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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, 11 January 19
SUPRAMAX: THE ASIAN ARENA HAD A MIXED START; LIMITED ACTION IN SOUTHEAST ASIA - THE BALTIC BRIEFING
Capesize
Dashed hopes summed up the first full week of the New Year. A slow start followed by a busy 24 hours of improving rates and a firming ...
Thursday, 10 January 19
BUNKER DELIVERY NOTE AMENDMENTS ENTER INTO FORCE AS SULPHUR 2020 REQUIREMENT LOOMS - IMO
KNOWLEDGE TO ELEVATE
Amendments to the bunker delivery note relating to the supply of marine fuel oil to ships which have fitted alternative m ...
Thursday, 10 January 19
WORLD TRADE IN THERMAL COAL IS ESTIMATED TO HAVE GROWN BY 1.0 PER CENT IN 2018 - DEPARTMENT OF INDUSTRY, AUSTRALIA
World Trade
World trade in thermal coal is estimated to have grown by 1.0 per cent to 1.1 billion tonnes in 2018 but it is expected to decline ...
Thursday, 10 January 19
PAKISTAN'S COAL IMPORTS TO SURGE TO 30 MILLION TONS PER ANNUM BY 2020 - CEO, PIB
Pakistan’s coal imports are estimated to surge to 30 million tons/annum from existing 20 million tons/annum by the year 2020, given the plann ...
Wednesday, 09 January 19
PANAMAX: THE PACIFIC SAW RELATIVELY GOOD DEMAND PARTICULARLY FROM INDONESIA AND NOPAC - BALTIC BRIEFING
Capesize
It was an active start to the New Year, with trading from West Australia maintaining momentum during the holiday period. Rates for Chi ...
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- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Grasim Industreis Ltd - India
- Parliament of New Zealand
- Star Paper Mills Limited - India
- Gujarat Sidhee Cement - India
- Indonesian Coal Mining Association
- SMC Global Power, Philippines
- Central Java Power - Indonesia
- LBH Netherlands Bv - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- IEA Clean Coal Centre - UK
- Oldendorff Carriers - Singapore
- Bulk Trading Sa - Switzerland
- Semirara Mining Corp, Philippines
- Thiess Contractors Indonesia
- Xindia Steels Limited - India
- The University of Queensland
- Electricity Authority, New Zealand
- Antam Resourcindo - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Globalindo Alam Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Electricity Generating Authority of Thailand
- GN Power Mariveles Coal Plant, Philippines
- Ambuja Cements Ltd - India
- Indogreen Group - Indonesia
- Eastern Energy - Thailand
- IHS Mccloskey Coal Group - USA
- Coalindo Energy - Indonesia
- Wilmar Investment Holdings
- Kalimantan Lumbung Energi - Indonesia
- Minerals Council of Australia
- Siam City Cement - Thailand
- Aditya Birla Group - India
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Chettinad Cement Corporation Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Petron Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Australian Commodity Traders Exchange
- Simpson Spence & Young - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Price Waterhouse Coopers - Russia
- Semirara Mining and Power Corporation, Philippines
- Bhatia International Limited - India
- Commonwealth Bank - Australia
- Neyveli Lignite Corporation Ltd, - India
- Thai Mozambique Logistica
- Global Coal Blending Company Limited - Australia
- Asmin Koalindo Tuhup - Indonesia
- Latin American Coal - Colombia
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
- Kartika Selabumi Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parry Sugars Refinery, India
- Mercuria Energy - Indonesia
- Wood Mackenzie - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Planning Commission, India
- Indika Energy - Indonesia
- Energy Development Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- ASAPP Information Group - India
- Mercator Lines Limited - India
- Sinarmas Energy and Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- GMR Energy Limited - India
- GAC Shipping (India) Pvt Ltd
- Marubeni Corporation - India
- Central Electricity Authority - India
- Essar Steel Hazira Ltd - India
- Ministry of Mines - Canada
- Ind-Barath Power Infra Limited - India
- India Bulls Power Limited - India
- CIMB Investment Bank - Malaysia
- Cement Manufacturers Association - India
- Cigading International Bulk Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- Vizag Seaport Private Limited - India
- Bukit Makmur.PT - Indonesia
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- Pendopo Energi Batubara - Indonesia
- Bangladesh Power Developement Board
- Petrochimia International Co. Ltd.- Taiwan
- Indian Oil Corporation Limited
- Madhucon Powers Ltd - India
- Kepco SPC Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Ministry of Finance - Indonesia
- Directorate Of Revenue Intelligence - India
- Energy Link Ltd, New Zealand
- New Zealand Coal & Carbon
- Altura Mining Limited, Indonesia
- Indian Energy Exchange, India
- Coastal Gujarat Power Limited - India
- Bhoruka Overseas - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Riau Bara Harum - Indonesia
- Merrill Lynch Commodities Europe
- Maheswari Brothers Coal Limited - India
- South Luzon Thermal Energy Corporation
- Malabar Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Formosa Plastics Group - Taiwan
- Bayan Resources Tbk. - Indonesia
- Interocean Group of Companies - India
- Orica Australia Pty. Ltd.
- Uttam Galva Steels Limited - India
- CNBM International Corporation - China
- Holcim Trading Pte Ltd - Singapore
- PowerSource Philippines DevCo
- Leighton Contractors Pty Ltd - Australia
- Anglo American - United Kingdom
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- Coal and Oil Company - UAE
- ICICI Bank Limited - India
- Global Green Power PLC Corporation, Philippines
- GVK Power & Infra Limited - India
- Jindal Steel & Power Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Videocon Industries ltd - India
- Manunggal Multi Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- McConnell Dowell - Australia
- Mintek Dendrill Indonesia
- Africa Commodities Group - South Africa
- VISA Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Australian Coal Association
- San Jose City I Power Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Orica Mining Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Meralco Power Generation, Philippines
- Standard Chartered Bank - UAE
- Sical Logistics Limited - India
- PTC India Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- MS Steel International - UAE
- Karaikal Port Pvt Ltd - India
- Deloitte Consulting - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Lanco Infratech Ltd - India
- Baramulti Group, Indonesia
- Bhushan Steel Limited - India
- Intertek Mineral Services - Indonesia
- The State Trading Corporation of India Ltd
- Binh Thuan Hamico - Vietnam
- Medco Energi Mining Internasional
- Sindya Power Generating Company Private Ltd
- Bukit Baiduri Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Directorate General of MIneral and Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
- Borneo Indobara - Indonesia
- London Commodity Brokers - England
- Savvy Resources Ltd - HongKong
- Trasteel International SA, Italy
- White Energy Company Limited
- Rio Tinto Coal - Australia
- Independent Power Producers Association of India
- Singapore Mercantile Exchange
- Vedanta Resources Plc - India
- Larsen & Toubro Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Edison Trading Spa - Italy
- Heidelberg Cement - Germany
- Iligan Light & Power Inc, Philippines
- Carbofer General Trading SA - India
- Barasentosa Lestari - Indonesia
- Sojitz Corporation - Japan
- Straits Asia Resources Limited - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Salva Resources Pvt Ltd - India
- Ministry of Transport, Egypt
- SMG Consultants - Indonesia
- Bharathi Cement Corporation - India
- Kaltim Prima Coal - Indonesia
- Renaissance Capital - South Africa
- Eastern Coal Council - USA
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- OPG Power Generation Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Romanian Commodities Exchange
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
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