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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, 25 December 19
COVER FOR WAR AND TERRORISM RISKS, AND COVER IN RESPECT OF BIOLOGICAL AND BIO-CHEMICAL WEAPONS - 2020 POLICY YEAR: AMERICAN CLUB
KNOWLEDGE TO ELEVATE
This Circular describes the arrangements which have been made to provide special cover for war and terrorism risks, and c ...
Wednesday, 25 December 19
EXHAUST GAS CLEANING SYSTEMS (SCRUBBER) GUIDANCE - THE STANDARD CLUB
KNOWLEDGE TO ELEVATE
In a few weeks, IMO’s ‘global sulphur cap’ will take effect. The permitted levels of SOx in ship emissi ...
Wednesday, 25 December 19
INDONESIAN BUKIT ASAM TARGETS TO MINE 30 MLN T OF COAL IN 2020 - REUTERS
Indonesian state-owned coal miner PT Bukit Asam targets to produce around 30 million tonnes of coal in 2020, compared with an estimate of 28.5 mill ...
Wednesday, 25 December 19
SHIPPING MARKET INSIGHT - INTERMODAL
As another year in the shipping industry is coming to an end, it is interesting to look at the dry bulk and tanker markets and how these performed ...
Monday, 23 December 19
VLSFO PRICING & AVAILABILITY NEEDS CAREFUL WATCHING - INTEGR8 FUELS
As we approach January 1st 2020 , the VLSFO price premium to HSFO has widened considerably
We are clearly well into the IMO 2020 transition; ch ...
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- Ministry of Transport, Egypt
- Ambuja Cements Ltd - India
- Singapore Mercantile Exchange
- Borneo Indobara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Mines - Canada
- Aboitiz Power Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Australian Commodity Traders Exchange
- Petron Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- CIMB Investment Bank - Malaysia
- Jaiprakash Power Ventures ltd
- Commonwealth Bank - Australia
- Price Waterhouse Coopers - Russia
- Indogreen Group - Indonesia
- Agrawal Coal Company - India
- Directorate Of Revenue Intelligence - India
- Meenaskhi Energy Private Limited - India
- Planning Commission, India
- Kohat Cement Company Ltd. - Pakistan
- Timah Investasi Mineral - Indoneisa
- Formosa Plastics Group - Taiwan
- Economic Council, Georgia
- Indian Oil Corporation Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- Indian Energy Exchange, India
- Lanco Infratech Ltd - India
- European Bulk Services B.V. - Netherlands
- Gujarat Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMG Consultants - Indonesia
- Central Java Power - Indonesia
- Altura Mining Limited, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- ASAPP Information Group - India
- Globalindo Alam Lestari - Indonesia
- White Energy Company Limited
- Latin American Coal - Colombia
- OPG Power Generation Pvt Ltd - India
- Georgia Ports Authority, United States
- Coastal Gujarat Power Limited - India
- Australian Coal Association
- Kepco SPC Power Corporation, Philippines
- Posco Energy - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Medco Energi Mining Internasional
- VISA Power Limited - India
- Chettinad Cement Corporation Ltd - India
- International Coal Ventures Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Indonesian Coal Mining Association
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- Indika Energy - Indonesia
- Mjunction Services Limited - India
- Miang Besar Coal Terminal - Indonesia
- TeaM Sual Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Essar Steel Hazira Ltd - India
- Chamber of Mines of South Africa
- Electricity Generating Authority of Thailand
- LBH Netherlands Bv - Netherlands
- Maheswari Brothers Coal Limited - India
- New Zealand Coal & Carbon
- Tamil Nadu electricity Board
- Power Finance Corporation Ltd., India
- Oldendorff Carriers - Singapore
- PNOC Exploration Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Bukit Makmur.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Eastern Coal Council - USA
- Star Paper Mills Limited - India
- Indo Tambangraya Megah - Indonesia
- Kaltim Prima Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Samtan Co., Ltd - South Korea
- Kapuas Tunggal Persada - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Interocean Group of Companies - India
- Energy Development Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Heidelberg Cement - Germany
- Renaissance Capital - South Africa
- Binh Thuan Hamico - Vietnam
- Global Green Power PLC Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Global Coal Blending Company Limited - Australia
- MS Steel International - UAE
- Sarangani Energy Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Siam City Cement PLC, Thailand
- Kideco Jaya Agung - Indonesia
- Tata Chemicals Ltd - India
- Wood Mackenzie - Singapore
- Salva Resources Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- South Luzon Thermal Energy Corporation
- The Treasury - Australian Government
- ICICI Bank Limited - India
- Standard Chartered Bank - UAE
- PTC India Limited - India
- Iligan Light & Power Inc, Philippines
- Deloitte Consulting - India
- Kumho Petrochemical, South Korea
- Rio Tinto Coal - Australia
- Ceylon Electricity Board - Sri Lanka
- SN Aboitiz Power Inc, Philippines
- Edison Trading Spa - Italy
- Vizag Seaport Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercator Lines Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bhatia International Limited - India
- Sical Logistics Limited - India
- Riau Bara Harum - Indonesia
- Central Electricity Authority - India
- Merrill Lynch Commodities Europe
- Goldman Sachs - Singapore
- SMC Global Power, Philippines
- Larsen & Toubro Limited - India
- Barasentosa Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Malabar Cements Ltd - India
- Siam City Cement - Thailand
- GAC Shipping (India) Pvt Ltd
- Orica Mining Services - Indonesia
- Energy Link Ltd, New Zealand
- Global Business Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Bayan Resources Tbk. - Indonesia
- Kartika Selabumi Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Attock Cement Pakistan Limited
- Independent Power Producers Association of India
- Parry Sugars Refinery, India
- Port Waratah Coal Services - Australia
- San Jose City I Power Corp, Philippines
- Grasim Industreis Ltd - India
- Antam Resourcindo - Indonesia
- Metalloyd Limited - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- GMR Energy Limited - India
- Wilmar Investment Holdings
- Gujarat Sidhee Cement - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Madhucon Powers Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Electricity Authority, New Zealand
- Banpu Public Company Limited - Thailand
- Cement Manufacturers Association - India
- London Commodity Brokers - England
- Parliament of New Zealand
- McConnell Dowell - Australia
- Therma Luzon, Inc, Philippines
- Coalindo Energy - Indonesia
- Vedanta Resources Plc - India
- Romanian Commodities Exchange
- Thiess Contractors Indonesia
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Africa Commodities Group - South Africa
- Bukit Baiduri Energy - Indonesia
- Mercuria Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- Holcim Trading Pte Ltd - Singapore
- IEA Clean Coal Centre - UK
- Bangladesh Power Developement Board
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Baramulti Group, Indonesia
- Anglo American - United Kingdom
- Trasteel International SA, Italy
- Xindia Steels Limited - India
- Thai Mozambique Logistica
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- Makarim & Taira - Indonesia
- Minerals Council of Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bharathi Cement Corporation - India
- Eastern Energy - Thailand
- The State Trading Corporation of India Ltd
- Orica Australia Pty. Ltd.
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Marubeni Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Simpson Spence & Young - Indonesia
- Aditya Birla Group - India
- PowerSource Philippines DevCo
- Pendopo Energi Batubara - Indonesia
- India Bulls Power Limited - India
- Uttam Galva Steels Limited - India
- The University of Queensland
- Kobexindo Tractors - Indoneisa
- Mintek Dendrill Indonesia
- Ministry of Finance - Indonesia
- CNBM International Corporation - China
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sojitz Corporation - Japan
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