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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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Sunday, 30 November 14
SUPRAMAX COAL FREIGHT RATES FROM INDONESIA TO INDIA : FIRM
COALspot.com: The BDI fell 171 points and closed at 1153 points on Friday 28 November 2014. The Cape index also lost 887 points and closed at 2151 ...
Friday, 28 November 14
NEW BIMCO CLAUSE AIMS TO REDUCE SUPPLIERS' RELIANCE ON SHIP ARREST FOR CHARTERERS' UNPAID BUNKERS
KNOWLEDGE TO ELEVATE
Ship owners can, on occasion, find themselves in the invidious position of suffering unexpected loss of hire due to a tim ...
Friday, 28 November 14
JSW ENERGY AND GRM RESOURCES JOIN GLOBALCOAL
COALspot.com: globalCOAL® announced yesterday that two new Market Members have joined its online coal trading platform. According globaCOAL&rsq ...
Thursday, 27 November 14
MINING SERVICES TAX SPIKED BY 233% - BISNIS INDONESIA
COALspot.com: The Energy and Mineral Resources Department of Indonesia said the tax contribution from mining services sector in the 3rd Q 2014 ...
Thursday, 27 November 14
PANAMAX : EXPECTATION'S FOR A STRONG END OF YEAR RUSH, DISAPPEAR DAY BY DAY - FEARNLEYS
Handy
“We have experienced a firming market the last couple of weeks. More activity from cargo owners in the Atlantic and less available to ...
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- Videocon Industries ltd - India
- Simpson Spence & Young - Indonesia
- Deloitte Consulting - India
- Jaiprakash Power Ventures ltd
- Meralco Power Generation, Philippines
- Bhatia International Limited - India
- London Commodity Brokers - England
- Neyveli Lignite Corporation Ltd, - India
- Thiess Contractors Indonesia
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- Mintek Dendrill Indonesia
- Krishnapatnam Port Company Ltd. - India
- Sojitz Corporation - Japan
- Sree Jayajothi Cements Limited - India
- Indian Oil Corporation Limited
- Oldendorff Carriers - Singapore
- International Coal Ventures Pvt Ltd - India
- The Treasury - Australian Government
- Renaissance Capital - South Africa
- Australian Commodity Traders Exchange
- Agrawal Coal Company - India
- Holcim Trading Pte Ltd - Singapore
- Sical Logistics Limited - India
- Petron Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Bulk Trading Sa - Switzerland
- Dalmia Cement Bharat India
- Essar Steel Hazira Ltd - India
- The State Trading Corporation of India Ltd
- Larsen & Toubro Limited - India
- Energy Development Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Georgia Ports Authority, United States
- Manunggal Multi Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement - Thailand
- GMR Energy Limited - India
- Straits Asia Resources Limited - Singapore
- CNBM International Corporation - China
- Aboitiz Power Corporation - Philippines
- Australian Coal Association
- ASAPP Information Group - India
- Metalloyd Limited - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- PTC India Limited - India
- Bukit Baiduri Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- Gujarat Mineral Development Corp Ltd - India
- GAC Shipping (India) Pvt Ltd
- Makarim & Taira - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- OPG Power Generation Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Planning Commission, India
- Pipit Mutiara Jaya. PT, Indonesia
- Uttam Galva Steels Limited - India
- Central Electricity Authority - India
- Kaltim Prima Coal - Indonesia
- Vizag Seaport Private Limited - India
- MS Steel International - UAE
- Goldman Sachs - Singapore
- Madhucon Powers Ltd - India
- Africa Commodities Group - South Africa
- VISA Power Limited - India
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bharathi Cement Corporation - India
- Leighton Contractors Pty Ltd - Australia
- Romanian Commodities Exchange
- Sarangani Energy Corporation, Philippines
- Banpu Public Company Limited - Thailand
- PNOC Exploration Corporation - Philippines
- Siam City Cement PLC, Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- TNB Fuel Sdn Bhd - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Commonwealth Bank - Australia
