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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, 30 December 18
MAJOR LNG BUYERS' UNCONTRACTED DEMAND TO QUADRUPLE BY 2030 - WOOD MACKENZIE
Wood Mackenzie’s latest research reveals that uncontracted demand by the world’s seven largest LNG buyers could quadruple to 80 million ...
Saturday, 29 December 18
DELIVERY OF CARGO WITHOUT PRODUCTION OF THE ORIGINAL BILL OF LADING - TT CLUB
KNOWLEDGE TO ELEVATE
As the bill of lading is a document of title, a person presenting it to the carrier or its agent is ostensibly entitled t ...
Friday, 28 December 18
BIMCO 2020 SULPHUR CLAUSES: "A FAIR ALLOCATION OF RESPONSIBILITIES AND LIABILITIES'? - INCE & CO.
To assist owners and charterers to address the legal issues arising under any time charterparties, which will span the 1 January 2020 implementatio ...
Thursday, 27 December 18
DRY BULKERS SPOT FREIGHT MARKET W/E 21 DEC - ALLIED SHIPBROKING
Capesize
A negative week for the Capesize sector, as activity remained at low levels, especially in the Pacific, with rumors regarding agreed r ...
Thursday, 27 December 18
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As we move closer to the end of the year and we look forward into New Year, we are still finding ourselves looking deep into a market outlook full ...
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- Global Green Power PLC Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Energy Development Corp, Philippines
- CIMB Investment Bank - Malaysia
- International Coal Ventures Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Timah Investasi Mineral - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Chamber of Mines of South Africa
- Leighton Contractors Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Electricity Generating Authority of Thailand
- CNBM International Corporation - China
- Madhucon Powers Ltd - India
- TeaM Sual Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- SMC Global Power, Philippines
- Orica Mining Services - Indonesia
- Port Waratah Coal Services - Australia
- Iligan Light & Power Inc, Philippines
- Oldendorff Carriers - Singapore
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Uttam Galva Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Deloitte Consulting - India
- Electricity Authority, New Zealand
- Africa Commodities Group - South Africa
- Tamil Nadu electricity Board
- Jindal Steel & Power Ltd - India
- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- McConnell Dowell - Australia
- Sakthi Sugars Limited - India
- Bayan Resources Tbk. - Indonesia
- Videocon Industries ltd - India
- Energy Link Ltd, New Zealand
- Australian Coal Association
- Holcim Trading Pte Ltd - Singapore
- Xindia Steels Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Cement Manufacturers Association - India
- Coalindo Energy - Indonesia
- Ministry of Finance - Indonesia
- Vizag Seaport Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Anglo American - United Kingdom
- Manunggal Multi Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement PLC, Thailand
- Toyota Tsusho Corporation, Japan
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Eastern Energy - Thailand
- Standard Chartered Bank - UAE
- Heidelberg Cement - Germany
- Karaikal Port Pvt Ltd - India
- Larsen & Toubro Limited - India
- SMG Consultants - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Ind-Barath Power Infra Limited - India
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Orica Australia Pty. Ltd.
- Directorate Of Revenue Intelligence - India
- Carbofer General Trading SA - India
- Meralco Power Generation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- New Zealand Coal & Carbon
- Grasim Industreis Ltd - India
- AsiaOL BioFuels Corp., Philippines
- VISA Power Limited - India
- PNOC Exploration Corporation - Philippines
- GVK Power & Infra Limited - India
- The Treasury - Australian Government
- MS Steel International - UAE
- ASAPP Information Group - India
- Edison Trading Spa - Italy
- Agrawal Coal Company - India
- Altura Mining Limited, Indonesia
- Banpu Public Company Limited - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Parliament of New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Chettinad Cement Corporation Ltd - India
- Ambuja Cements Ltd - India
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- Indian Oil Corporation Limited
- Kepco SPC Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Kohat Cement Company Ltd. - Pakistan
- Price Waterhouse Coopers - Russia
- Maheswari Brothers Coal Limited - India
- Indian Energy Exchange, India
- Cigading International Bulk Terminal - Indonesia
- Indogreen Group - Indonesia
- Central Electricity Authority - India
- Binh Thuan Hamico - Vietnam
- Mercuria Energy - Indonesia
- Mercator Lines Limited - India
- GMR Energy Limited - India
- Commonwealth Bank - Australia
- Planning Commission, India
- Siam City Cement - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Latin American Coal - Colombia
- Vedanta Resources Plc - India
- Globalindo Alam Lestari - Indonesia
- Bhatia International Limited - India
- Intertek Mineral Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Savvy Resources Ltd - HongKong
- White Energy Company Limited
- Simpson Spence & Young - Indonesia
- Antam Resourcindo - Indonesia
- Straits Asia Resources Limited - Singapore
- Bangladesh Power Developement Board
- Lanco Infratech Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Borneo Indobara - Indonesia
- Sree Jayajothi Cements Limited - India
- Romanian Commodities Exchange
- Riau Bara Harum - Indonesia
- Coastal Gujarat Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Georgia Ports Authority, United States
- Samtan Co., Ltd - South Korea
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- Metalloyd Limited - United Kingdom
- Bukit Makmur.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Eastern Coal Council - USA
- Semirara Mining and Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Marubeni Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Kobexindo Tractors - Indoneisa
- Wilmar Investment Holdings
- India Bulls Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Jaiprakash Power Ventures ltd
- Global Coal Blending Company Limited - Australia
- Indika Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dalmia Cement Bharat India
- Renaissance Capital - South Africa
- Goldman Sachs - Singapore
- PowerSource Philippines DevCo
- Karbindo Abesyapradhi - Indoneisa
- Formosa Plastics Group - Taiwan
- Aditya Birla Group - India
- Global Business Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- The University of Queensland
- ICICI Bank Limited - India
- Thai Mozambique Logistica
- Parry Sugars Refinery, India
- Sical Logistics Limited - India
- Ministry of Transport, Egypt
- Attock Cement Pakistan Limited
- Mintek Dendrill Indonesia
- Semirara Mining Corp, Philippines
- Mjunction Services Limited - India
- Interocean Group of Companies - India
- Bharathi Cement Corporation - India
- Alfred C Toepfer International GmbH - Germany
- Kaltim Prima Coal - Indonesia
- Sojitz Corporation - Japan
- Meenaskhi Energy Private Limited - India
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- Minerals Council of Australia
- Independent Power Producers Association of India
- Kalimantan Lumbung Energi - Indonesia
- Indonesian Coal Mining Association
- Gujarat Sidhee Cement - India
- Power Finance Corporation Ltd., India
- Star Paper Mills Limited - India
- SN Aboitiz Power Inc, Philippines
- PTC India Limited - India
- Makarim & Taira - Indonesia
- Therma Luzon, Inc, Philippines
- South Luzon Thermal Energy Corporation
- Merrill Lynch Commodities Europe
- Salva Resources Pvt Ltd - India
- Bhushan Steel Limited - India
- London Commodity Brokers - England
- OPG Power Generation Pvt Ltd - India
- Wood Mackenzie - Singapore
- Thiess Contractors Indonesia
- Posco Energy - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Economic Council, Georgia
- Essar Steel Hazira Ltd - India
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
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