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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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Sunday, 09 June 19
SUPRAMAX: ASIA LOST GROUND; THE INDIAN OCEAN SAW SLOWER ACTIVITY - BALTIC BRIEFING
Capesize
The market continued in an unusually steady ascent last week. With no major news in the market, each day improved on the last, breakin ...
Friday, 07 June 19
KOEN INVITED BIDS FOR 1.87 MILLION TONS OF COAL FOR JULY - OCTOBER 2019 DELIVERY
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 1,700,000 to 1,870,000 Metric Tons ...
Wednesday, 05 June 19
SHIPPING MARKET INSIGHT - INTERMODAL
The first semester of 2019 started as a fairly positive semester for the offshore sector whilst there was a recovery on crude prices, as well as a ...
Tuesday, 04 June 19
MARPOL ANNEX VI - SULPHUR CAP 2020 - DEMYSTIFYING THE FONAR - SKULD
KNOWLEDGE TO ELEVATE
Fuel Oil Non-Availability Report (FONAR) is primarily a discretionary tool for a Member State to lessen the breach of MAR ...
Monday, 03 June 19
SUPRAMAX: A 61,000 TONNER OPEN NORTH CHINA, FIXING A TRIP VIA INDONESIA, REDELIVERY SOUTHEAST ASIA AT $7,500 - BALTIC BRIEFING
Capesize
The market continued its steady ascent over the past week to improved levels. The TC average opened the previous week at $12,243 and c ...
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- International Coal Ventures Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Electricity Generating Authority of Thailand
- Meralco Power Generation, Philippines
- ICICI Bank Limited - India
- Baramulti Group, Indonesia
- GVK Power & Infra Limited - India
- Price Waterhouse Coopers - Russia
- Tata Chemicals Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- Metalloyd Limited - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Vedanta Resources Plc - India
- Siam City Cement PLC, Thailand
- Kumho Petrochemical, South Korea
- Toyota Tsusho Corporation, Japan
- AsiaOL BioFuels Corp., Philippines
- London Commodity Brokers - England
- Carbofer General Trading SA - India
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- Star Paper Mills Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- McConnell Dowell - Australia
- Wilmar Investment Holdings
- Kapuas Tunggal Persada - Indonesia
- Bayan Resources Tbk. - Indonesia
- Australian Coal Association
- Riau Bara Harum - Indonesia
- IEA Clean Coal Centre - UK
- Chamber of Mines of South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- SMC Global Power, Philippines
- PowerSource Philippines DevCo
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Mining Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- New Zealand Coal & Carbon
- Vizag Seaport Private Limited - India
- Bangladesh Power Developement Board
- Cement Manufacturers Association - India
- Indian Energy Exchange, India
- MS Steel International - UAE
- Ambuja Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Kalimantan Lumbung Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Formosa Plastics Group - Taiwan
- Goldman Sachs - Singapore
- Rashtriya Ispat Nigam Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Deloitte Consulting - India
- Mintek Dendrill Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Parry Sugars Refinery, India
- Ministry of Mines - Canada
- Kobexindo Tractors - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Bhushan Steel Limited - India
- IHS Mccloskey Coal Group - USA
- Semirara Mining Corp, Philippines
- Salva Resources Pvt Ltd - India
- Commonwealth Bank - Australia
- SMG Consultants - Indonesia
- Lanco Infratech Ltd - India
- Jaiprakash Power Ventures ltd
- Videocon Industries ltd - India
- Iligan Light & Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- GAC Shipping (India) Pvt Ltd
- Kaltim Prima Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- TeaM Sual Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Coalindo Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- The University of Queensland
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Tamil Nadu electricity Board
- Latin American Coal - Colombia
- Binh Thuan Hamico - Vietnam
- Globalindo Alam Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- Coal and Oil Company - UAE
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- Attock Cement Pakistan Limited
- Independent Power Producers Association of India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rio Tinto Coal - Australia
- Krishnapatnam Port Company Ltd. - India
- Merrill Lynch Commodities Europe
- Eastern Coal Council - USA
- Billiton Holdings Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Port Waratah Coal Services - Australia
- Global Coal Blending Company Limited - Australia
- Energy Development Corp, Philippines
- PTC India Limited - India
- Bukit Baiduri Energy - Indonesia
- The Treasury - Australian Government
- Standard Chartered Bank - UAE
- The State Trading Corporation of India Ltd
- Makarim & Taira - Indonesia
- Madhucon Powers Ltd - India
- Central Electricity Authority - India
- Romanian Commodities Exchange
- India Bulls Power Limited - India
- Global Business Power Corporation, Philippines
- Marubeni Corporation - India
- Anglo American - United Kingdom
- Sarangani Energy Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Asmin Koalindo Tuhup - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meenaskhi Energy Private Limited - India
- Barasentosa Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- Australian Commodity Traders Exchange
- Maheswari Brothers Coal Limited - India
- Mjunction Services Limited - India
- Eastern Energy - Thailand
- VISA Power Limited - India
- Uttam Galva Steels Limited - India
- Essar Steel Hazira Ltd - India
- Savvy Resources Ltd - HongKong
- South Luzon Thermal Energy Corporation
- Siam City Cement - Thailand
- Power Finance Corporation Ltd., India
- Borneo Indobara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Thiess Contractors Indonesia
- Orica Australia Pty. Ltd.
- Indonesian Coal Mining Association
- Trasteel International SA, Italy
- Minerals Council of Australia
- Jorong Barutama Greston.PT - Indonesia
- GMR Energy Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wood Mackenzie - Singapore
- Posco Energy - South Korea
- Edison Trading Spa - Italy
- PetroVietnam Power Coal Import and Supply Company
- CNBM International Corporation - China
- Therma Luzon, Inc, Philippines
- Samtan Co., Ltd - South Korea
- White Energy Company Limited
- Kohat Cement Company Ltd. - Pakistan
- Agrawal Coal Company - India
- Coastal Gujarat Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- Altura Mining Limited, Indonesia
- Dalmia Cement Bharat India
- Karaikal Port Pvt Ltd - India
- Indika Energy - Indonesia
- Mercuria Energy - Indonesia
- Sical Logistics Limited - India
- Georgia Ports Authority, United States
- Parliament of New Zealand
- Economic Council, Georgia
- Petron Corporation, Philippines
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- Renaissance Capital - South Africa
- Sinarmas Energy and Mining - Indonesia
- Planning Commission, India
- Thai Mozambique Logistica
- Xindia Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- OPG Power Generation Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Intertek Mineral Services - Indonesia
- Africa Commodities Group - South Africa
- Oldendorff Carriers - Singapore
- Aditya Birla Group - India
- Gujarat Mineral Development Corp Ltd - India
- PNOC Exploration Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Timah Investasi Mineral - Indoneisa
- Indian Oil Corporation Limited
- Straits Asia Resources Limited - Singapore
- ASAPP Information Group - India
- Gujarat Sidhee Cement - India
- Kartika Selabumi Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Malabar Cements Ltd - India
- Indogreen Group - Indonesia
- Energy Link Ltd, New Zealand
- Bulk Trading Sa - Switzerland
- Singapore Mercantile Exchange
- Simpson Spence & Young - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bhatia International Limited - India
- Ministry of Finance - Indonesia
- Leighton Contractors Pty Ltd - Australia
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