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