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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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Saturday, 10 February 18
OIL PRICE USD 100/BARREL BY END OF 2018! - SAROJ MOHAPATRA
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Friday, 09 February 18
COAL BUYERS SPOOKED BY INDONESIA'S NEW SHIPPING RULES - ASSOC
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Thursday, 08 February 18
A NEW WEEK WITH A SOFT SENTIMENT AND DECREASING RATES IN BOTH HEMISPHERE FOR THE PANAMAXES, SAYS FEARNLEYS
Supramax
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Wednesday, 07 February 18
INDONESIAN COAL PRICE REFERENCE RISES TO HIT THIRTEEN-MONTH HIGH OF $100.69 A TON
COALspot.com: The Indonesian Coal Price Reference (HBA) rose 5.39 per cent in February 2018, the latest ministerial decree showed.
The benchma ...
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- Price Waterhouse Coopers - Russia
- VISA Power Limited - India
- Interocean Group of Companies - India
- Romanian Commodities Exchange
- Orica Australia Pty. Ltd.
- Oldendorff Carriers - Singapore
- Attock Cement Pakistan Limited
- International Coal Ventures Pvt Ltd - India
- Altura Mining Limited, Indonesia
- London Commodity Brokers - England
- Bhatia International Limited - India
- Indo Tambangraya Megah - Indonesia
- Iligan Light & Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Bulk Trading Sa - Switzerland
- Metalloyd Limited - United Kingdom
- Tamil Nadu electricity Board
- Intertek Mineral Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Ministry of Transport, Egypt
- Sical Logistics Limited - India
- Xindia Steels Limited - India
- Australian Commodity Traders Exchange
- Chettinad Cement Corporation Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- Planning Commission, India
- Eastern Energy - Thailand
- Chamber of Mines of South Africa
- McConnell Dowell - Australia
- Ministry of Mines - Canada
- Madhucon Powers Ltd - India
- Edison Trading Spa - Italy
- Videocon Industries ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Indian Energy Exchange, India
- Orica Mining Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- GMR Energy Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Sinarmas Energy and Mining - Indonesia
- Samtan Co., Ltd - South Korea
- The Treasury - Australian Government
- Binh Thuan Hamico - Vietnam
- Trasteel International SA, Italy
- Star Paper Mills Limited - India
- Kobexindo Tractors - Indoneisa
- Indian Oil Corporation Limited
- TeaM Sual Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- Pendopo Energi Batubara - Indonesia
- Directorate Of Revenue Intelligence - India
- Thai Mozambique Logistica
- Aboitiz Power Corporation - Philippines
- Energy Development Corp, Philippines
- Medco Energi Mining Internasional
- Marubeni Corporation - India
- GAC Shipping (India) Pvt Ltd
- Gujarat Sidhee Cement - India
- Bukit Makmur.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Wilmar Investment Holdings
- Kideco Jaya Agung - Indonesia
- Dalmia Cement Bharat India
- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Economic Council, Georgia
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Formosa Plastics Group - Taiwan
- Indogreen Group - Indonesia
- India Bulls Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Posco Energy - South Korea
- Kalimantan Lumbung Energi - Indonesia
- SMC Global Power, Philippines
- Grasim Industreis Ltd - India
- Agrawal Coal Company - India
- PTC India Limited - India
- Miang Besar Coal Terminal - Indonesia
- Africa Commodities Group - South Africa
- Deloitte Consulting - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Minerals Council of Australia
- Rashtriya Ispat Nigam Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- CIMB Investment Bank - Malaysia
- Bharathi Cement Corporation - India
- Parliament of New Zealand
- Rio Tinto Coal - Australia
- Independent Power Producers Association of India
- Kohat Cement Company Ltd. - Pakistan
- Central Java Power - Indonesia
- Lanco Infratech Ltd - India
- SN Aboitiz Power Inc, Philippines
- Electricity Authority, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Banpu Public Company Limited - Thailand
- South Luzon Thermal Energy Corporation
- Kaltim Prima Coal - Indonesia
- The State Trading Corporation of India Ltd
- Mjunction Services Limited - India
- Port Waratah Coal Services - Australia
- Ind-Barath Power Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Sakthi Sugars Limited - India
- IEA Clean Coal Centre - UK
- Australian Coal Association
- Commonwealth Bank - Australia
- PNOC Exploration Corporation - Philippines
- Borneo Indobara - Indonesia
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- Kepco SPC Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Bhushan Steel Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Coastal Gujarat Power Limited - India
- Aditya Birla Group - India
- Tata Chemicals Ltd - India
- Toyota Tsusho Corporation, Japan
- Petron Corporation, Philippines
- Heidelberg Cement - Germany
- Meralco Power Generation, Philippines
- Carbofer General Trading SA - India
- Ceylon Electricity Board - Sri Lanka
- OPG Power Generation Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- SMG Consultants - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Larsen & Toubro Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kumho Petrochemical, South Korea
- Directorate General of MIneral and Coal - Indonesia
- Renaissance Capital - South Africa
- Sindya Power Generating Company Private Ltd
- Asmin Koalindo Tuhup - Indonesia
- Anglo American - United Kingdom
- Central Electricity Authority - India
- Therma Luzon, Inc, Philippines
- MS Steel International - UAE
- GVK Power & Infra Limited - India
- Latin American Coal - Colombia
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- Singapore Mercantile Exchange
- Gujarat Mineral Development Corp Ltd - India
- Meenaskhi Energy Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Indika Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Electricity Generating Authority of Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- IHS Mccloskey Coal Group - USA
- White Energy Company Limited
- Cement Manufacturers Association - India
- Global Coal Blending Company Limited - Australia
- Leighton Contractors Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Mintek Dendrill Indonesia
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- Antam Resourcindo - Indonesia
- Barasentosa Lestari - Indonesia
- Goldman Sachs - Singapore
- European Bulk Services B.V. - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- PowerSource Philippines DevCo
- Standard Chartered Bank - UAE
- Neyveli Lignite Corporation Ltd, - India
- CNBM International Corporation - China
- Mercuria Energy - Indonesia
- Uttam Galva Steels Limited - India
- Jindal Steel & Power Ltd - India
- Thiess Contractors Indonesia
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- Coal and Oil Company - UAE
- Ambuja Cements Ltd - India
- Energy Link Ltd, New Zealand
- Malabar Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Makarim & Taira - Indonesia
- Bangladesh Power Developement Board
- Petrochimia International Co. Ltd.- Taiwan
- Riau Bara Harum - Indonesia
- Siam City Cement PLC, Thailand
- Kartika Selabumi Mining - Indonesia
- Vedanta Resources Plc - India
- Jorong Barutama Greston.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement - Thailand
- Bhoruka Overseas - Indonesia
- Salva Resources Pvt Ltd - India
- Mercator Lines Limited - India
- New Zealand Coal & Carbon
- LBH Netherlands Bv - Netherlands
- Bukit Baiduri Energy - Indonesia
- Sojitz Corporation - Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cigading International Bulk Terminal - Indonesia
- Baramulti Group, Indonesia
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