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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, 11 January 19
SUPRAMAX: THE ASIAN ARENA HAD A MIXED START; LIMITED ACTION IN SOUTHEAST ASIA - THE BALTIC BRIEFING
Capesize
Dashed hopes summed up the first full week of the New Year. A slow start followed by a busy 24 hours of improving rates and a firming ...
Thursday, 10 January 19
BUNKER DELIVERY NOTE AMENDMENTS ENTER INTO FORCE AS SULPHUR 2020 REQUIREMENT LOOMS - IMO
KNOWLEDGE TO ELEVATE
Amendments to the bunker delivery note relating to the supply of marine fuel oil to ships which have fitted alternative m ...
Thursday, 10 January 19
WORLD TRADE IN THERMAL COAL IS ESTIMATED TO HAVE GROWN BY 1.0 PER CENT IN 2018 - DEPARTMENT OF INDUSTRY, AUSTRALIA
World Trade
World trade in thermal coal is estimated to have grown by 1.0 per cent to 1.1 billion tonnes in 2018 but it is expected to decline ...
Thursday, 10 January 19
PAKISTAN'S COAL IMPORTS TO SURGE TO 30 MILLION TONS PER ANNUM BY 2020 - CEO, PIB
Pakistan’s coal imports are estimated to surge to 30 million tons/annum from existing 20 million tons/annum by the year 2020, given the plann ...
Wednesday, 09 January 19
PANAMAX: THE PACIFIC SAW RELATIVELY GOOD DEMAND PARTICULARLY FROM INDONESIA AND NOPAC - BALTIC BRIEFING
Capesize
It was an active start to the New Year, with trading from West Australia maintaining momentum during the holiday period. Rates for Chi ...
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- Chamber of Mines of South Africa
- Sarangani Energy Corporation, Philippines
- Medco Energi Mining Internasional
- Riau Bara Harum - Indonesia
- Alfred C Toepfer International GmbH - Germany
- GAC Shipping (India) Pvt Ltd
- Central Electricity Authority - India
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- Georgia Ports Authority, United States
- Planning Commission, India
- GVK Power & Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Australian Commodity Traders Exchange
- Xindia Steels Limited - India
- Orica Mining Services - Indonesia
- Cement Manufacturers Association - India
- Neyveli Lignite Corporation Ltd, - India
- Vizag Seaport Private Limited - India
- Kartika Selabumi Mining - Indonesia
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- Indika Energy - Indonesia
- New Zealand Coal & Carbon
- Madhucon Powers Ltd - India
- Electricity Generating Authority of Thailand
- Directorate General of MIneral and Coal - Indonesia
- India Bulls Power Limited - India
- Energy Development Corp, Philippines
- The State Trading Corporation of India Ltd
- Indonesian Coal Mining Association
- Gujarat Mineral Development Corp Ltd - India
- Timah Investasi Mineral - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Minerals Council of Australia
- Jindal Steel & Power Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CIMB Investment Bank - Malaysia
- Mercuria Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Parliament of New Zealand
- Rashtriya Ispat Nigam Limited - India
- Carbofer General Trading SA - India
- Thai Mozambique Logistica
- San Jose City I Power Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Port Waratah Coal Services - Australia
- Bhoruka Overseas - Indonesia
- Petron Corporation, Philippines
- GMR Energy Limited - India
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- IEA Clean Coal Centre - UK
- Karbindo Abesyapradhi - Indoneisa
- Savvy Resources Ltd - HongKong
- Deloitte Consulting - India
- Semirara Mining Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Authority, New Zealand
- Agrawal Coal Company - India
- SN Aboitiz Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Samtan Co., Ltd - South Korea
- Makarim & Taira - Indonesia
- Kumho Petrochemical, South Korea
- Holcim Trading Pte Ltd - Singapore
- Coastal Gujarat Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Meralco Power Generation, Philippines
- Ministry of Transport, Egypt
- Pendopo Energi Batubara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Economic Council, Georgia
- Indo Tambangraya Megah - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bulk Trading Sa - Switzerland
- Kohat Cement Company Ltd. - Pakistan
- Tata Chemicals Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- Indian Oil Corporation Limited
- Edison Trading Spa - Italy
- Siam City Cement - Thailand
- CNBM International Corporation - China
- Kideco Jaya Agung - Indonesia
- Aboitiz Power Corporation - Philippines
- Sical Logistics Limited - India
- Iligan Light & Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- White Energy Company Limited
- Bukit Makmur.PT - Indonesia
- Global Business Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Power Finance Corporation Ltd., India
- Intertek Mineral Services - Indonesia
- Posco Energy - South Korea
- Thiess Contractors Indonesia
- Manunggal Multi Energi - Indonesia
- SMG Consultants - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Formosa Plastics Group - Taiwan
- Cigading International Bulk Terminal - Indonesia
- PowerSource Philippines DevCo
- AsiaOL BioFuels Corp., Philippines
- Star Paper Mills Limited - India
- Larsen & Toubro Limited - India
- Sree Jayajothi Cements Limited - India
- Romanian Commodities Exchange
- Meenaskhi Energy Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Interocean Group of Companies - India
- Global Coal Blending Company Limited - Australia
- Marubeni Corporation - India
- Globalindo Alam Lestari - Indonesia
- Bhushan Steel Limited - India
- SMC Global Power, Philippines
- Eastern Coal Council - USA
- Barasentosa Lestari - Indonesia
- Bharathi Cement Corporation - India
- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
- Malabar Cements Ltd - India
- Central Java Power - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sojitz Corporation - Japan
- VISA Power Limited - India
- Heidelberg Cement - Germany
- Sindya Power Generating Company Private Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Eastern Energy - Thailand
- Ministry of Finance - Indonesia
- Videocon Industries ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Mercator Lines Limited - India
- Aditya Birla Group - India
- Coal and Oil Company - UAE
- Trasteel International SA, Italy
- Therma Luzon, Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Parry Sugars Refinery, India
- Bangladesh Power Developement Board
- TeaM Sual Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Baramulti Group, Indonesia
- Energy Link Ltd, New Zealand
- ICICI Bank Limited - India
- Borneo Indobara - Indonesia
- Kobexindo Tractors - Indoneisa
- Australian Coal Association
- Grasim Industreis Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Renaissance Capital - South Africa
- Mjunction Services Limited - India
- Tamil Nadu electricity Board
- Rio Tinto Coal - Australia
- Sakthi Sugars Limited - India
- Merrill Lynch Commodities Europe
- Essar Steel Hazira Ltd - India
- Altura Mining Limited, Indonesia
- Dalmia Cement Bharat India
- Singapore Mercantile Exchange
- The Treasury - Australian Government
- Wood Mackenzie - Singapore
- Anglo American - United Kingdom
- Antam Resourcindo - Indonesia
- Africa Commodities Group - South Africa
- Mintek Dendrill Indonesia
- Goldman Sachs - Singapore
- Vedanta Resources Plc - India
- Salva Resources Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ambuja Cements Ltd - India
- Uttam Galva Steels Limited - India
- Latin American Coal - Colombia
- Banpu Public Company Limited - Thailand
- MS Steel International - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Mines - Canada
- ASAPP Information Group - India
- South Luzon Thermal Energy Corporation
- Global Green Power PLC Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Coalindo Energy - Indonesia
- Indian Energy Exchange, India
- Binh Thuan Hamico - Vietnam
- Simpson Spence & Young - Indonesia
- Oldendorff Carriers - Singapore
- London Commodity Brokers - England
- IHS Mccloskey Coal Group - USA
- Siam City Cement PLC, Thailand
- Wilmar Investment Holdings
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