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