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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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Tuesday, 03 March 20
IMPORTANCE OF MASTER'S CARGO CHECKS - BALTIC EXCHANGE
KNOWLEDGE TO ELEVATE
Adecision in recent High Court case has made it clear that there is no implied indemnity from a charterer to their counte ...
Tuesday, 03 March 20
COAL'S SHARE OF CHINA ENERGY MIX FALLS IN 2019 BUT CONSUMPTION STILL RISING - REUTERS
Coal accounted for 57.7% of China’s primary energy consumption in 2019, the National Bureau of Statistics said on Friday, down 1.5 percentage ...
Monday, 02 March 20
SHIPOWNERS AND OPERATORS COULD FACE DETENTION OF SHIPS FROM 1ST MARCH UNDER IMO RULE - ICS
Port state control authorities will begin to enforce the IMO’s Sulphur 2020 from 1st March, making it an offense for ships to carry fuel that ...
Saturday, 29 February 20
SUPRAMAX SENTIMENT WAS UP IN A FEW KEY AREAS OVER THE LAST WEEK - BALTIC BRIEFING
Capesize
The Capesize market woes related to Coronavirus have now spread through the wider global markets like wildfire. The wider supply and d ...
Thursday, 27 February 20
FOREIGN COMPANIES LIKELY TO SKIP COMMERCIAL COAL BLOCK AUCTIONS - ECONOMIC TIMES
The Centre is in the process of inviting global players for commercial mining, following 100% foreign direct investment in the sector. However, giv ...
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- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- Renaissance Capital - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Georgia Ports Authority, United States
- Sindya Power Generating Company Private Ltd
- MS Steel International - UAE
- Mintek Dendrill Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement PLC, Thailand
- AsiaOL BioFuels Corp., Philippines
- Malabar Cements Ltd - India
- Deloitte Consulting - India
- Coastal Gujarat Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Trasteel International SA, Italy
- Barasentosa Lestari - Indonesia
- The Treasury - Australian Government
- Electricity Authority, New Zealand
- Holcim Trading Pte Ltd - Singapore
- Cigading International Bulk Terminal - Indonesia
- Australian Coal Association
- Indonesian Coal Mining Association
- South Luzon Thermal Energy Corporation
- Ministry of Mines - Canada
- Bangladesh Power Developement Board
- Cement Manufacturers Association - India
- SMC Global Power, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement - Thailand
- Energy Development Corp, Philippines
- Makarim & Taira - Indonesia
- Salva Resources Pvt Ltd - India
- Independent Power Producers Association of India
- Energy Link Ltd, New Zealand
- Binh Thuan Hamico - Vietnam
- Rio Tinto Coal - Australia
- GMR Energy Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Alfred C Toepfer International GmbH - Germany
- Coalindo Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- PTC India Limited - India
- Marubeni Corporation - India
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- Kumho Petrochemical, South Korea
- Kepco SPC Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Bhushan Steel Limited - India
- Global Business Power Corporation, Philippines
- ICICI Bank Limited - India
- Leighton Contractors Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Eastern Coal Council - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kaltim Prima Coal - Indonesia
- New Zealand Coal & Carbon
- Kideco Jaya Agung - Indonesia
- San Jose City I Power Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- Posco Energy - South Korea
- Chettinad Cement Corporation Ltd - India
- Sree Jayajothi Cements Limited - India
- India Bulls Power Limited - India
- The University of Queensland
- Australian Commodity Traders Exchange
- SMG Consultants - Indonesia
- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- Videocon Industries ltd - India
- Global Green Power PLC Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Sakthi Sugars Limited - India
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- Formosa Plastics Group - Taiwan
- Kobexindo Tractors - Indoneisa
- Karaikal Port Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Kartika Selabumi Mining - Indonesia
- Sojitz Corporation - Japan
- Goldman Sachs - Singapore
- Straits Asia Resources Limited - Singapore
- Globalindo Alam Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- Gujarat Mineral Development Corp Ltd - India
- Star Paper Mills Limited - India
- Intertek Mineral Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Xindia Steels Limited - India
- Edison Trading Spa - Italy
- Riau Bara Harum - Indonesia
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sical Logistics Limited - India
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Bukit Baiduri Energy - Indonesia
- Medco Energi Mining Internasional
- Jaiprakash Power Ventures ltd
- Karbindo Abesyapradhi - Indoneisa
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Economic Council, Georgia
- TNB Fuel Sdn Bhd - Malaysia
- Borneo Indobara - Indonesia
- Orica Australia Pty. Ltd.
- Singapore Mercantile Exchange
- Grasim Industreis Ltd - India
- Global Coal Blending Company Limited - Australia
- PetroVietnam Power Coal Import and Supply Company
- IEA Clean Coal Centre - UK
- Miang Besar Coal Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Banpu Public Company Limited - Thailand
- Bulk Trading Sa - Switzerland
- Planning Commission, India
- Mercator Lines Limited - India
- Gujarat Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Merrill Lynch Commodities Europe
- Minerals Council of Australia
- Thai Mozambique Logistica
- Bukit Makmur.PT - Indonesia
- Mjunction Services Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Indian Energy Exchange, India
- Vedanta Resources Plc - India
- Maheswari Brothers Coal Limited - India
- Baramulti Group, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Orica Mining Services - Indonesia
- ASAPP Information Group - India
- Rashtriya Ispat Nigam Limited - India
- Eastern Energy - Thailand
- OPG Power Generation Pvt Ltd - India
- Wood Mackenzie - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Tata Chemicals Ltd - India
- Larsen & Toubro Limited - India
- Meralco Power Generation, Philippines
- Indogreen Group - Indonesia
- Directorate Of Revenue Intelligence - India
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- Madhucon Powers Ltd - India
- Indika Energy - Indonesia
- PowerSource Philippines DevCo
- Kohat Cement Company Ltd. - Pakistan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The State Trading Corporation of India Ltd
- GVK Power & Infra Limited - India
- Commonwealth Bank - Australia
- Ind-Barath Power Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- White Energy Company Limited
- McConnell Dowell - Australia
- TeaM Sual Corporation - Philippines
- Agrawal Coal Company - India
- Simpson Spence & Young - Indonesia
- Samtan Co., Ltd - South Korea
- Power Finance Corporation Ltd., India
- Maharashtra Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Petron Corporation, Philippines
- Dalmia Cement Bharat India
- Ministry of Transport, Egypt
- Central Java Power - Indonesia
- Antam Resourcindo - Indonesia
- IHS Mccloskey Coal Group - USA
- VISA Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining Corp, Philippines
- Parliament of New Zealand
- Bhoruka Overseas - Indonesia
- Aditya Birla Group - India
- Lanco Infratech Ltd - India
- Wilmar Investment Holdings
- CIMB Investment Bank - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- LBH Netherlands Bv - Netherlands
- Price Waterhouse Coopers - Russia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tamil Nadu electricity Board
- Parry Sugars Refinery, India
- CNBM International Corporation - China
- Bayan Resources Tbk. - Indonesia
- Savvy Resources Ltd - HongKong
- Indo Tambangraya Megah - Indonesia
- Vizag Seaport Private Limited - India
- Pendopo Energi Batubara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Standard Chartered Bank - UAE
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- GN Power Mariveles Coal Plant, Philippines
- European Bulk Services B.V. - Netherlands
- Romanian Commodities Exchange
- Interocean Group of Companies - India
- Essar Steel Hazira Ltd - India
- Anglo American - United Kingdom
- Meenaskhi Energy Private Limited - India
- Iligan Light & Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Heidelberg Cement - Germany
- Ambuja Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
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