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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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Wednesday, 15 October 14
SHIPOWNER NOT LIABLE FOR CARGO DAMAGE RESULTING FROM POOR STOWAGE - CLYDE & CO
KNOWLEDGE TO ELEVATE
Russian metal trading company Yuzhny Zavod Metall Profil (YZMP), the holder of a CONGEN 1994 bill of lading, took delivery o ...
Wednesday, 15 October 14
NEWCASTLE SHIPPED 13.96 MILLION TONS OF COAL IN SEPTEMBER; UP 5.72%
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $1,227.7 wor ...
Tuesday, 14 October 14
KING COAL UNDER ATTACK? - EVA TZIMA
With the last quarter of the year being well underway and with no strong signs that the Dry Bulk market could be ready for a big positive reversal, ...
Tuesday, 14 October 14
THE NEW CHINESE TRANSPORTATION TAX LAW: WHAT DOES IT MEAN FOR GREEK SHIPPING? - DELOITTE
China has recently promulgated a new law which imposes tax on profits from freights of inbound routes. The objective of the new tax law titled &ldq ...
Monday, 13 October 14
CHINESE COAL IMPORT TARIFFS YET ANOTHER BLOW TO AUSTRALIAN COAL EXPORTS - TIM BUCKLEY
COALspot.com: China’s unexpected move to reintroduce thermal coal import tariffs of 6% will have a materially negative impact on the viabilit ...
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- Latin American Coal - Colombia
- Medco Energi Mining Internasional
- Power Finance Corporation Ltd., India
- Kapuas Tunggal Persada - Indonesia
- Straits Asia Resources Limited - Singapore
- Chamber of Mines of South Africa
- Eastern Energy - Thailand
- Siam City Cement - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- The University of Queensland
- Coalindo Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Malabar Cements Ltd - India
- Heidelberg Cement - Germany
- Therma Luzon, Inc, Philippines
- Metalloyd Limited - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- Bangladesh Power Developement Board
- CNBM International Corporation - China
- Sarangani Energy Corporation, Philippines
- Sakthi Sugars Limited - India
- Thai Mozambique Logistica
- Coal and Oil Company - UAE
- PTC India Limited - India
- Karaikal Port Pvt Ltd - India
- Rio Tinto Coal - Australia
- The State Trading Corporation of India Ltd
- Semirara Mining Corp, Philippines
- SMG Consultants - Indonesia
- Wilmar Investment Holdings
- Pendopo Energi Batubara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Commonwealth Bank - Australia
- Kobexindo Tractors - Indoneisa
- Marubeni Corporation - India
- Bulk Trading Sa - Switzerland
- IEA Clean Coal Centre - UK
- Central Java Power - Indonesia
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Coastal Gujarat Power Limited - India
- Globalindo Alam Lestari - Indonesia
- ASAPP Information Group - India
- Rashtriya Ispat Nigam Limited - India
- CIMB Investment Bank - Malaysia
- Bukit Makmur.PT - Indonesia
- Madhucon Powers Ltd - India
- Mercuria Energy - Indonesia
- Carbofer General Trading SA - India
- Jaiprakash Power Ventures ltd
- SN Aboitiz Power Inc, Philippines
- Interocean Group of Companies - India
- Parliament of New Zealand
- Ceylon Electricity Board - Sri Lanka
- Wood Mackenzie - Singapore
- Banpu Public Company Limited - Thailand
- Indian Oil Corporation Limited
- MS Steel International - UAE
- Global Green Power PLC Corporation, Philippines
- Indonesian Coal Mining Association
- Electricity Generating Authority of Thailand
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Uttam Galva Steels Limited - India
- Sical Logistics Limited - India
- Holcim Trading Pte Ltd - Singapore
- Cigading International Bulk Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Baramulti Group, Indonesia
- Electricity Authority, New Zealand
- Bhatia International Limited - India
- Petron Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Edison Trading Spa - Italy
- Indian Energy Exchange, India
- Dalmia Cement Bharat India
- Gujarat Sidhee Cement - India
- Gujarat Electricity Regulatory Commission - India
- Leighton Contractors Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Africa Commodities Group - South Africa
- Barasentosa Lestari - Indonesia
- Ministry of Mines - Canada
- Sojitz Corporation - Japan
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Central Electricity Authority - India
- Alfred C Toepfer International GmbH - Germany
- Chettinad Cement Corporation Ltd - India
- Siam City Cement PLC, Thailand
- White Energy Company Limited
- IHS Mccloskey Coal Group - USA
- ICICI Bank Limited - India
- Kumho Petrochemical, South Korea
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Attock Cement Pakistan Limited
- Lanco Infratech Ltd - India
- Port Waratah Coal Services - Australia
- Posco Energy - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Minerals Council of Australia
- Bhushan Steel Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Bukit Baiduri Energy - Indonesia
- Goldman Sachs - Singapore
- Singapore Mercantile Exchange
- Kepco SPC Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Orica Mining Services - Indonesia
- London Commodity Brokers - England
- GVK Power & Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- The Treasury - Australian Government
- Intertek Mineral Services - Indonesia
- Eastern Coal Council - USA
- Global Coal Blending Company Limited - Australia
- Indika Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Grasim Industreis Ltd - India
- Salva Resources Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Tata Chemicals Ltd - India
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Sindya Power Generating Company Private Ltd
- Merrill Lynch Commodities Europe
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bharathi Cement Corporation - India
- Toyota Tsusho Corporation, Japan
- Deloitte Consulting - India
- Star Paper Mills Limited - India
- Tamil Nadu electricity Board
- Economic Council, Georgia
- Planning Commission, India
- Bhoruka Overseas - Indonesia
- Sree Jayajothi Cements Limited - India
- TeaM Sual Corporation - Philippines
- Indogreen Group - Indonesia
- Price Waterhouse Coopers - Russia
- PowerSource Philippines DevCo
- Ambuja Cements Ltd - India
- Antam Resourcindo - Indonesia
- Vizag Seaport Private Limited - India
- International Coal Ventures Pvt Ltd - India
- India Bulls Power Limited - India
- McConnell Dowell - Australia
- Aboitiz Power Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- New Zealand Coal & Carbon
- Aditya Birla Group - India
- Kideco Jaya Agung - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
- Standard Chartered Bank - UAE
- Agrawal Coal Company - India
- Cement Manufacturers Association - India
- Ind-Barath Power Infra Limited - India
- Formosa Plastics Group - Taiwan
- SMC Global Power, Philippines
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Meralco Power Generation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- European Bulk Services B.V. - Netherlands
- Ministry of Transport, Egypt
- Petrochimia International Co. Ltd.- Taiwan
- Trasteel International SA, Italy
- Independent Power Producers Association of India
- Mjunction Services Limited - India
- Binh Thuan Hamico - Vietnam
- Australian Commodity Traders Exchange
- Mintek Dendrill Indonesia
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining and Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Maheswari Brothers Coal Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Romanian Commodities Exchange
- VISA Power Limited - India
- Riau Bara Harum - Indonesia
- PNOC Exploration Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Energy Development Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parry Sugars Refinery, India
- Videocon Industries ltd - India
- Directorate Of Revenue Intelligence - India
- Kalimantan Lumbung Energi - Indonesia
- Vedanta Resources Plc - India
- Australian Coal Association
- Bahari Cakrawala Sebuku - Indonesia
- Kaltim Prima Coal - Indonesia
- Ministry of Finance - Indonesia
- Energy Link Ltd, New Zealand
- Larsen & Toubro Limited - India
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