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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, 07 June 20
A SCRUBBER FITTED 61,000 ULTRAMAX WAS FIXED DELIVERY PHILIPPINES TRIP VIA SOUTH AFRICA REDELIVERY VIETNAM AT $9,500 - BALTIC BRIEFING
Capesize
The small flicker of hope at the beginning of this week has kindled a small fire under the Capesize market. At a paltry $3369 from the ...
Saturday, 06 June 20
KOREA SOUTH-EAST POWER CO INVITED COAL BIDS FOR MIN 5600 NCV COAL
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 270,000 Tons (MT) min. 5600 NCV co ...
Friday, 05 June 20
COAL INDIA ESTIMATES PRODUCTION GROWTH BY OVERBURDEN REMOVAL - FINANCIAL EXPRESS
PSU miner Coal India (CIL) has now limited mining only to Overburden Removal (OBR) with falling demand of coal. The mining behemoth is now keeping ...
Friday, 05 June 20
U.S. SANCTIONS COMPLIANCE GUIDANCE RELEASED FOR THE GLOBAL MARITIME, ENERGY AND METALS SECTORS - AKIN GUMP
Key Points
On May 14, 2020, OFAC, the Department of State and the U.S. Coast Guard jointly released guidance for persons involved in the ma ...
Friday, 05 June 20
IN THE FIRST 5 MONTHS OF 2020 AUSTRALIA SHIPPED 6.8 MLN TONNES TO VIETNAM - BANCHERO COSTA
In the first 5 months of 2020, global seaborne coal trade declined by as much as -8% year-on-year, according to vessel tracking data from Ref ...
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- Marubeni Corporation - India
- Heidelberg Cement - Germany
- Holcim Trading Pte Ltd - Singapore
- Samtan Co., Ltd - South Korea
- Baramulti Group, Indonesia
- Petron Corporation, Philippines
- Bhushan Steel Limited - India
- Indian Oil Corporation Limited
- Jorong Barutama Greston.PT - Indonesia
- Minerals Council of Australia
- Aboitiz Power Corporation - Philippines
- Videocon Industries ltd - India
- Chettinad Cement Corporation Ltd - India
- GMR Energy Limited - India
- Sree Jayajothi Cements Limited - India
- Coastal Gujarat Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Sakthi Sugars Limited - India
- Orica Mining Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Iligan Light & Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Jindal Steel & Power Ltd - India
- Manunggal Multi Energi - Indonesia
- Tamil Nadu electricity Board
- VISA Power Limited - India
- Price Waterhouse Coopers - Russia
- Kaltim Prima Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Kapuas Tunggal Persada - Indonesia
- Therma Luzon, Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Dalmia Cement Bharat India
- Ministry of Mines - Canada
- MS Steel International - UAE
- ICICI Bank Limited - India
- Georgia Ports Authority, United States
- TNB Fuel Sdn Bhd - Malaysia
- Interocean Group of Companies - India
- Kobexindo Tractors - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhoruka Overseas - Indonesia
- Jaiprakash Power Ventures ltd
- PNOC Exploration Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sinarmas Energy and Mining - Indonesia
- London Commodity Brokers - England
- AsiaOL BioFuels Corp., Philippines
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Deloitte Consulting - India
- Energy Development Corp, Philippines
- Siam City Cement PLC, Thailand
- Eastern Coal Council - USA
- Thiess Contractors Indonesia
- Essar Steel Hazira Ltd - India
- Metalloyd Limited - United Kingdom
- GVK Power & Infra Limited - India
- Chamber of Mines of South Africa
- Toyota Tsusho Corporation, Japan
- Karaikal Port Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- The State Trading Corporation of India Ltd
- Coal and Oil Company - UAE
- Krishnapatnam Port Company Ltd. - India
- Antam Resourcindo - Indonesia
- Mintek Dendrill Indonesia
- Orica Australia Pty. Ltd.
