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