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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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Friday, 27 September 19
LOWDOWN ON INCOTERMS 2020 OVERHAUL - BALTIC EXCHANGE
KNOWLEDGE TO ELEVATE
This ninth revision of Incoterms is changed in style and substance. The revisions improve certain aspects of Incoterms 20 ...
Thursday, 26 September 19
INDIA INCREASES ITS ANNUAL COAL PRODUCTION BY 2.7% PER YEAR FROM 850 MILLION SHORT TONS IN 2018 TO 2 BILLION SHORT TONS BY 2050 - EIA
Worldwide coal production holds steady at about 8 billion short tons, or 160 quadrillion British thermal units (Btu), per year through 2040. Inc ...
Wednesday, 25 September 19
SHIPPING MARKET INSIGHT - INTERMODAL
In the past five months there has been significant activity in the asset market with the dry bulk segment being by far the most volatile in terms o ...
Tuesday, 24 September 19
9TH ANNUAL SUPPLY CHAIN INNOVATION SUMMIT 2019 ASIA PACIFIC
Summit: 9th Annual Supply Chain Innovation Summit 2019 Asia Pacific
Host: Ace Events
Website: http: ...
Monday, 23 September 19
SUPRAMAX: THE ASIAN ARENA IT WAS A SLOW START, BUT DEMAND INCREASED AS THE WEEK WENT ON - BALTIC BRIEFING
Capesize
The market trended down over this past week, breaking the market out of its upward trending range. While the market traded sideways at ...
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- Baramulti Group, Indonesia
- Thiess Contractors Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- TeaM Sual Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Xindia Steels Limited - India
- Altura Mining Limited, Indonesia
- Energy Development Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- SN Aboitiz Power Inc, Philippines
- SMG Consultants - Indonesia
- Singapore Mercantile Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sakthi Sugars Limited - India
- Uttam Galva Steels Limited - India
- Medco Energi Mining Internasional
- Sarangani Energy Corporation, Philippines
- Dalmia Cement Bharat India
- Oldendorff Carriers - Singapore
- Kumho Petrochemical, South Korea
- Larsen & Toubro Limited - India
- San Jose City I Power Corp, Philippines
- New Zealand Coal & Carbon
- ICICI Bank Limited - India
- Iligan Light & Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Economic Council, Georgia
- Bukit Makmur.PT - Indonesia
- Vizag Seaport Private Limited - India
- Makarim & Taira - Indonesia
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
- Petrochimia International Co. Ltd.- Taiwan
- Coal and Oil Company - UAE
- Bhatia International Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Power Finance Corporation Ltd., India
- Kalimantan Lumbung Energi - Indonesia
- Planning Commission, India
- Sical Logistics Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Energy - Thailand
- Siam City Cement PLC, Thailand
- Jindal Steel & Power Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Meralco Power Generation, Philippines
- Ministry of Finance - Indonesia
- GMR Energy Limited - India
- India Bulls Power Limited - India
- PNOC Exploration Corporation - Philippines
- Heidelberg Cement - Germany
- Electricity Authority, New Zealand
- Intertek Mineral Services - Indonesia
- Samtan Co., Ltd - South Korea
- Banpu Public Company Limited - Thailand
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
- GVK Power & Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cement Manufacturers Association - India
- Krishnapatnam Port Company Ltd. - India
- Kaltim Prima Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Maharashtra Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- Indian Energy Exchange, India
- Billiton Holdings Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Vedanta Resources Plc - India
- Mercuria Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Aditya Birla Group - India
- Indika Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Kobexindo Tractors - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Videocon Industries ltd - India
- Orica Mining Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Lanco Infratech Ltd - India
- Karaikal Port Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Bangladesh Power Developement Board
- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- Independent Power Producers Association of India
- Metalloyd Limited - United Kingdom
- The State Trading Corporation of India Ltd
- OPG Power Generation Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Pendopo Energi Batubara - Indonesia
- LBH Netherlands Bv - Netherlands
- Formosa Plastics Group - Taiwan
- Marubeni Corporation - India
- Thai Mozambique Logistica
- Price Waterhouse Coopers - Russia
- Kartika Selabumi Mining - Indonesia
- Carbofer General Trading SA - India
- Renaissance Capital - South Africa
- Sinarmas Energy and Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- ASAPP Information Group - India
- Kepco SPC Power Corporation, Philippines
- Central Java Power - Indonesia
- MS Steel International - UAE
- Standard Chartered Bank - UAE
- Attock Cement Pakistan Limited
- Latin American Coal - Colombia
- Semirara Mining Corp, Philippines
- Edison Trading Spa - Italy
- Rashtriya Ispat Nigam Limited - India
- Australian Commodity Traders Exchange
- Coalindo Energy - Indonesia
- White Energy Company Limited
- The Treasury - Australian Government
- Parliament of New Zealand
- Posco Energy - South Korea
- Siam City Cement - Thailand
- Ambuja Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- The University of Queensland
- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
- Maheswari Brothers Coal Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- Indonesian Coal Mining Association
- Bayan Resources Tbk. - Indonesia
- Riau Bara Harum - Indonesia
- GAC Shipping (India) Pvt Ltd
- Goldman Sachs - Singapore
- Manunggal Multi Energi - Indonesia
- Ministry of Transport, Egypt
- Anglo American - United Kingdom
- Barasentosa Lestari - Indonesia
- Madhucon Powers Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Deloitte Consulting - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Star Paper Mills Limited - India
- Global Coal Blending Company Limited - Australia
- Bhushan Steel Limited - India
- Coastal Gujarat Power Limited - India
- Wood Mackenzie - Singapore
- Antam Resourcindo - Indonesia
- Petron Corporation, Philippines
- Trasteel International SA, Italy
- Bulk Trading Sa - Switzerland
- Africa Commodities Group - South Africa
- Bukit Baiduri Energy - Indonesia
- Commonwealth Bank - Australia
- Agrawal Coal Company - India
- PTC India Limited - India
- Salva Resources Pvt Ltd - India
- Mjunction Services Limited - India
- Ceylon Electricity Board - Sri Lanka
- Jaiprakash Power Ventures ltd
- Timah Investasi Mineral - Indoneisa
- Orica Australia Pty. Ltd.
- Sindya Power Generating Company Private Ltd
- PowerSource Philippines DevCo
- Therma Luzon, Inc, Philippines
- Tata Chemicals Ltd - India
- Rio Tinto Coal - Australia
- Port Waratah Coal Services - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Minerals Council of Australia
- Kapuas Tunggal Persada - Indonesia
- VISA Power Limited - India
- Essar Steel Hazira Ltd - India
- Australian Coal Association
- Parry Sugars Refinery, India
- Binh Thuan Hamico - Vietnam
- Malabar Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Grasim Industreis Ltd - India
- Interocean Group of Companies - India
- Tamil Nadu electricity Board
- CIMB Investment Bank - Malaysia
- Globalindo Alam Lestari - Indonesia
- Wilmar Investment Holdings
- McConnell Dowell - Australia
- Kideco Jaya Agung - Indonesia
- Global Business Power Corporation, Philippines
- SMC Global Power, Philippines
- Mercator Lines Limited - India
- Energy Link Ltd, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Meenaskhi Energy Private Limited - India
- Bharathi Cement Corporation - India
- Sojitz Corporation - Japan
- Merrill Lynch Commodities Europe
- Ministry of Mines - Canada
- CNBM International Corporation - China
- Electricity Generating Authority of Thailand
- European Bulk Services B.V. - Netherlands
- Georgia Ports Authority, United States
- IHS Mccloskey Coal Group - USA
- Neyveli Lignite Corporation Ltd, - India
- London Commodity Brokers - England
- Chamber of Mines of South Africa
- Borneo Indobara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- South Luzon Thermal Energy Corporation
- Indogreen Group - Indonesia
- Mintek Dendrill Indonesia
- Asmin Koalindo Tuhup - Indonesia
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