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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 December 18
CHINA REVISES MANAGEMENT RULES ON ESTABLISHMENT OF FULLY FOREIGN-OWNED SHIPPING BUSINESSES - XINHUA
Foreign shipping companies will find it easier to establish wholly-owned subsidiaries in China thanks to a revised regulation due to take effect on ...
Wednesday, 05 December 18
WORLD COAL PRICES FALL, WITH INDONESIA BENCHMARK FOR DECEMBER, ENDING AT LOWEST SINCE JUNE 2018
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Wednesday, 05 December 18
SHIPPING MARKET INSIGHT - GIANNIS ANDRITSOPOULOS
Is the rise in crude carrier rates driven only by seasonality, or is the recent positive reversal signaling the end of challenging days for the mar ...
Monday, 03 December 18
WCA'S ENGAGEMENT AT COP24 IN KATOWICE - WCA
The 24th Conference of the Parties (COP) to the UN Framework Convention on Climate Change (UNFCCC) will take place from the 2-14 December 2018 in K ...
Monday, 03 December 18
SUPRAMAX: FIXED DELIVERY KALIMANTAN TO WEST COAST INDIA, AT $11000 - THE BALTIC BRIEFING
Capesize
A roller-coaster week for the big ships with hopes soaring at the start for a mini last quarter revival, only to be dashed as the week ...
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- Vizag Seaport Private Limited - India
- Straits Asia Resources Limited - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Independent Power Producers Association of India
- Mercuria Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bukit Makmur.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Latin American Coal - Colombia
- Simpson Spence & Young - Indonesia
- International Coal Ventures Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Tata Chemicals Ltd - India
- OPG Power Generation Pvt Ltd - India
- India Bulls Power Limited - India
- Standard Chartered Bank - UAE
- Karaikal Port Pvt Ltd - India
- Tamil Nadu electricity Board
- Energy Development Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Edison Trading Spa - Italy
- Renaissance Capital - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Indian Oil Corporation Limited
- Port Waratah Coal Services - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Metalloyd Limited - United Kingdom
- VISA Power Limited - India
- Georgia Ports Authority, United States
- Attock Cement Pakistan Limited
- Iligan Light & Power Inc, Philippines
- Coal and Oil Company - UAE
- Singapore Mercantile Exchange
- GN Power Mariveles Coal Plant, Philippines
- Sindya Power Generating Company Private Ltd
- South Luzon Thermal Energy Corporation
- Bharathi Cement Corporation - India
- Petron Corporation, Philippines
- Oldendorff Carriers - Singapore
- Economic Council, Georgia
- European Bulk Services B.V. - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Aditya Birla Group - India
- Australian Coal Association
- Planning Commission, India
- Karbindo Abesyapradhi - Indoneisa
- CIMB Investment Bank - Malaysia
- Agrawal Coal Company - India
- Videocon Industries ltd - India
- Manunggal Multi Energi - Indonesia
- Ministry of Mines - Canada
- Indogreen Group - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Maheswari Brothers Coal Limited - India
- London Commodity Brokers - England
- Star Paper Mills Limited - India
- CNBM International Corporation - China
- White Energy Company Limited
- Global Business Power Corporation, Philippines
- Grasim Industreis Ltd - India
- PowerSource Philippines DevCo
- Coastal Gujarat Power Limited - India
- Eastern Energy - Thailand
- Posco Energy - South Korea
- LBH Netherlands Bv - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- SMG Consultants - Indonesia
- Sical Logistics Limited - India
- Rio Tinto Coal - Australia
- Bhushan Steel Limited - India
- Barasentosa Lestari - Indonesia
- Ministry of Finance - Indonesia
- Deloitte Consulting - India
- PTC India Limited - India
- Chettinad Cement Corporation Ltd - India
- Vedanta Resources Plc - India
- Indian Energy Exchange, India
- Kumho Petrochemical, South Korea
- Global Coal Blending Company Limited - Australia
- Petrochimia International Co. Ltd.- Taiwan
- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
- Kobexindo Tractors - Indoneisa
- Samtan Co., Ltd - South Korea
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wilmar Investment Holdings
- Sojitz Corporation - Japan
- Trasteel International SA, Italy
- Thai Mozambique Logistica
- Ambuja Cements Ltd - India
- Cement Manufacturers Association - India
- Parry Sugars Refinery, India
- Jaiprakash Power Ventures ltd
- Bhoruka Overseas - Indonesia
- Sarangani Energy Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Pipit Mutiara Jaya. PT, Indonesia
- Kepco SPC Power Corporation, Philippines
- Central Java Power - Indonesia
- Bukit Baiduri Energy - Indonesia
- Interocean Group of Companies - India
- Vijayanagar Sugar Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Mjunction Services Limited - India
- Lanco Infratech Ltd - India
- Siam City Cement - Thailand
- Gujarat Mineral Development Corp Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Commonwealth Bank - Australia
- Central Electricity Authority - India
- Riau Bara Harum - Indonesia
- The Treasury - Australian Government
- Price Waterhouse Coopers - Russia
- Minerals Council of Australia
- Carbofer General Trading SA - India
- ICICI Bank Limited - India
- Larsen & Toubro Limited - India
- Power Finance Corporation Ltd., India
- Krishnapatnam Port Company Ltd. - India
- Coalindo Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Africa Commodities Group - South Africa
- Kalimantan Lumbung Energi - Indonesia
- SMC Global Power, Philippines
- Aboitiz Power Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mintek Dendrill Indonesia
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Malabar Cements Ltd - India
- Borneo Indobara - Indonesia
- Globalindo Alam Lestari - Indonesia
- Meralco Power Generation, Philippines
- The State Trading Corporation of India Ltd
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- Timah Investasi Mineral - Indoneisa
- Global Green Power PLC Corporation, Philippines
- MS Steel International - UAE
- Jindal Steel & Power Ltd - India
- PNOC Exploration Corporation - Philippines
- Orica Mining Services - Indonesia
- Binh Thuan Hamico - Vietnam
- Gujarat Sidhee Cement - India
- Gujarat Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Intertek Mineral Services - Indonesia
- Mercator Lines Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Marubeni Corporation - India
- ASAPP Information Group - India
- San Jose City I Power Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Eastern Coal Council - USA
- Anglo American - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Kartika Selabumi Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Parliament of New Zealand
- Toyota Tsusho Corporation, Japan
- Uttam Galva Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
- Sakthi Sugars Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Electricity Generating Authority of Thailand
- Orica Australia Pty. Ltd.
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- Altura Mining Limited, Indonesia
- GMR Energy Limited - India
- Makarim & Taira - Indonesia
- Merrill Lynch Commodities Europe
- Kaltim Prima Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Antam Resourcindo - Indonesia
- Romanian Commodities Exchange
- The University of Queensland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Formosa Plastics Group - Taiwan
- Thiess Contractors Indonesia
- Sree Jayajothi Cements Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Medco Energi Mining Internasional
- Bangladesh Power Developement Board
- Banpu Public Company Limited - Thailand
- Ministry of Transport, Egypt
- Savvy Resources Ltd - HongKong
- McConnell Dowell - Australia
- Madhucon Powers Ltd - India
- IHS Mccloskey Coal Group - USA
- Energy Link Ltd, New Zealand
- GVK Power & Infra Limited - India
- Baramulti Group, Indonesia
- Goldman Sachs - Singapore
- Therma Luzon, Inc, Philippines
- Xindia Steels Limited - India
- Chamber of Mines of South Africa
- Bulk Trading Sa - Switzerland
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
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