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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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Thursday, 16 May 19
SUPRAMAX: INDO/CHINA COAL RV TRADING AROUND US$ 9,000 BSS S.CHINA DELIVERY - FEARNLEYS
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This volatile segment is trying to find a clear direction from the present US$ 12,000/day earnings for standard units says Fearnleys W ...
Wednesday, 15 May 19
SHIPPING MARKET INSIGHT - THEODORE NTALAKOS
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As of May 1st, the U.S. has ended waivers to the sanctions that had allowed the top buyers of Irani ...
Monday, 13 May 19
INDONESIAN COAL PRICE REFERENCE CONTINUES TO FALL
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Monday, 13 May 19
SUPRAMAX: SOUTHEAST ASIA THE MARKET SAW BETTER DEMAND - BALTIC BRIEFING
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The market continued its rollercoaster ride last week opening with negative sentiment, but turning around in dramatic fashion by the week& ...
Thursday, 09 May 19
DEEP OFFSHORE SOUTHEAST ASIA CONGRESS 2019
Deep Offshore Southeast Asia Congress 2019
Event Date:2-3th July. 2019t
Location: Jakarta, Indonesia
Sarawak Shell Berhad (S ...
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- GVK Power & Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Billiton Holdings Pty Ltd - Australia
- The University of Queensland
- Intertek Mineral Services - Indonesia
- Indian Energy Exchange, India
- Eastern Coal Council - USA
- Bharathi Cement Corporation - India
- Petron Corporation, Philippines
- Electricity Generating Authority of Thailand
- Minerals Council of Australia
- Bhatia International Limited - India
- Energy Link Ltd, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Ministry of Mines - Canada
- Ministry of Transport, Egypt
- San Jose City I Power Corp, Philippines
- McConnell Dowell - Australia
- Planning Commission, India
- Ceylon Electricity Board - Sri Lanka
- Jaiprakash Power Ventures ltd
- Tamil Nadu electricity Board
- Romanian Commodities Exchange
- CNBM International Corporation - China
- Malabar Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Madhucon Powers Ltd - India
- PowerSource Philippines DevCo
- Bayan Resources Tbk. - Indonesia
- Kumho Petrochemical, South Korea
- Meralco Power Generation, Philippines
- Ind-Barath Power Infra Limited - India
- Eastern Energy - Thailand
- Parry Sugars Refinery, India
- Bhoruka Overseas - Indonesia
- Mercuria Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Gujarat Sidhee Cement - India
- OPG Power Generation Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Singapore Mercantile Exchange
- Medco Energi Mining Internasional
- Formosa Plastics Group - Taiwan
- Indogreen Group - Indonesia
- PNOC Exploration Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Mineral Development Corp Ltd - India
- Aboitiz Power Corporation - Philippines
- Siam City Cement - Thailand
- Vedanta Resources Plc - India
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Port Waratah Coal Services - Australia
- Kaltim Prima Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Indonesian Coal Mining Association
- Thiess Contractors Indonesia
- Rio Tinto Coal - Australia
- Larsen & Toubro Limited - India
- Carbofer General Trading SA - India
- Metalloyd Limited - United Kingdom
- Tata Chemicals Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- Interocean Group of Companies - India
- Xindia Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- Chamber of Mines of South Africa
- Heidelberg Cement - Germany
- Mercator Lines Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Oil Corporation Limited
- Star Paper Mills Limited - India
- Toyota Tsusho Corporation, Japan
- Georgia Ports Authority, United States
- SN Aboitiz Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Independent Power Producers Association of India
- Central Java Power - Indonesia
- Global Green Power PLC Corporation, Philippines
- Antam Resourcindo - Indonesia
- Globalindo Alam Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Africa Commodities Group - South Africa
- Bulk Trading Sa - Switzerland
- Kapuas Tunggal Persada - Indonesia
- Agrawal Coal Company - India
- SMC Global Power, Philippines
- Coalindo Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Directorate Of Revenue Intelligence - India
- Commonwealth Bank - Australia
- Mintek Dendrill Indonesia
- Siam City Cement PLC, Thailand
- Straits Asia Resources Limited - Singapore
- Alfred C Toepfer International GmbH - Germany
- Indo Tambangraya Megah - Indonesia
- Ministry of Finance - Indonesia
- Bukit Makmur.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- South Luzon Thermal Energy Corporation
- VISA Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Kartika Selabumi Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Gujarat Electricity Regulatory Commission - India
- ASAPP Information Group - India
- The Treasury - Australian Government
- Bank of Tokyo Mitsubishi UFJ Ltd
- Simpson Spence & Young - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- Attock Cement Pakistan Limited
- Thai Mozambique Logistica
- Oldendorff Carriers - Singapore
- International Coal Ventures Pvt Ltd - India
- Dalmia Cement Bharat India
- Jindal Steel & Power Ltd - India
- Sakthi Sugars Limited - India
- Power Finance Corporation Ltd., India
- Bahari Cakrawala Sebuku - Indonesia
- The State Trading Corporation of India Ltd
- Pendopo Energi Batubara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Renaissance Capital - South Africa
- Wilmar Investment Holdings
- Karbindo Abesyapradhi - Indoneisa
- Indika Energy - Indonesia
- Bhushan Steel Limited - India
- Riau Bara Harum - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- SMG Consultants - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- White Energy Company Limited
- Australian Commodity Traders Exchange
- PTC India Limited - India
- Sarangani Energy Corporation, Philippines
- Sical Logistics Limited - India
- Edison Trading Spa - Italy
- AsiaOL BioFuels Corp., Philippines
- Kobexindo Tractors - Indoneisa
- Energy Development Corp, Philippines
- Orica Mining Services - Indonesia
- India Bulls Power Limited - India
- Mjunction Services Limited - India
- Central Electricity Authority - India
- Manunggal Multi Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Australian Coal Association
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Global Coal Blending Company Limited - Australia
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Holcim Trading Pte Ltd - Singapore
- Timah Investasi Mineral - Indoneisa
- Meenaskhi Energy Private Limited - India
- Deloitte Consulting - India
- Marubeni Corporation - India
- LBH Netherlands Bv - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Economic Council, Georgia
- Cement Manufacturers Association - India
- TNB Fuel Sdn Bhd - Malaysia
- London Commodity Brokers - England
- Standard Chartered Bank - UAE
- Makarim & Taira - Indonesia
- Uttam Galva Steels Limited - India
- GMR Energy Limited - India
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Coal and Oil Company - UAE
- Vizag Seaport Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Trasteel International SA, Italy
- Aditya Birla Group - India
- Latin American Coal - Colombia
- Ambuja Cements Ltd - India
- Videocon Industries ltd - India
- TeaM Sual Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Bangladesh Power Developement Board
- New Zealand Coal & Carbon
- Iligan Light & Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Sindya Power Generating Company Private Ltd
- Sree Jayajothi Cements Limited - India
- ICICI Bank Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Baiduri Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Savvy Resources Ltd - HongKong
- IEA Clean Coal Centre - UK
- Posco Energy - South Korea
- Global Business Power Corporation, Philippines
- Goldman Sachs - Singapore
- Lanco Infratech Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Therma Luzon, Inc, Philippines
- Parliament of New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- MS Steel International - UAE
- GAC Shipping (India) Pvt Ltd
- Electricity Authority, New Zealand
- Borneo Indobara - Indonesia
- Barasentosa Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Grasim Industreis Ltd - India
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