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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, 13 November 19
INDONESIAN NOVEMBER COAL PRICE REFERENCE LOGS FIRST GAIN SINCE AUGUST
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised up the benchmark price of Indonesian thermal co ...
Wednesday, 13 November 19
SHIPPING MARKET INSIGHT - INTERMODAL
The improvements seen in the dry bulk market during the unexpectedly strong Q3 brought enthusiasm and optimism for a last quarter rally. Indeed as ...
Tuesday, 12 November 19
COAL IMPORTS AT MAJOR PORTS SLIP 18 PC TO 51 MT IN APRIL-OCTOBER - ECONOMIC TIMES
The Indian Ports Association (IPA), which maintains cargo data handled by these 12 ports, in its recent report, said "percentage variation fro ...
Monday, 11 November 19
EMINENT MARITIME ORGANIZATIONS AND INDIVIDUALS WERE HONORED
SHIPTEK 2019 Anchors in Greece for its 12th edition.
Eminent Maritime Organizations and Individuals were honored
Greec ...
Wednesday, 06 November 19
SHIPPING MARKET INSIGHT - INTERMODAL
With less than two months before the end of the year, the shipping and refining industries have already taken measures and invested to accommodate ...
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- Eastern Energy - Thailand
- Antam Resourcindo - Indonesia
- Meenaskhi Energy Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Siam City Cement - Thailand
- The Treasury - Australian Government
- Straits Asia Resources Limited - Singapore
- Georgia Ports Authority, United States
- Videocon Industries ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GMR Energy Limited - India
- Trasteel International SA, Italy
- Minerals Council of Australia
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Sidhee Cement - India
- Cigading International Bulk Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Wilmar Investment Holdings
- Vizag Seaport Private Limited - India
- Makarim & Taira - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Billiton Holdings Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Attock Cement Pakistan Limited
- Latin American Coal - Colombia
- Indonesian Coal Mining Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Essar Steel Hazira Ltd - India
- Thai Mozambique Logistica
- Global Green Power PLC Corporation, Philippines
- Electricity Authority, New Zealand
- Global Business Power Corporation, Philippines
- SMG Consultants - Indonesia
- GAC Shipping (India) Pvt Ltd
- AsiaOL BioFuels Corp., Philippines
- Alfred C Toepfer International GmbH - Germany
- OPG Power Generation Pvt Ltd - India
- Thiess Contractors Indonesia
- Pendopo Energi Batubara - Indonesia
- Xindia Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- San Jose City I Power Corp, Philippines
- Vedanta Resources Plc - India
- Madhucon Powers Ltd - India
- Kaltim Prima Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Baramulti Group, Indonesia
- Cement Manufacturers Association - India
- Jorong Barutama Greston.PT - Indonesia
- Rio Tinto Coal - Australia
- Price Waterhouse Coopers - Russia
- Sindya Power Generating Company Private Ltd
- Electricity Generating Authority of Thailand
- Altura Mining Limited, Indonesia
- Lanco Infratech Ltd - India
- Medco Energi Mining Internasional
- Bukit Baiduri Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kapuas Tunggal Persada - Indonesia
- Kideco Jaya Agung - Indonesia
- Maheswari Brothers Coal Limited - India
- Meralco Power Generation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Tamil Nadu electricity Board
- Mintek Dendrill Indonesia
- Bulk Trading Sa - Switzerland
- Heidelberg Cement - Germany
- Bhoruka Overseas - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Simpson Spence & Young - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- Savvy Resources Ltd - HongKong
- Binh Thuan Hamico - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Tata Chemicals Ltd - India
- Romanian Commodities Exchange
- London Commodity Brokers - England
- Bahari Cakrawala Sebuku - Indonesia
- Edison Trading Spa - Italy
- Samtan Co., Ltd - South Korea
- PTC India Limited - India
- Marubeni Corporation - India
- Posco Energy - South Korea
- Africa Commodities Group - South Africa
- Timah Investasi Mineral - Indoneisa
- South Luzon Thermal Energy Corporation
- Aboitiz Power Corporation - Philippines
- Coalindo Energy - Indonesia
- Wood Mackenzie - Singapore
- CIMB Investment Bank - Malaysia
- PNOC Exploration Corporation - Philippines
- Orica Australia Pty. Ltd.
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Sical Logistics Limited - India
- Merrill Lynch Commodities Europe
- Riau Bara Harum - Indonesia
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- Australian Coal Association
- Power Finance Corporation Ltd., India
- IHS Mccloskey Coal Group - USA
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- Planning Commission, India
- India Bulls Power Limited - India
- Interocean Group of Companies - India
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Sakthi Sugars Limited - India
- Miang Besar Coal Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining Corp, Philippines
- Jindal Steel & Power Ltd - India
- Singapore Mercantile Exchange
- Kalimantan Lumbung Energi - Indonesia
- Central Electricity Authority - India
- Indo Tambangraya Megah - Indonesia
- Agrawal Coal Company - India
- Anglo American - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Metalloyd Limited - United Kingdom
- Indika Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bhushan Steel Limited - India
- Toyota Tsusho Corporation, Japan
- Mercuria Energy - Indonesia
- GVK Power & Infra Limited - India
- MS Steel International - UAE
- Bharathi Cement Corporation - India
- Bhatia International Limited - India
- Jaiprakash Power Ventures ltd
- VISA Power Limited - India
- Standard Chartered Bank - UAE
- SMC Global Power, Philippines
- New Zealand Coal & Carbon
- TNB Fuel Sdn Bhd - Malaysia
- Coastal Gujarat Power Limited - India
- Sarangani Energy Corporation, Philippines
- ICICI Bank Limited - India
- Gujarat Mineral Development Corp Ltd - India
- International Coal Ventures Pvt Ltd - India
- Economic Council, Georgia
- Malabar Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- Larsen & Toubro Limited - India
- Ambuja Cements Ltd - India
- Therma Luzon, Inc, Philippines
- Carbofer General Trading SA - India
- Renaissance Capital - South Africa
- Kartika Selabumi Mining - Indonesia
- Ministry of Mines - Canada
- Gujarat Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Australian Commodity Traders Exchange
- Intertek Mineral Services - Indonesia
- CNBM International Corporation - China
- Coal and Oil Company - UAE
- Karbindo Abesyapradhi - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Indian Energy Exchange, India
- Grasim Industreis Ltd - India
- Banpu Public Company Limited - Thailand
- Oldendorff Carriers - Singapore
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- The State Trading Corporation of India Ltd
- LBH Netherlands Bv - Netherlands
- Sojitz Corporation - Japan
- Petron Corporation, Philippines
- Central Java Power - Indonesia
- Commonwealth Bank - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Aditya Birla Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Oil Corporation Limited
- ASAPP Information Group - India
- Eastern Coal Council - USA
- Mercator Lines Limited - India
- Krishnapatnam Port Company Ltd. - India
- Deloitte Consulting - India
- Manunggal Multi Energi - Indonesia
- Parliament of New Zealand
- SN Aboitiz Power Inc, Philippines
- White Energy Company Limited
- McConnell Dowell - Australia
- Dalmia Cement Bharat India
- Port Waratah Coal Services - Australia
- Sinarmas Energy and Mining - Indonesia
- Parry Sugars Refinery, India
- The University of Queensland
- PowerSource Philippines DevCo
- Energy Link Ltd, New Zealand
- TeaM Sual Corporation - Philippines
- Energy Development Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Iligan Light & Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kumho Petrochemical, South Korea
- Global Coal Blending Company Limited - Australia
- Borneo Indobara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chettinad Cement Corporation Ltd - India
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