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