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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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Thursday, 06 February 14
THE WORLD LARGEST COAL EXPORTER SHIPPED AROUND 35.90 MMT OF COAL IN DECEMBER 2013
COALspot.com: Indonesia, the world 4th largest coal producer and the Global largest multi grade coal exporter shipped around $2* billion worth ...
Thursday, 06 February 14
PANAMAX: FAR EAST IS ALMOST ABSENT AND ATLANTIC ON SLOW STEAM
Handy
Due to ongoing Chinese New Year the market is still quiet. Slowly we can see some fresh coal cargos entering the market with second half Feb/ ...
Wednesday, 05 February 14
DRY BULK MARKET HAS LOST FURTHER GROUND THIS PAST WEEK - INTERMODAL
COALspot.com: The Dry Bulk market has lost further ground this past week as activity ex-Far East disappeared into the Chinese holidays and owners id ...
Wednesday, 05 February 14
MARKET INSIGHT - TASOS PAPADOPOULOS
KNOWLEDGE TO ELEVATE
COALspot.com: Let's take a break from market prospects, numbers, order book etc. and shed some light on the conclusions of ...
Tuesday, 04 February 14
NEWCASTLE PORT'S WEEKLY COAL EXPORTS HIT NEW HIGH OF 3.53 MMT
COALspot.com: In the week ended 3 February 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled ...
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- Madhucon Powers Ltd - India
- Gujarat Sidhee Cement - India
- Indian Energy Exchange, India
- Bangladesh Power Developement Board
- IEA Clean Coal Centre - UK
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
- Petrochimia International Co. Ltd.- Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Makarim & Taira - Indonesia
- Vedanta Resources Plc - India
- Standard Chartered Bank - UAE
- Aboitiz Power Corporation - Philippines
- Larsen & Toubro Limited - India
- Cement Manufacturers Association - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kumho Petrochemical, South Korea
- Directorate General of MIneral and Coal - Indonesia
- Romanian Commodities Exchange
- ASAPP Information Group - India
- Antam Resourcindo - Indonesia
- Therma Luzon, Inc, Philippines
- Indika Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Bharathi Cement Corporation - India
- Ind-Barath Power Infra Limited - India
- The University of Queensland
- Wood Mackenzie - Singapore
- Dalmia Cement Bharat India
- Chamber of Mines of South Africa
- Goldman Sachs - Singapore
- Xindia Steels Limited - India
- Meralco Power Generation, Philippines
- Samtan Co., Ltd - South Korea
- Central Electricity Authority - India
- Port Waratah Coal Services - Australia
- Maheswari Brothers Coal Limited - India
- Global Green Power PLC Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- VISA Power Limited - India
- Rio Tinto Coal - Australia
- Ministry of Transport, Egypt
- Kohat Cement Company Ltd. - Pakistan
- Indonesian Coal Mining Association
- Star Paper Mills Limited - India
- Bukit Baiduri Energy - Indonesia
- Semirara Mining Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Georgia Ports Authority, United States
- Bhatia International Limited - India
- Metalloyd Limited - United Kingdom
- Coalindo Energy - Indonesia
- Videocon Industries ltd - India
- Planning Commission, India
- Eastern Coal Council - USA
- CNBM International Corporation - China
- Vizag Seaport Private Limited - India
- The Treasury - Australian Government
- Gujarat Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
- Electricity Authority, New Zealand
- Indian Oil Corporation Limited
- PTC India Limited - India
- Siam City Cement PLC, Thailand
- Coal and Oil Company - UAE
- Manunggal Multi Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Coastal Gujarat Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Tamil Nadu electricity Board
- Thai Mozambique Logistica
- Economic Council, Georgia
- Billiton Holdings Pty Ltd - Australia
- Commonwealth Bank - Australia
- Marubeni Corporation - India
- Price Waterhouse Coopers - Russia
- Wilmar Investment Holdings
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Grasim Industreis Ltd - India
- Energy Development Corp, Philippines
- Independent Power Producers Association of India
- McConnell Dowell - Australia
- Merrill Lynch Commodities Europe
- Minerals Council of Australia
- TeaM Sual Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- PowerSource Philippines DevCo
- Renaissance Capital - South Africa
- Central Java Power - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Kepco SPC Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- The State Trading Corporation of India Ltd
- Chettinad Cement Corporation Ltd - India
- Mercuria Energy - Indonesia
- Parliament of New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Trasteel International SA, Italy
- PetroVietnam Power Coal Import and Supply Company
- Banpu Public Company Limited - Thailand
- Posco Energy - South Korea
- Tata Chemicals Ltd - India
- Interocean Group of Companies - India
- Parry Sugars Refinery, India
- India Bulls Power Limited - India
- LBH Netherlands Bv - Netherlands
- Sindya Power Generating Company Private Ltd
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- Bahari Cakrawala Sebuku - Indonesia
- South Luzon Thermal Energy Corporation
- Sical Logistics Limited - India
- Australian Coal Association
- Kapuas Tunggal Persada - Indonesia
- Intertek Mineral Services - Indonesia
- SMC Global Power, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- GVK Power & Infra Limited - India
- Carbofer General Trading SA - India
- Power Finance Corporation Ltd., India
- Indogreen Group - Indonesia
- Edison Trading Spa - Italy
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- European Bulk Services B.V. - Netherlands
- Sree Jayajothi Cements Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Sarangani Energy Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Miang Besar Coal Terminal - Indonesia
- Ambuja Cements Ltd - India
- Singapore Mercantile Exchange
- Borneo Indobara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- Orica Mining Services - Indonesia
- Malabar Cements Ltd - India
- Uttam Galva Steels Limited - India
- New Zealand Coal & Carbon
- Attock Cement Pakistan Limited
- Eastern Energy - Thailand
- Riau Bara Harum - Indonesia
- ICICI Bank Limited - India
- Australian Commodity Traders Exchange
- OPG Power Generation Pvt Ltd - India
- SMG Consultants - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Indo Tambangraya Megah - Indonesia
- Kaltim Prima Coal - Indonesia
- Heidelberg Cement - Germany
- Formosa Plastics Group - Taiwan
- Holcim Trading Pte Ltd - Singapore
- Deloitte Consulting - India
- Toyota Tsusho Corporation, Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Barasentosa Lestari - Indonesia
- London Commodity Brokers - England
- Anglo American - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- GAC Shipping (India) Pvt Ltd
- Ministry of Mines - Canada
- Jindal Steel & Power Ltd - India
- CIMB Investment Bank - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Simpson Spence & Young - Indonesia
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- Pendopo Energi Batubara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Latin American Coal - Colombia
- Petron Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- MS Steel International - UAE
- GMR Energy Limited - India
- Agrawal Coal Company - India
- Energy Link Ltd, New Zealand
- Oldendorff Carriers - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Binh Thuan Hamico - Vietnam
- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Siam City Cement - Thailand
- Global Coal Blending Company Limited - Australia
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maharashtra Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Alfred C Toepfer International GmbH - Germany
- Lanco Infratech Ltd - India
- Baramulti Group, Indonesia
- Straits Asia Resources Limited - Singapore
- Africa Commodities Group - South Africa
- Sinarmas Energy and Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Ceylon Electricity Board - Sri Lanka
- Aditya Birla Group - India
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