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