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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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Thursday, 16 January 20
SUPRAMAX: INDO/CHINA ROUND VOYAGE FIXING AROUND LOW/MID USD 6,000 BSS APS INDO - FEARNLEYS
Capesize
Still very rough seas for the big ships, with the majority of the fleet trading Far East or fronthaul and consequently earning far les ...
Wednesday, 15 January 20
ASIA PACIFIC GAS AND LNG - 6 THEMES TO WATCH IN 2020 - WOOD MACKENZIE
NEWS RELEASE
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Asian LNG spot pr ...
Wednesday, 15 January 20
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Wednesday, 15 January 20
SHIPPING MARKET INSIGHT - INERMODAL
Happy New Year and all the best for IMO 2020 !!
The early days of IMO 2020 coming into force have certainly had an impact on the indus ...
Tuesday, 14 January 20
SOLAS AMENDMENTS ENTERING INTO FORCE 1 JANUARY 2020 - STANDARD CLUB
While the latest amendments to MARPOL annex VI which entered into force on 1 January 2020 limiting the SOx emissions from ships has been the centre ...
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- Madhucon Powers Ltd - India
- Economic Council, Georgia
- Commonwealth Bank - Australia
- Coastal Gujarat Power Limited - India
- Central Electricity Authority - India
- PNOC Exploration Corporation - Philippines
- Anglo American - United Kingdom
- Makarim & Taira - Indonesia
- Parliament of New Zealand
- Coalindo Energy - Indonesia
- Singapore Mercantile Exchange
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- Trasteel International SA, Italy
- Australian Commodity Traders Exchange
- Sindya Power Generating Company Private Ltd
- Standard Chartered Bank - UAE
- Thai Mozambique Logistica
- Mjunction Services Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Posco Energy - South Korea
- Eastern Energy - Thailand
- Global Business Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Goldman Sachs - Singapore
- Lanco Infratech Ltd - India
- Riau Bara Harum - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Salva Resources Pvt Ltd - India
- Dalmia Cement Bharat India
- Indian Energy Exchange, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- GAC Shipping (India) Pvt Ltd
- International Coal Ventures Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Africa Commodities Group - South Africa
- Sree Jayajothi Cements Limited - India
- Iligan Light & Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Vizag Seaport Private Limited - India
- South Luzon Thermal Energy Corporation
- OPG Power Generation Pvt Ltd - India
- Electricity Generating Authority of Thailand
- CNBM International Corporation - China
- Siam City Cement - Thailand
- Globalindo Alam Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Kobexindo Tractors - Indoneisa
- Energy Link Ltd, New Zealand
- Power Finance Corporation Ltd., India
- The Treasury - Australian Government
- Vijayanagar Sugar Pvt Ltd - India
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- European Bulk Services B.V. - Netherlands
- Port Waratah Coal Services - Australia
- Carbofer General Trading SA - India
- Asmin Koalindo Tuhup - Indonesia
- Borneo Indobara - Indonesia
- Marubeni Corporation - India
- Global Coal Blending Company Limited - Australia
- Eastern Coal Council - USA
- AsiaOL BioFuels Corp., Philippines
- Barasentosa Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Merrill Lynch Commodities Europe
- Star Paper Mills Limited - India
- Toyota Tsusho Corporation, Japan
- Mercator Lines Limited - India
- Aditya Birla Group - India
- Wilmar Investment Holdings
- Simpson Spence & Young - Indonesia
- Sojitz Corporation - Japan
- London Commodity Brokers - England
- Neyveli Lignite Corporation Ltd, - India
- MS Steel International - UAE
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- Vedanta Resources Plc - India
- Kohat Cement Company Ltd. - Pakistan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Planning Commission, India
- Therma Luzon, Inc, Philippines
- Semirara Mining Corp, Philippines
- Uttam Galva Steels Limited - India
- Samtan Co., Ltd - South Korea
- Jaiprakash Power Ventures ltd
- Tata Chemicals Ltd - India
- Energy Development Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Meralco Power Generation, Philippines
- Kumho Petrochemical, South Korea
- SN Aboitiz Power Inc, Philippines
- Chamber of Mines of South Africa
- Larsen & Toubro Limited - India
- IHS Mccloskey Coal Group - USA
- Cement Manufacturers Association - India
- Mintek Dendrill Indonesia
- Holcim Trading Pte Ltd - Singapore
- Interocean Group of Companies - India
- Australian Coal Association
- San Jose City I Power Corp, Philippines
- PTC India Limited - India
- ICICI Bank Limited - India
- Ministry of Transport, Egypt
- GVK Power & Infra Limited - India
- Intertek Mineral Services - Indonesia
- New Zealand Coal & Carbon
- Antam Resourcindo - Indonesia
- Bukit Makmur.PT - Indonesia
- Ministry of Finance - Indonesia
- Bharathi Cement Corporation - India
- Minerals Council of Australia
- Ambuja Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Edison Trading Spa - Italy
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- GMR Energy Limited - India
- Central Java Power - Indonesia
- Independent Power Producers Association of India
- Jindal Steel & Power Ltd - India
- Electricity Authority, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Heidelberg Cement - Germany
- Kepco SPC Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Sical Logistics Limited - India
- Bukit Baiduri Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Indo Tambangraya Megah - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Videocon Industries ltd - India
- Medco Energi Mining Internasional
- Altura Mining Limited, Indonesia
- Indogreen Group - Indonesia
- Banpu Public Company Limited - Thailand
- Mercuria Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- The State Trading Corporation of India Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Timah Investasi Mineral - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Ministry of Mines - Canada
- Orica Australia Pty. Ltd.
- Indonesian Coal Mining Association
- Coal and Oil Company - UAE
- Oldendorff Carriers - Singapore
- The University of Queensland
- Billiton Holdings Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- White Energy Company Limited
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Savvy Resources Ltd - HongKong
- Krishnapatnam Port Company Ltd. - India
- Sakthi Sugars Limited - India
- Attock Cement Pakistan Limited
- Agrawal Coal Company - India
- TNB Fuel Sdn Bhd - Malaysia
- Bangladesh Power Developement Board
- LBH Netherlands Bv - Netherlands
- Rio Tinto Coal - Australia
- Romanian Commodities Exchange
- Latin American Coal - Colombia
- Xindia Steels Limited - India
- Petron Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Global Green Power PLC Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Parry Sugars Refinery, India
- Gujarat Sidhee Cement - India
- SMG Consultants - Indonesia
- Bhatia International Limited - India
- Baramulti Group, Indonesia
- ASAPP Information Group - India
- Kartika Selabumi Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Renaissance Capital - South Africa
- Tamil Nadu electricity Board
- Orica Mining Services - Indonesia
- India Bulls Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Malabar Cements Ltd - India
- Grasim Industreis Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Deloitte Consulting - India
- Pendopo Energi Batubara - Indonesia
- Indian Oil Corporation Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Formosa Plastics Group - Taiwan
- Georgia Ports Authority, United States
- Meenaskhi Energy Private Limited - India
- Aboitiz Power Corporation - Philippines
- Wood Mackenzie - Singapore
- Indika Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- VISA Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- Bulk Trading Sa - Switzerland
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