissions from coal-fired power plants as ...
Tuesday, 09 December 14
PRESSURE ON CHINA COAL MINERS TO CONTINUE DESPITE GOVERNMENT SUPPORT - FITCH
COALspot.com: Fitch Ratings says that Chinese coal mining companies will continue to be pressured by low prices, which will persist despite recent ...
Tuesday, 09 December 14
Q4' 2015, FOB INDONESIA COAL SWAP CLOSED AT $ 49.02 W/E 5 DEC
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 lost month on month, week over week and day on day.
The Q1 swap has lost US$ 0.2 ...
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- Port Waratah Coal Services - Australia
- Romanian Commodities Exchange
- Eastern Energy - Thailand
- Essar Steel Hazira Ltd - India
- Energy Development Corp, Philippines
- Mintek Dendrill Indonesia
- Maheswari Brothers Coal Limited - India
- Grasim Industreis Ltd - India
- Toyota Tsusho Corporation, Japan
- Eastern Coal Council - USA
- Larsen & Toubro Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Electricity Authority, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sojitz Corporation - Japan
- Oldendorff Carriers - Singapore
- Savvy Resources Ltd - HongKong
- Planning Commission, India
- Directorate Of Revenue Intelligence - India
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- Straits Asia Resources Limited - Singapore
- Binh Thuan Hamico - Vietnam
- Anglo American - United Kingdom
- ASAPP Information Group - India
- SMC Global Power, Philippines
- Kohat Cement Company Ltd. - Pakistan
- GN Power Mariveles Coal Plant, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Sinarmas Energy and Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- International Coal Ventures Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Bhoruka Overseas - Indonesia
- Power Finance Corporation Ltd., India
- Tamil Nadu electricity Board
- Simpson Spence & Young - Indonesia
- Xindia Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Kapuas Tunggal Persada - Indonesia
- Sindya Power Generating Company Private Ltd
- Singapore Mercantile Exchange
- White Energy Company Limited
- Sree Jayajothi Cements Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Barasentosa Lestari - Indonesia
- Trasteel International SA, Italy
- Thai Mozambique Logistica
- Chamber of Mines of South Africa
- MS Steel International - UAE
- CIMB Investment Bank - Malaysia
- Global Coal Blending Company Limited - Australia
- Karaikal Port Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Heidelberg Cement - Germany
- Mjunction Services Limited - India
- Kobexindo Tractors - Indoneisa
- Vedanta Resources Plc - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- San Jose City I Power Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Holcim Trading Pte Ltd - Singapore
- SMG Consultants - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining Corp, Philippines
- The Treasury - Australian Government
- Bharathi Cement Corporation - India
- OPG Power Generation Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Siam City Cement - Thailand
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- PNOC Exploration Corporation - Philippines
- Marubeni Corporation - India
- Carbofer General Trading SA - India
- Commonwealth Bank - Australia
- Agrawal Coal Company - India
- Africa Commodities Group - South Africa
- Central Java Power - Indonesia
- Baramulti Group, Indonesia
- Jaiprakash Power Ventures ltd
- Pendopo Energi Batubara - Indonesia
- Samtan Co., Ltd - South Korea
- SN Aboitiz Power Inc, Philippines
- PTC India Limited - India
- Standard Chartered Bank - UAE
- Australian Coal Association
- Economic Council, Georgia
- Siam City Cement PLC, Thailand
- Kideco Jaya Agung - Indonesia
- Indonesian Coal Mining Association
- Attock Cement Pakistan Limited
- Gujarat Sidhee Cement - India
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
- GVK Power & Infra Limited - India
- Posco Energy - South Korea
- Vizag Seaport Private Limited - India
- Coastal Gujarat Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Madhucon Powers Ltd - India
- Mercator Lines Limited - India
- Latin American Coal - Colombia
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- Altura Mining Limited, Indonesia
- Wood Mackenzie - Singapore
- Global Green Power PLC Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Indogreen Group - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Merrill Lynch Commodities Europe
- Thiess Contractors Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kalimantan Lumbung Energi - Indonesia
- Parliament of New Zealand
- Sarangani Energy Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Ministry of Finance - Indonesia
- IEA Clean Coal Centre - UK
- Interocean Group of Companies - India
- Electricity Generating Authority of Thailand
- Kumho Petrochemical, South Korea
- ICICI Bank Limited - India
- Goldman Sachs - Singapore
- PowerSource Philippines DevCo
- Sakthi Sugars Limited - India
- Bhatia International Limited - India
- McConnell Dowell - Australia
- The State Trading Corporation of India Ltd
- Directorate General of MIneral and Coal - Indonesia
- Petron Corporation, Philippines
- Australian Commodity Traders Exchange
- Parry Sugars Refinery, India
- Coalindo Energy - Indonesia
- Tata Chemicals Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- CNBM International Corporation - China
- Offshore Bulk Terminal Pte Ltd, Singapore
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Kepco SPC Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Aboitiz Power Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Ministry of Mines - Canada
- Meenaskhi Energy Private Limited - India
- Energy Link Ltd, New Zealand
- Videocon Industries ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- VISA Power Limited - India
- Iligan Light & Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Dalmia Cement Bharat India
- Ambuja Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Lanco Infratech Ltd - India
- Indian Oil Corporation Limited
- Karbindo Abesyapradhi - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Central Electricity Authority - India
- Mercuria Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Georgia Ports Authority, United States
- Edison Trading Spa - Italy
- Bulk Trading Sa - Switzerland
- Banpu Public Company Limited - Thailand
- Bayan Resources Tbk. - Indonesia
- Chettinad Cement Corporation Ltd - India
- Indian Energy Exchange, India
- Sical Logistics Limited - India
- Borneo Indobara - Indonesia
- Meralco Power Generation, Philippines
- Star Paper Mills Limited - India
- Timah Investasi Mineral - Indoneisa
- Orica Mining Services - Indonesia
- Bangladesh Power Developement Board
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- London Commodity Brokers - England
- Minerals Council of Australia
- Therma Luzon, Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bhushan Steel Limited - India
- GAC Shipping (India) Pvt Ltd
- Wilmar Investment Holdings
- Renaissance Capital - South Africa
- Uttam Galva Steels Limited - India
- Deloitte Consulting - India
- Indika Energy - Indonesia
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- Ministry of Transport, Egypt
- The University of Queensland
- Bahari Cakrawala Sebuku - Indonesia
- IHS Mccloskey Coal Group - USA
- AsiaOL BioFuels Corp., Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- LBH Netherlands Bv - Netherlands
- Rio Tinto Coal - Australia
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