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