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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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Tuesday, 01 March 16
CAN BULKCARRIER SUPPLY CUTS RESTORE SOME BALANCE? - CLARKSONS
The easing in bulkcarrier deliveries and the accelerated pace of demolition in recent years has seen bulkcarrier fleet growth slow from a rapid 17% ...
Monday, 29 February 16
BALTIC INDEX INCHES UP THIS PAST WEEK AS SMALLER VESSELS LEND SUPPORT
COALspot.com: The freight markets rose slightly this past week.
The Baltic Dry Index (BDI) of dry-bulk shipping freights, a measure of global ...
Monday, 29 February 16
LOSS OF EARNINGS IN THE WAKE OF A COLLISION - GARD
KNOWLEDGE TO ELEVATE
A shipowner’s loss of earnings can form a significant part of a collision claim. Awareness of the ways of calculati ...
Friday, 26 February 16
U.S WEEKLY COAL PRODUCTION UP SLIGHTLY
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 13.4 million shor ...
Thursday, 25 February 16
DRY BULKERS ARE SCRAPPED AT RECORD PACE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The newbuilding market is at a lull these days, as ship owners are focusing on two fronts, getting rid of excess dry bulk tonnage and snapping up b ...
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- Thiess Contractors Indonesia
- Standard Chartered Bank - UAE
- Kohat Cement Company Ltd. - Pakistan
- PTC India Limited - India
- Mjunction Services Limited - India
- Sical Logistics Limited - India
- Global Coal Blending Company Limited - Australia
- Jorong Barutama Greston.PT - Indonesia
- VISA Power Limited - India
- Sojitz Corporation - Japan
- Globalindo Alam Lestari - Indonesia
- Energy Link Ltd, New Zealand
- Barasentosa Lestari - Indonesia
- SMG Consultants - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Deloitte Consulting - India
- Gujarat Mineral Development Corp Ltd - India
- Kumho Petrochemical, South Korea
- Kideco Jaya Agung - Indonesia
- Aditya Birla Group - India
- Wilmar Investment Holdings
- Power Finance Corporation Ltd., India
- Bulk Trading Sa - Switzerland
- Chamber of Mines of South Africa
- India Bulls Power Limited - India
- Antam Resourcindo - Indonesia
- SMC Global Power, Philippines
- Global Business Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Mining Services - Indonesia
- Coal and Oil Company - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ASAPP Information Group - India
- The State Trading Corporation of India Ltd
- Karaikal Port Pvt Ltd - India
- Agrawal Coal Company - India
- South Luzon Thermal Energy Corporation
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Georgia Ports Authority, United States
- Independent Power Producers Association of India
- Renaissance Capital - South Africa
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- GVK Power & Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Eastern Coal Council - USA
- Orica Australia Pty. Ltd.