- Salva Resources Pvt Ltd - India
- Trasteel International SA, Italy
- PTC India Limited - India
- Bhatia International Limited - India
- Renaissance Capital - South Africa
- South Luzon Thermal Energy Corporation
- Indika Energy - Indonesia
- Lanco Infratech Ltd - India
- Electricity Authority, New Zealand
- Bangladesh Power Developement Board
- Electricity Generating Authority of Thailand
- Meralco Power Generation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Thai Mozambique Logistica
- IHS Mccloskey Coal Group - USA
- Madhucon Powers Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- GN Power Mariveles Coal Plant, Philippines
- Kideco Jaya Agung - Indonesia
- Timah Investasi Mineral - Indoneisa
- Rio Tinto Coal - Australia
- Savvy Resources Ltd - HongKong
- Indian Energy Exchange, India
- Carbofer General Trading SA - India
- TeaM Sual Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Altura Mining Limited, Indonesia
- Kumho Petrochemical, South Korea
- Sindya Power Generating Company Private Ltd
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Vizag Seaport Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Star Paper Mills Limited - India
- Globalindo Alam Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- New Zealand Coal & Carbon
- Merrill Lynch Commodities Europe
- SMG Consultants - Indonesia
- Ministry of Finance - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bulk Trading Sa - Switzerland
- Bharathi Cement Corporation - India
- Uttam Galva Steels Limited - India
- Intertek Mineral Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Pendopo Energi Batubara - Indonesia
- Grasim Industreis Ltd - India
- Australian Commodity Traders Exchange
- Africa Commodities Group - South Africa
- Latin American Coal - Colombia
- PowerSource Philippines DevCo
- Makarim & Taira - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Coal Association
- Ambuja Cements Ltd - India
- Central Java Power - Indonesia
- SN Aboitiz Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercator Lines Limited - India
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- Indo Tambangraya Megah - Indonesia
- Borneo Indobara - Indonesia
- Oldendorff Carriers - Singapore
- Wood Mackenzie - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Attock Cement Pakistan Limited
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- Sojitz Corporation - Japan
- PetroVietnam Power Coal Import and Supply Company
- Romanian Commodities Exchange
- Agrawal Coal Company - India
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- Indonesian Coal Mining Association
- Independent Power Producers Association of India
- Bukit Baiduri Energy - Indonesia
- Standard Chartered Bank - UAE
- Aditya Birla Group - India
- Leighton Contractors Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Kepco SPC Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- Vedanta Resources Plc - India
- Economic Council, Georgia
- LBH Netherlands Bv - Netherlands
- Edison Trading Spa - Italy
- Billiton Holdings Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Commonwealth Bank - Australia
- White Energy Company Limited
- SMC Global Power, Philippines
- The Treasury - Australian Government
- IEA Clean Coal Centre - UK
- Port Waratah Coal Services - Australia
- CIMB Investment Bank - Malaysia
- Bayan Resources Tbk. - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Xindia Steels Limited - India
- Cement Manufacturers Association - India
- Malabar Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Indogreen Group - Indonesia
- Barasentosa Lestari - Indonesia
- Coalindo Energy - Indonesia
- McConnell Dowell - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- India Bulls Power Limited - India
- Parry Sugars Refinery, India
- Formosa Plastics Group - Taiwan
- Siam City Cement - Thailand
- Parliament of New Zealand
- Singapore Mercantile Exchange
- Sarangani Energy Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- ASAPP Information Group - India
- Wilmar Investment Holdings
- Riau Bara Harum - Indonesia
- Medco Energi Mining Internasional
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Sidhee Cement - India
- Global Business Power Corporation, Philippines
- Eastern Energy - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- The University of Queensland
- CNBM International Corporation - China
- Planning Commission, India
- Bukit Asam (Persero) Tbk - Indonesia
- Larsen & Toubro Limited - India
- Maheswari Brothers Coal Limited - India
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