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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, 06 February 19
FEBRUARY 2019 INDONESIA'S COAL REFERENCE PRICE FELL 8.83 PERCENT YOY
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
Wednesday, 06 February 19
THE BDI HAS EASED BACK TO 645 BP, ITS LOWEST LEVEL SINCE AUGUST 2016 - ALLIED
The dry bulk sector is in the doldrums, with most market participants seemingly left utterly perplexed, and simultaneously, in pursuit of any posit ...
Monday, 04 February 19
COAL STILL IN HIGH DEMAND GLOBALLY
Although the world is switching to renewable energy there is still a big demand for coal around the globe.
This is according to Cany ...
Friday, 01 February 19
ULTRAMAX WAS FIXED DELIVERY KALIMANTAN, FOR TRIP TO WEST COAST INDIA AT $7,000 - BALTIC BRIEFING
Capesize
The Vale dam tragedy sparked a sharp fall in rates across all regions even where tonnage remained tight. The potential loss of product ...
Friday, 01 February 19
SEMBCORP SELECTS NORDEN FOR LONG-TERM INDIAN CONTRACT
NORDEN A/S has signed a 10-year Panamax Contract of Affreightment (COA) with Indian utility firm Sembcorp Energy India Ltd.
From 1 A ...
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- CIMB Investment Bank - Malaysia
- Indogreen Group - Indonesia
- Ministry of Finance - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Heidelberg Cement - Germany
- Leighton Contractors Pty Ltd - Australia
- PTC India Limited - India
- Iligan Light & Power Inc, Philippines
- Goldman Sachs - Singapore
- Gujarat Mineral Development Corp Ltd - India
- SMG Consultants - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- TeaM Sual Corporation - Philippines
- Latin American Coal - Colombia
- Ind-Barath Power Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
- Deloitte Consulting - India
- Wilmar Investment Holdings
- Independent Power Producers Association of India
- Vedanta Resources Plc - India
- Commonwealth Bank - Australia
- Binh Thuan Hamico - Vietnam
- Intertek Mineral Services - Indonesia
- The State Trading Corporation of India Ltd
- Therma Luzon, Inc, Philippines
- Vizag Seaport Private Limited - India
- Jaiprakash Power Ventures ltd
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- Kalimantan Lumbung Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Dalmia Cement Bharat India
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- Petron Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Eastern Coal Council - USA
- Samtan Co., Ltd - South Korea
- Jindal Steel & Power Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Miang Besar Coal Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Merrill Lynch Commodities Europe
- Posco Energy - South Korea
- Planning Commission, India
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- McConnell Dowell - Australia
- PNOC Exploration Corporation - Philippines
- Australian Commodity Traders Exchange
- Tamil Nadu electricity Board
- India Bulls Power Limited - India
- Manunggal Multi Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bhatia International Limited - India
- PowerSource Philippines DevCo
- Edison Trading Spa - Italy
- Straits Asia Resources Limited - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Sidhee Cement - India
- Pendopo Energi Batubara - Indonesia
- Karaikal Port Pvt Ltd - India
- Tata Chemicals Ltd - India
- Madhucon Powers Ltd - India
- Riau Bara Harum - Indonesia
- Bharathi Cement Corporation - India
- Agrawal Coal Company - India
- Krishnapatnam Port Company Ltd. - India
- Bhushan Steel Limited - India
- Ambuja Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Australian Coal Association
- San Jose City I Power Corp, Philippines
- Mercator Lines Limited - India
- Bangladesh Power Developement Board
- Power Finance Corporation Ltd., India
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- Rio Tinto Coal - Australia
- Borneo Indobara - Indonesia
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Romanian Commodities Exchange
- London Commodity Brokers - England
- Parliament of New Zealand
- Star Paper Mills Limited - India
- Coalindo Energy - Indonesia
- Renaissance Capital - South Africa
- Central Electricity Authority - India
- Bhoruka Overseas - Indonesia
- GVK Power & Infra Limited - India
- Lanco Infratech Ltd - India
- Maheswari Brothers Coal Limited - India
- Thiess Contractors Indonesia
- Simpson Spence & Young - Indonesia
- International Coal Ventures Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Mintek Dendrill Indonesia
- Metalloyd Limited - United Kingdom
- Savvy Resources Ltd - HongKong
- OPG Power Generation Pvt Ltd - India
- Energy Development Corp, Philippines
- White Energy Company Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Formosa Plastics Group - Taiwan
- Trasteel International SA, Italy
- Indian Oil Corporation Limited
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Economic Council, Georgia
- Semirara Mining Corp, Philippines
- ICICI Bank Limited - India
- Minerals Council of Australia
- The Treasury - Australian Government
- Aditya Birla Group - India
- Kideco Jaya Agung - Indonesia
- Larsen & Toubro Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Banpu Public Company Limited - Thailand
- Price Waterhouse Coopers - Russia
- Videocon Industries ltd - India
- Ministry of Transport, Egypt
- Offshore Bulk Terminal Pte Ltd, Singapore
- Anglo American - United Kingdom
- Grasim Industreis Ltd - India
- Baramulti Group, Indonesia
- Kumho Petrochemical, South Korea
- Uttam Galva Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercuria Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Port Waratah Coal Services - Australia
- Altura Mining Limited, Indonesia
- Kepco SPC Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- MS Steel International - UAE
- Siam City Cement PLC, Thailand
- Sakthi Sugars Limited - India
- Rashtriya Ispat Nigam Limited - India
- Orica Australia Pty. Ltd.
- Global Coal Blending Company Limited - Australia
- Medco Energi Mining Internasional
- Kohat Cement Company Ltd. - Pakistan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asmin Koalindo Tuhup - Indonesia
- CNBM International Corporation - China
- Global Business Power Corporation, Philippines
- Coal and Oil Company - UAE
- Sical Logistics Limited - India
- Salva Resources Pvt Ltd - India
- Cement Manufacturers Association - India
- SMC Global Power, Philippines
- ASAPP Information Group - India
- Siam City Cement - Thailand
- Sinarmas Energy and Mining - Indonesia
- Eastern Energy - Thailand
- Coastal Gujarat Power Limited - India
- Chettinad Cement Corporation Ltd - India
- VISA Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Indika Energy - Indonesia
- Orica Mining Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Interocean Group of Companies - India
- Sojitz Corporation - Japan
- Parry Sugars Refinery, India
- Indonesian Coal Mining Association
- Directorate Of Revenue Intelligence - India
- GAC Shipping (India) Pvt Ltd
- Georgia Ports Authority, United States
- Sindya Power Generating Company Private Ltd
- IEA Clean Coal Centre - UK
- Makarim & Taira - Indonesia
- Xindia Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- Antam Resourcindo - Indonesia
- Globalindo Alam Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- New Zealand Coal & Carbon
- Aboitiz Power Corporation - Philippines
- Attock Cement Pakistan Limited
- Essar Steel Hazira Ltd - India
- Kobexindo Tractors - Indoneisa
- Central Java Power - Indonesia
- Malabar Cements Ltd - India
- Oldendorff Carriers - Singapore
- Bayan Resources Tbk. - Indonesia
- Kartika Selabumi Mining - Indonesia
- Thai Mozambique Logistica
- Timah Investasi Mineral - Indoneisa
- Barasentosa Lestari - Indonesia
- Carbofer General Trading SA - India
- Marubeni Corporation - India
- Meenaskhi Energy Private Limited - India
- Energy Link Ltd, New Zealand
- Indian Energy Exchange, India
- Standard Chartered Bank - UAE
- Directorate General of MIneral and Coal - Indonesia
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