- Medco Energi Mining Internasional
- Chettinad Cement Corporation Ltd - India
- PowerSource Philippines DevCo
- Kobexindo Tractors - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Jaiprakash Power Ventures ltd
- Bayan Resources Tbk. - Indonesia
- Energy Development Corp, Philippines
- Intertek Mineral Services - Indonesia
- Madhucon Powers Ltd - India
- Bukit Baiduri Energy - Indonesia
- Tamil Nadu electricity Board
- New Zealand Coal & Carbon
- Sinarmas Energy and Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bhatia International Limited - India
- Coastal Gujarat Power Limited - India
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kapuas Tunggal Persada - Indonesia
- Wood Mackenzie - Singapore
- Dalmia Cement Bharat India
- Neyveli Lignite Corporation Ltd, - India
- Bhoruka Overseas - Indonesia
- Meenaskhi Energy Private Limited - India
- Indonesian Coal Mining Association
- Anglo American - United Kingdom
- Electricity Generating Authority of Thailand
- European Bulk Services B.V. - Netherlands
- GMR Energy Limited - India
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- The University of Queensland
- Indika Energy - Indonesia
- Trasteel International SA, Italy
- PNOC Exploration Corporation - Philippines
- Vizag Seaport Private Limited - India
- Bharathi Cement Corporation - India
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Cement Manufacturers Association - India
- Simpson Spence & Young - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- San Jose City I Power Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Merrill Lynch Commodities Europe
- CNBM International Corporation - China
- Straits Asia Resources Limited - Singapore
- CIMB Investment Bank - Malaysia
- Samtan Co., Ltd - South Korea
- Aboitiz Power Corporation - Philippines
- Parry Sugars Refinery, India
- PetroVietnam Power Coal Import and Supply Company
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Mines - Canada
- ICICI Bank Limited - India
- Semirara Mining Corp, Philippines
- Australian Coal Association
- Minerals Council of Australia
- Tata Chemicals Ltd - India
- The Treasury - Australian Government
- Jindal Steel & Power Ltd - India
- Coalindo Energy - Indonesia
- Planning Commission, India
- Timah Investasi Mineral - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Sindya Power Generating Company Private Ltd
- Price Waterhouse Coopers - Russia
- Grasim Industreis Ltd - India
- Goldman Sachs - Singapore
- Port Waratah Coal Services - Australia
- Meralco Power Generation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement - Thailand
- Carbofer General Trading SA - India
- AsiaOL BioFuels Corp., Philippines
- Therma Luzon, Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Oldendorff Carriers - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Commonwealth Bank - Australia
- Videocon Industries ltd - India
- TeaM Sual Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Iligan Light & Power Inc, Philippines
- White Energy Company Limited
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Vedanta Resources Plc - India
- Formosa Plastics Group - Taiwan
- Directorate Of Revenue Intelligence - India
- Ministry of Transport, Egypt
- Africa Commodities Group - South Africa
- Holcim Trading Pte Ltd - Singapore
- Asmin Koalindo Tuhup - Indonesia
- IEA Clean Coal Centre - UK
- Toyota Tsusho Corporation, Japan
- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- LBH Netherlands Bv - Netherlands
- Marubeni Corporation - India
- Heidelberg Cement - Germany
- Gujarat Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Posco Energy - South Korea
- Sree Jayajothi Cements Limited - India
- McConnell Dowell - Australia
- Baramulti Group, Indonesia
- Gujarat Sidhee Cement - India
- Savvy Resources Ltd - HongKong
- Ind-Barath Power Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Australian Commodity Traders Exchange
- Global Green Power PLC Corporation, Philippines
- Attock Cement Pakistan Limited
- Indian Oil Corporation Limited
- GN Power Mariveles Coal Plant, Philippines
- Bangladesh Power Developement Board
- Ministry of Finance - Indonesia
- Sakthi Sugars Limited - India
- Ambuja Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhushan Steel Limited - India
- Kaltim Prima Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Latin American Coal - Colombia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Singapore Mercantile Exchange
- Karbindo Abesyapradhi - Indoneisa
- Central Electricity Authority - India
- Siam City Cement PLC, Thailand
- Romanian Commodities Exchange
- Manunggal Multi Energi - Indonesia
- Economic Council, Georgia
- MS Steel International - UAE
- Lanco Infratech Ltd - India
- Uttam Galva Steels Limited - India
- London Commodity Brokers - England
- Altura Mining Limited, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Star Paper Mills Limited - India
- Parliament of New Zealand
- Electricity Authority, New Zealand
- Edison Trading Spa - Italy
- Petron Corporation, Philippines
- Thai Mozambique Logistica
- Essar Steel Hazira Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- Xindia Steels Limited - India
- Indian Energy Exchange, India
- Rio Tinto Coal - Australia
- Eastern Energy - Thailand
- Indo Tambangraya Megah - Indonesia
- Mercuria Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indogreen Group - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Interocean Group of Companies - India
- Mintek Dendrill Indonesia
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