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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, 18 June 15
MERCATOR'S KAMSARMAX FIXED WITH CLEARLAKE
COALspot.com: Mercator Lines (Singapore) Limited, a leading Indian-owned international dry bulk shipping company focused on markets such as India, ...
Wednesday, 17 June 15
PANAMAX RATE AVERAGED $22.82 PMT IN THE FIRST 10 DAYS OF JUNE FOR THE GRAIN ROUTE FROM SANTOS, BRAZIL, TO QINGDAO, CHINA - INTERMODAL
This year, Brazil will be exporting a record 96 million tons of soybean crop and starting in August the country will begin shipping a second corn c ...
Tuesday, 16 June 15
MERS: POTENTIAL CHARTERPARTY IMPLICATIONS - CLYDE & CO
KNOWLEDGE TO ELEVATE
South Korea's current outbreak of Middle East Respiratory Syndrome (MERS) has been the focus of much international at ...
Tuesday, 16 June 15
Q3 FOB INDONESIA COAL SWAP PRICE DOWN 50 CENTS OVER PAST WEEK
COALspot.com: Indonesian coal swap for delivery Q3 2015 gains month on month but declined week over week, this past week.
The Q3 swap was clim ...
Tuesday, 16 June 15
FOB RICHARDS BAY COAL SWAPS: PRICES MOVED UP ON THE WEEK
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q3' 2015 rose month over month and week over week.
The Q3 swap was up US$ 1.70 ...
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- Global Coal Blending Company Limited - Australia
- Coalindo Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Bhoruka Overseas - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Electricity Generating Authority of Thailand
- Savvy Resources Ltd - HongKong
- Meralco Power Generation, Philippines
- Formosa Plastics Group - Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Global Green Power PLC Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Aditya Birla Group - India
- Medco Energi Mining Internasional
- Madhucon Powers Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Heidelberg Cement - Germany
- South Luzon Thermal Energy Corporation
- PNOC Exploration Corporation - Philippines
- White Energy Company Limited
- Thiess Contractors Indonesia
- San Jose City I Power Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Grasim Industreis Ltd - India
- Karaikal Port Pvt Ltd - India
- Rio Tinto Coal - Australia
- Price Waterhouse Coopers - Russia
- Coal and Oil Company - UAE
- Lanco Infratech Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Iligan Light & Power Inc, Philippines
- Singapore Mercantile Exchange
- Xindia Steels Limited - India
- MS Steel International - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Indogreen Group - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Borneo Indobara - Indonesia
- Goldman Sachs - Singapore
- CNBM International Corporation - China
- Vedanta Resources Plc - India
- Deloitte Consulting - India
- Standard Chartered Bank - UAE
- Global Business Power Corporation, Philippines
- Petron Corporation, Philippines
- Australian Commodity Traders Exchange
- Vijayanagar Sugar Pvt Ltd - India
- India Bulls Power Limited - India
- Binh Thuan Hamico - Vietnam
- Kobexindo Tractors - Indoneisa
- European Bulk Services B.V. - Netherlands
- Bhushan Steel Limited - India
- Sindya Power Generating Company Private Ltd
- Toyota Tsusho Corporation, Japan
- Trasteel International SA, Italy
- Timah Investasi Mineral - Indoneisa
- Port Waratah Coal Services - Australia
- Thai Mozambique Logistica
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhatia International Limited - India
- Kepco SPC Power Corporation, Philippines
- Indonesian Coal Mining Association
- Merrill Lynch Commodities Europe
- Maharashtra Electricity Regulatory Commission - India
- Leighton Contractors Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Semirara Mining Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- GVK Power & Infra Limited - India
- Bulk Trading Sa - Switzerland
- Cement Manufacturers Association - India
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- Africa Commodities Group - South Africa
- Central Java Power - Indonesia
- Directorate Of Revenue Intelligence - India
- Eastern Coal Council - USA
- Uttam Galva Steels Limited - India
