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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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Wednesday, 13 November 19
INDONESIAN NOVEMBER COAL PRICE REFERENCE LOGS FIRST GAIN SINCE AUGUST
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised up the benchmark price of Indonesian thermal co ...
Wednesday, 13 November 19
SHIPPING MARKET INSIGHT - INTERMODAL
The improvements seen in the dry bulk market during the unexpectedly strong Q3 brought enthusiasm and optimism for a last quarter rally. Indeed as ...
Tuesday, 12 November 19
COAL IMPORTS AT MAJOR PORTS SLIP 18 PC TO 51 MT IN APRIL-OCTOBER - ECONOMIC TIMES
The Indian Ports Association (IPA), which maintains cargo data handled by these 12 ports, in its recent report, said "percentage variation fro ...
Monday, 11 November 19
EMINENT MARITIME ORGANIZATIONS AND INDIVIDUALS WERE HONORED
SHIPTEK 2019 Anchors in Greece for its 12th edition.
Eminent Maritime Organizations and Individuals were honored
Greec ...
Wednesday, 06 November 19
SHIPPING MARKET INSIGHT - INTERMODAL
With less than two months before the end of the year, the shipping and refining industries have already taken measures and invested to accommodate ...
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- PetroVietnam Power Coal Import and Supply Company
- Sical Logistics Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Orica Australia Pty. Ltd.
- Latin American Coal - Colombia
- Parry Sugars Refinery, India
- Georgia Ports Authority, United States
- Ministry of Finance - Indonesia
- Renaissance Capital - South Africa
- Rio Tinto Coal - Australia
- Malabar Cements Ltd - India
- Port Waratah Coal Services - Australia
- Altura Mining Limited, Indonesia
- Sree Jayajothi Cements Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- White Energy Company Limited
- Cigading International Bulk Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- SMG Consultants - Indonesia
- Heidelberg Cement - Germany
- Trasteel International SA, Italy
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- McConnell Dowell - Australia
- Mercator Lines Limited - India
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- Energy Development Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Electricity Authority, New Zealand
- Indian Energy Exchange, India
- Edison Trading Spa - Italy
- International Coal Ventures Pvt Ltd - India
- New Zealand Coal & Carbon
- Sojitz Corporation - Japan
- Billiton Holdings Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- India Bulls Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Marubeni Corporation - India
- IEA Clean Coal Centre - UK
- Kumho Petrochemical, South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Deloitte Consulting - India
- The University of Queensland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- CNBM International Corporation - China
- Bahari Cakrawala Sebuku - Indonesia
- PowerSource Philippines DevCo
- Siam City Cement - Thailand
- Bukit Baiduri Energy - Indonesia
- Vedanta Resources Plc - India
- Ceylon Electricity Board - Sri Lanka
- Attock Cement Pakistan Limited
- Coalindo Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Bangladesh Power Developement Board
- Metalloyd Limited - United Kingdom
- Samtan Co., Ltd - South Korea
- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Kartika Selabumi Mining - Indonesia
- Ministry of Mines - Canada
- MS Steel International - UAE
- Banpu Public Company Limited - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Madhucon Powers Ltd - India
- Star Paper Mills Limited - India
- OPG Power Generation Pvt Ltd - India
- Meralco Power Generation, Philippines
- Gujarat Sidhee Cement - India
- San Jose City I Power Corp, Philippines
- Orica Mining Services - Indonesia
- Intertek Mineral Services - Indonesia
- SMC Global Power, Philippines
- Timah Investasi Mineral - Indoneisa
- Indogreen Group - Indonesia
- Central Java Power - Indonesia
- Parliament of New Zealand
- Economic Council, Georgia
- Semirara Mining and Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Simpson Spence & Young - Indonesia
- Central Electricity Authority - India
- Siam City Cement PLC, Thailand
- IHS Mccloskey Coal Group - USA
- Videocon Industries ltd - India
- Riau Bara Harum - Indonesia
- Anglo American - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Thiess Contractors Indonesia
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- Eastern Coal Council - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Iligan Light & Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Makarim & Taira - Indonesia
- Tamil Nadu electricity Board
- VISA Power Limited - India
- Jaiprakash Power Ventures ltd
- TNB Fuel Sdn Bhd - Malaysia
- Goldman Sachs - Singapore
- Coastal Gujarat Power Limited - India
- PNOC Exploration Corporation - Philippines
- Eastern Energy - Thailand
- GMR Energy Limited - India
- Semirara Mining Corp, Philippines
- Tata Chemicals Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Kobexindo Tractors - Indoneisa
- Antam Resourcindo - Indonesia
- Commonwealth Bank - Australia
- Maharashtra Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Wilmar Investment Holdings
- Baramulti Group, Indonesia
- Australian Coal Association
- Vijayanagar Sugar Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Uttam Galva Steels Limited - India
- Sindya Power Generating Company Private Ltd
- Standard Chartered Bank - UAE
- Global Green Power PLC Corporation, Philippines
- Dalmia Cement Bharat India
- Australian Commodity Traders Exchange
- Lanco Infratech Ltd - India
- Savvy Resources Ltd - HongKong
- Romanian Commodities Exchange
- Merrill Lynch Commodities Europe
- Rashtriya Ispat Nigam Limited - India
- GVK Power & Infra Limited - India
- Interocean Group of Companies - India
- Singapore Mercantile Exchange
- Alfred C Toepfer International GmbH - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- South Luzon Thermal Energy Corporation
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- Kaltim Prima Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Pendopo Energi Batubara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thai Mozambique Logistica
- Sakthi Sugars Limited - India
- Planning Commission, India
- Bulk Trading Sa - Switzerland
- Meenaskhi Energy Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Indian Oil Corporation Limited
- Xindia Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Global Coal Blending Company Limited - Australia
- European Bulk Services B.V. - Netherlands
- Karaikal Port Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- The Treasury - Australian Government
- Indonesian Coal Mining Association
- ICICI Bank Limited - India
- Globalindo Alam Lestari - Indonesia
- Electricity Generating Authority of Thailand
- GAC Shipping (India) Pvt Ltd
- Mercuria Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- TeaM Sual Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Bhushan Steel Limited - India
- Binh Thuan Hamico - Vietnam
- London Commodity Brokers - England
- Jindal Steel & Power Ltd - India
- Independent Power Producers Association of India
- Larsen & Toubro Limited - India
- Chamber of Mines of South Africa
- Leighton Contractors Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Minerals Council of Australia
- PTC India Limited - India
- Posco Energy - South Korea
- ASAPP Information Group - India
- Ind-Barath Power Infra Limited - India
- Bhatia International Limited - India
- Oldendorff Carriers - Singapore
- Grasim Industreis Ltd - India
- Energy Link Ltd, New Zealand
- Mintek Dendrill Indonesia
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Barasentosa Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bharathi Cement Corporation - India
- SN Aboitiz Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Carbofer General Trading SA - India
- Medco Energi Mining Internasional
- Aditya Birla Group - India
- Holcim Trading Pte Ltd - Singapore
- Wood Mackenzie - Singapore
- Kepco SPC Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Agrawal Coal Company - India
- The State Trading Corporation of India Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Ambuja Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Indika Energy - Indonesia
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