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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
Wood Mackenzie has identified six themes that will impact Asia Pacific’s gas and LNG markets in 2020
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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- India Bulls Power Limited - India
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- ICICI Bank Limited - India
- Bharathi Cement Corporation - India
- New Zealand Coal & Carbon
- Maheswari Brothers Coal Limited - India
- Australian Coal Association
- International Coal Ventures Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Riau Bara Harum - Indonesia
- Independent Power Producers Association of India
- Eastern Energy - Thailand
- Aboitiz Power Corporation - Philippines
- Singapore Mercantile Exchange
- Grasim Industreis Ltd - India
- Intertek Mineral Services - Indonesia
- Bangladesh Power Developement Board
- Metalloyd Limited - United Kingdom
- VISA Power Limited - India
- Manunggal Multi Energi - Indonesia
- Siam City Cement PLC, Thailand
- Bhushan Steel Limited - India
- Holcim Trading Pte Ltd - Singapore
- Directorate Of Revenue Intelligence - India
- Toyota Tsusho Corporation, Japan
- Kepco SPC Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- White Energy Company Limited
- Thai Mozambique Logistica
- OPG Power Generation Pvt Ltd - India
- Videocon Industries ltd - India
- Malabar Cements Ltd - India
- Australian Commodity Traders Exchange
- PTC India Limited - India
- Antam Resourcindo - Indonesia
- Aditya Birla Group - India
- Coastal Gujarat Power Limited - India
- Attock Cement Pakistan Limited
- Madhucon Powers Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Georgia Ports Authority, United States
- IHS Mccloskey Coal Group - USA
- Anglo American - United Kingdom
- Jaiprakash Power Ventures ltd
- Cement Manufacturers Association - India
- Tata Chemicals Ltd - India
- Commonwealth Bank - Australia
- Rashtriya Ispat Nigam Limited - India
- Bulk Trading Sa - Switzerland
- Pendopo Energi Batubara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Globalindo Alam Lestari - Indonesia
- Makarim & Taira - Indonesia
- San Jose City I Power Corp, Philippines
- Planning Commission, India
- Kartika Selabumi Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Petron Corporation, Philippines
- Gujarat Sidhee Cement - India
- Xindia Steels Limited - India
- Ministry of Mines - Canada
- Coalindo Energy - Indonesia
- Trasteel International SA, Italy
- Formosa Plastics Group - Taiwan
- Goldman Sachs - Singapore
- GAC Shipping (India) Pvt Ltd
- McConnell Dowell - Australia
- Carbofer General Trading SA - India
- Sree Jayajothi Cements Limited - India
- Indonesian Coal Mining Association
- Bukit Asam (Persero) Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
- Ind-Barath Power Infra Limited - India
- Indian Oil Corporation Limited
- TeaM Sual Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- South Luzon Thermal Energy Corporation
- Therma Luzon, Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Edison Trading Spa - Italy
- CIMB Investment Bank - Malaysia
- SMC Global Power, Philippines
- Lanco Infratech Ltd - India
- Bukit Makmur.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Parliament of New Zealand
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- Energy Development Corp, Philippines
- Savvy Resources Ltd - HongKong
- Cigading International Bulk Terminal - Indonesia
- Tamil Nadu electricity Board
- IEA Clean Coal Centre - UK
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PowerSource Philippines DevCo
- Kobexindo Tractors - Indoneisa
- Port Waratah Coal Services - Australia
- Bhoruka Overseas - Indonesia
- Sarangani Energy Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Posco Energy - South Korea
- Electricity Generating Authority of Thailand
- Marubeni Corporation - India
- Jindal Steel & Power Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- The State Trading Corporation of India Ltd
- Latin American Coal - Colombia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sakthi Sugars Limited - India
- Vedanta Resources Plc - India
- Energy Link Ltd, New Zealand
- Chamber of Mines of South Africa
- London Commodity Brokers - England
- GN Power Mariveles Coal Plant, Philippines
- Salva Resources Pvt Ltd - India
- SMG Consultants - Indonesia
- Bukit Baiduri Energy - Indonesia
- Borneo Indobara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Timah Investasi Mineral - Indoneisa
- Mercuria Energy - Indonesia
- Wilmar Investment Holdings
- Mjunction Services Limited - India
- Ceylon Electricity Board - Sri Lanka
- Dalmia Cement Bharat India
- Leighton Contractors Pty Ltd - Australia
- Indogreen Group - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Bhatia International Limited - India
- Indian Energy Exchange, India
- Siam City Cement - Thailand
- Krishnapatnam Port Company Ltd. - India
- Meralco Power Generation, Philippines
- Star Paper Mills Limited - India
- Ministry of Transport, Egypt
- Gujarat Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Interocean Group of Companies - India
- The University of Queensland
- Merrill Lynch Commodities Europe
- Kapuas Tunggal Persada - Indonesia
- Bayan Resources Tbk. - Indonesia
- GVK Power & Infra Limited - India
- Minerals Council of Australia
- Sojitz Corporation - Japan
- Sical Logistics Limited - India
- Rio Tinto Coal - Australia
- ASAPP Information Group - India
- Simpson Spence & Young - Indonesia
- Billiton Holdings Pty Ltd - Australia
- MS Steel International - UAE
- Central Java Power - Indonesia
- Wood Mackenzie - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Sindya Power Generating Company Private Ltd
- Parry Sugars Refinery, India
- Miang Besar Coal Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Romanian Commodities Exchange
- Kumho Petrochemical, South Korea
- Mercator Lines Limited - India
- Essar Steel Hazira Ltd - India
- The Treasury - Australian Government
- Medco Energi Mining Internasional
- Banpu Public Company Limited - Thailand
- Thiess Contractors Indonesia
- Samtan Co., Ltd - South Korea
- Ministry of Finance - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Directorate General of MIneral and Coal - Indonesia
- Central Electricity Authority - India
- Larsen & Toubro Limited - India
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- GMR Energy Limited - India
- SN Aboitiz Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Africa Commodities Group - South Africa
- Coal and Oil Company - UAE
- Uttam Galva Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Oldendorff Carriers - Singapore
- Kaltim Prima Coal - Indonesia
- Vizag Seaport Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Economic Council, Georgia
- Indika Energy - Indonesia
- Electricity Authority, New Zealand
- Eastern Coal Council - USA
- Karaikal Port Pvt Ltd - India
- Agrawal Coal Company - India
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