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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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- Indonesian Coal Mining Association
- Vedanta Resources Plc - India
- Pendopo Energi Batubara - Indonesia
- Rio Tinto Coal - Australia
- Jindal Steel & Power Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Mintek Dendrill Indonesia
- Leighton Contractors Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Energy - Thailand
- OPG Power Generation Pvt Ltd - India
- Bhatia International Limited - India
- San Jose City I Power Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Parliament of New Zealand
- Straits Asia Resources Limited - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Trasteel International SA, Italy
- ASAPP Information Group - India
- Iligan Light & Power Inc, Philippines
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Central Java Power - Indonesia
- Indian Oil Corporation Limited
- Madhucon Powers Ltd - India
- PowerSource Philippines DevCo
- Africa Commodities Group - South Africa
- Uttam Galva Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Edison Trading Spa - Italy
- Directorate Of Revenue Intelligence - India
- Electricity Generating Authority of Thailand
- Latin American Coal - Colombia
- Kumho Petrochemical, South Korea
- CIMB Investment Bank - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tata Chemicals Ltd - India
- Meenaskhi Energy Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- Binh Thuan Hamico - Vietnam
- Economic Council, Georgia
- Electricity Authority, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Lanco Infratech Ltd - India
- Kideco Jaya Agung - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Australian Coal Association
- Sical Logistics Limited - India
- Commonwealth Bank - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Georgia Ports Authority, United States
- Bulk Trading Sa - Switzerland
- TeaM Sual Corporation - Philippines
- Bhushan Steel Limited - India
- MS Steel International - UAE
- Essar Steel Hazira Ltd - India
- Bhoruka Overseas - Indonesia
- The Treasury - Australian Government
- Altura Mining Limited, Indonesia
- SMG Consultants - Indonesia
- Ministry of Mines - Canada
- White Energy Company Limited
- Kaltim Prima Coal - Indonesia
- Central Electricity Authority - India
- Kapuas Tunggal Persada - Indonesia
- Bharathi Cement Corporation - India
- PTC India Limited - India
- Bukit Baiduri Energy - Indonesia
- Carbofer General Trading SA - India
- Krishnapatnam Port Company Ltd. - India
- Port Waratah Coal Services - Australia
- Energy Development Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Jaiprakash Power Ventures ltd
- Mercator Lines Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Interocean Group of Companies - India
- Sarangani Energy Corporation, Philippines
- Eastern Coal Council - USA
- Ministry of Transport, Egypt
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- Salva Resources Pvt Ltd - India
- Posco Energy - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Independent Power Producers Association of India
- Directorate General of MIneral and Coal - Indonesia
- Heidelberg Cement - Germany
- Renaissance Capital - South Africa
- Wilmar Investment Holdings
- Wood Mackenzie - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Orica Australia Pty. Ltd.
- Larsen & Toubro Limited - India
- VISA Power Limited - India
- Anglo American - United Kingdom
- Energy Link Ltd, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- South Luzon Thermal Energy Corporation
- Minerals Council of Australia
- Gujarat Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Kepco SPC Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Singapore Mercantile Exchange
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- Baramulti Group, Indonesia
- Semirara Mining Corp, Philippines
- Standard Chartered Bank - UAE
- Intertek Mineral Services - Indonesia
- Sakthi Sugars Limited - India
- Star Paper Mills Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Bangladesh Power Developement Board
- IHS Mccloskey Coal Group - USA
- Cement Manufacturers Association - India
- Marubeni Corporation - India
- Savvy Resources Ltd - HongKong
- Siam City Cement - Thailand
- Planning Commission, India
- Thiess Contractors Indonesia
- Bayan Resources Tbk. - Indonesia
- Antam Resourcindo - Indonesia
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Attock Cement Pakistan Limited
- Medco Energi Mining Internasional
- Oldendorff Carriers - Singapore
- PNOC Exploration Corporation - Philippines
- Power Finance Corporation Ltd., India
- Bukit Makmur.PT - Indonesia
- Banpu Public Company Limited - Thailand
- GMR Energy Limited - India
- Orica Mining Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Gujarat Mineral Development Corp Ltd - India
- Indika Energy - Indonesia
- Sojitz Corporation - Japan
- Ministry of Finance - Indonesia
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- Formosa Plastics Group - Taiwan
- Globalindo Alam Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Parry Sugars Refinery, India
- Karaikal Port Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Xindia Steels Limited - India
- New Zealand Coal & Carbon
- Metalloyd Limited - United Kingdom
- Goldman Sachs - Singapore
- Coalindo Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Merrill Lynch Commodities Europe
- Borneo Indobara - Indonesia
- Kobexindo Tractors - Indoneisa
- GVK Power & Infra Limited - India
- Thai Mozambique Logistica
- Jorong Barutama Greston.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- Maheswari Brothers Coal Limited - India
- Tamil Nadu electricity Board
- London Commodity Brokers - England
- Agrawal Coal Company - India
- Ambuja Cements Ltd - India
- ICICI Bank Limited - India
- Siam City Cement PLC, Thailand
- Indogreen Group - Indonesia
- Riau Bara Harum - Indonesia
- Meralco Power Generation, Philippines
- Australian Commodity Traders Exchange
- Price Waterhouse Coopers - Russia
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Mjunction Services Limited - India
- Indo Tambangraya Megah - Indonesia
- Indian Energy Exchange, India
- Chettinad Cement Corporation Ltd - India
- Coastal Gujarat Power Limited - India
- Barasentosa Lestari - Indonesia
- Dalmia Cement Bharat India
- SN Aboitiz Power Inc, Philippines
- Deloitte Consulting - India
- CNBM International Corporation - China
- Manunggal Multi Energi - Indonesia
- Makarim & Taira - Indonesia
- The University of Queensland
- Chamber of Mines of South Africa
- Global Coal Blending Company Limited - Australia
- Aditya Birla Group - India
- IEA Clean Coal Centre - UK
- Sree Jayajothi Cements Limited - India
- Cigading International Bulk Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Mercuria Energy - Indonesia
- Coal and Oil Company - UAE
- GN Power Mariveles Coal Plant, Philippines
- Billiton Holdings Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Petron Corporation, Philippines
- McConnell Dowell - Australia
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