- Kobexindo Tractors - Indoneisa
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- Attock Cement Pakistan Limited
- Independent Power Producers Association of India
- Samtan Co., Ltd - South Korea
- Grasim Industreis Ltd - India
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- Salva Resources Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Jindal Steel & Power Ltd - India
- Borneo Indobara - Indonesia
- Parliament of New Zealand
- Coalindo Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Parry Sugars Refinery, India
- Sakthi Sugars Limited - India
- Port Waratah Coal Services - Australia
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
- Heidelberg Cement - Germany
- Lanco Infratech Ltd - India
- Central Java Power - Indonesia
- Wood Mackenzie - Singapore
- New Zealand Coal & Carbon
- Ceylon Electricity Board - Sri Lanka
- Savvy Resources Ltd - HongKong
- Karbindo Abesyapradhi - Indoneisa
- Minerals Council of Australia
- Price Waterhouse Coopers - Russia
- Sinarmas Energy and Mining - Indonesia
- Orica Mining Services - Indonesia
- Semirara Mining Corp, Philippines
- Formosa Plastics Group - Taiwan
- SMC Global Power, Philippines
- Barasentosa Lestari - Indonesia
- Tamil Nadu electricity Board
- AsiaOL BioFuels Corp., Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Medco Energi Mining Internasional
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- GVK Power & Infra Limited - India
- Thai Mozambique Logistica
- Indo Tambangraya Megah - Indonesia
- Electricity Generating Authority of Thailand
- Cement Manufacturers Association - India
- Anglo American - United Kingdom
- Indogreen Group - Indonesia
- Coastal Gujarat Power Limited - India
- White Energy Company Limited
- Globalindo Alam Lestari - Indonesia
- Economic Council, Georgia
- Eastern Coal Council - USA
- Intertek Mineral Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Mercator Lines Limited - India
- Power Finance Corporation Ltd., India
- Rashtriya Ispat Nigam Limited - India
- Electricity Authority, New Zealand
- India Bulls Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Interocean Group of Companies - India
- Ambuja Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- ICICI Bank Limited - India
- Aditya Birla Group - India
- Posco Energy - South Korea
- CIMB Investment Bank - Malaysia
- Global Green Power PLC Corporation, Philippines
- Bhushan Steel Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- Baramulti Group, Indonesia
- Antam Resourcindo - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ind-Barath Power Infra Limited - India
- Ministry of Transport, Egypt
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rio Tinto Coal - Australia
- Miang Besar Coal Terminal - Indonesia
- IEA Clean Coal Centre - UK
- Coal and Oil Company - UAE
- Standard Chartered Bank - UAE
- Latin American Coal - Colombia
- Chamber of Mines of South Africa
- SMG Consultants - Indonesia
- Xindia Steels Limited - India
- Gujarat Sidhee Cement - India
- Orica Australia Pty. Ltd.
- Global Business Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Iligan Light & Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Edison Trading Spa - Italy
- Bayan Resources Tbk. - Indonesia
- Wilmar Investment Holdings
- Timah Investasi Mineral - Indoneisa
- Mjunction Services Limited - India
- Marubeni Corporation - India
- Merrill Lynch Commodities Europe
- Indian Energy Exchange, India
- Directorate General of MIneral and Coal - Indonesia
- Star Paper Mills Limited - India
- European Bulk Services B.V. - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Vedanta Resources Plc - India
- Kepco SPC Power Corporation, Philippines
- Trasteel International SA, Italy
- Meenaskhi Energy Private Limited - India
- South Luzon Thermal Energy Corporation
- Tata Chemicals Ltd - India
- Eastern Energy - Thailand
- Global Coal Blending Company Limited - Australia
- Maharashtra Electricity Regulatory Commission - India
- The University of Queensland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Makmur.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- Indika Energy - Indonesia
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