- Simpson Spence & Young - Indonesia
- Marubeni Corporation - India
- Minerals Council of Australia
- Orica Mining Services - Indonesia
- Latin American Coal - Colombia
- Posco Energy - South Korea
- The State Trading Corporation of India Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Maheswari Brothers Coal Limited - India
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- Electricity Authority, New Zealand
- Ind-Barath Power Infra Limited - India
- Barasentosa Lestari - Indonesia
- Ministry of Mines - Canada
- Interocean Group of Companies - India
- Economic Council, Georgia
- Energy Development Corp, Philippines
- Essar Steel Hazira Ltd - India
- Indo Tambangraya Megah - Indonesia
- Malabar Cements Ltd - India
- Wilmar Investment Holdings
- Wood Mackenzie - Singapore
- Edison Trading Spa - Italy
- GMR Energy Limited - India
- Dalmia Cement Bharat India
- Ceylon Electricity Board - Sri Lanka
- Bayan Resources Tbk. - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Indian Oil Corporation Limited
- Kohat Cement Company Ltd. - Pakistan
- Kartika Selabumi Mining - Indonesia
- Samtan Co., Ltd - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Banpu Public Company Limited - Thailand
- Agrawal Coal Company - India
- Aboitiz Power Corporation - Philippines
- ASAPP Information Group - India
- Mercator Lines Limited - India
- SN Aboitiz Power Inc, Philippines
- Tamil Nadu electricity Board
- Pipit Mutiara Jaya. PT, Indonesia
- Parry Sugars Refinery, India
- SMC Global Power, Philippines
- Krishnapatnam Port Company Ltd. - India
- VISA Power Limited - India
- Romanian Commodities Exchange
- Commonwealth Bank - Australia
- London Commodity Brokers - England
- Chamber of Mines of South Africa
- Indika Energy - Indonesia
- Vizag Seaport Private Limited - India
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- PowerSource Philippines DevCo
- Australian Coal Association
- Manunggal Multi Energi - Indonesia
- New Zealand Coal & Carbon
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- Mjunction Services Limited - India
- Tata Chemicals Ltd - India
- Indian Energy Exchange, India
- Eastern Energy - Thailand
- Jindal Steel & Power Ltd - India
- Pendopo Energi Batubara - Indonesia
- Sical Logistics Limited - India
- Ministry of Transport, Egypt
- Baramulti Group, Indonesia
- McConnell Dowell - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Attock Cement Pakistan Limited
- Meenaskhi Energy Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Siam City Cement - Thailand
- SMG Consultants - Indonesia
- Ministry of Finance - Indonesia
- Kumho Petrochemical, South Korea
- Billiton Holdings Pty Ltd - Australia
- Anglo American - United Kingdom
- Holcim Trading Pte Ltd - Singapore
- Parliament of New Zealand
- Siam City Cement PLC, Thailand
- Neyveli Lignite Corporation Ltd, - India
- Riau Bara Harum - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- Oldendorff Carriers - Singapore
- PTC India Limited - India
- Intertek Mineral Services - Indonesia
- Videocon Industries ltd - India
- The University of Queensland
- Independent Power Producers Association of India
- Bahari Cakrawala Sebuku - Indonesia
- Georgia Ports Authority, United States
- Power Finance Corporation Ltd., India
- Mintek Dendrill Indonesia
- Larsen & Toubro Limited - India
- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Planning Commission, India
- Gujarat Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Altura Mining Limited, Indonesia
- Orica Australia Pty. Ltd.
- Antam Resourcindo - Indonesia
- Ambuja Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Central Electricity Authority - India
- PetroVietnam Power Coal Import and Supply Company
- Directorate General of MIneral and Coal - Indonesia
- Star Paper Mills Limited - India
- Gujarat Sidhee Cement - India
- Sarangani Energy Corporation, Philippines
- IEA Clean Coal Centre - UK
- Coastal Gujarat Power Limited - India
- Bangladesh Power Developement Board
- AsiaOL BioFuels Corp., Philippines
- TeaM Sual Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Carbofer General Trading SA - India
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