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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, 06 December 18
CHINA REVISES MANAGEMENT RULES ON ESTABLISHMENT OF FULLY FOREIGN-OWNED SHIPPING BUSINESSES - XINHUA
Foreign shipping companies will find it easier to establish wholly-owned subsidiaries in China thanks to a revised regulation due to take effect on ...
Wednesday, 05 December 18
WORLD COAL PRICES FALL, WITH INDONESIA BENCHMARK FOR DECEMBER, ENDING AT LOWEST SINCE JUNE 2018
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Wednesday, 05 December 18
SHIPPING MARKET INSIGHT - GIANNIS ANDRITSOPOULOS
Is the rise in crude carrier rates driven only by seasonality, or is the recent positive reversal signaling the end of challenging days for the mar ...
Monday, 03 December 18
WCA'S ENGAGEMENT AT COP24 IN KATOWICE - WCA
The 24th Conference of the Parties (COP) to the UN Framework Convention on Climate Change (UNFCCC) will take place from the 2-14 December 2018 in K ...
Monday, 03 December 18
SUPRAMAX: FIXED DELIVERY KALIMANTAN TO WEST COAST INDIA, AT $11000 - THE BALTIC BRIEFING
Capesize
A roller-coaster week for the big ships with hopes soaring at the start for a mini last quarter revival, only to be dashed as the week ...
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- Malabar Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- SMG Consultants - Indonesia
- Mintek Dendrill Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Metalloyd Limited - United Kingdom
- Banpu Public Company Limited - Thailand
- Planning Commission, India
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Finance - Indonesia
- Bukit Baiduri Energy - Indonesia
- Posco Energy - South Korea
- Makarim & Taira - Indonesia
- Renaissance Capital - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Meralco Power Generation, Philippines
- Wilmar Investment Holdings
- Indian Oil Corporation Limited
- Sarangani Energy Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Bhushan Steel Limited - India
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Sindya Power Generating Company Private Ltd
- Binh Thuan Hamico - Vietnam
- Kideco Jaya Agung - Indonesia
- Gujarat Sidhee Cement - India
- Bulk Trading Sa - Switzerland
- Ceylon Electricity Board - Sri Lanka
- CIMB Investment Bank - Malaysia
- Australian Commodity Traders Exchange
- Mercator Lines Limited - India
- Thai Mozambique Logistica
- Straits Asia Resources Limited - Singapore
- Tamil Nadu electricity Board
- PTC India Limited - India
- Anglo American - United Kingdom
- Jindal Steel & Power Ltd - India
- Coalindo Energy - Indonesia
- Central Java Power - Indonesia
- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Vizag Seaport Private Limited - India
- Standard Chartered Bank - UAE
- Ambuja Cements Ltd - India
- Tata Chemicals Ltd - India
- Kaltim Prima Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Energy Development Corp, Philippines
- Electricity Authority, New Zealand
- Oldendorff Carriers - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- The University of Queensland
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- Dalmia Cement Bharat India
- Ministry of Mines - Canada
- Medco Energi Mining Internasional
- Merrill Lynch Commodities Europe
- Bayan Resources Tbk. - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Minerals Council of Australia
- LBH Netherlands Bv - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Vijayanagar Sugar Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- International Coal Ventures Pvt Ltd - India
- McConnell Dowell - Australia
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- Mjunction Services Limited - India
- South Luzon Thermal Energy Corporation
- Holcim Trading Pte Ltd - Singapore
- IEA Clean Coal Centre - UK
- SMC Global Power, Philippines
- Gujarat Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Economic Council, Georgia
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Maheswari Brothers Coal Limited - India
- Indika Energy - Indonesia
- Indonesian Coal Mining Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karbindo Abesyapradhi - Indoneisa
- Coastal Gujarat Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Singapore Mercantile Exchange
- Deloitte Consulting - India
- Global Business Power Corporation, Philippines
- Marubeni Corporation - India
- Karaikal Port Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- London Commodity Brokers - England
- Baramulti Group, Indonesia
- Intertek Mineral Services - Indonesia
- Uttam Galva Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Commonwealth Bank - Australia
- ASAPP Information Group - India
- Billiton Holdings Pty Ltd - Australia
- MS Steel International - UAE
- San Jose City I Power Corp, Philippines
- Australian Coal Association
- Madhucon Powers Ltd - India
- White Energy Company Limited
- Kalimantan Lumbung Energi - Indonesia
- Star Paper Mills Limited - India
- Chamber of Mines of South Africa
- Global Green Power PLC Corporation, Philippines
- Videocon Industries ltd - India
- IHS Mccloskey Coal Group - USA
- Indo Tambangraya Megah - Indonesia
- Sree Jayajothi Cements Limited - India
- Carbofer General Trading SA - India
- Globalindo Alam Lestari - Indonesia
- Orica Australia Pty. Ltd.
- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- Wood Mackenzie - Singapore
- Kepco SPC Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Indogreen Group - Indonesia
- Price Waterhouse Coopers - Russia
- Sinarmas Energy and Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Bangladesh Power Developement Board
- Kobexindo Tractors - Indoneisa
- Aditya Birla Group - India
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- New Zealand Coal & Carbon
- Coal and Oil Company - UAE
- Lanco Infratech Ltd - India
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Bhatia International Limited - India
- Ind-Barath Power Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Cigading International Bulk Terminal - Indonesia
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- Interocean Group of Companies - India
- Pendopo Energi Batubara - Indonesia
- India Bulls Power Limited - India
- Antam Resourcindo - Indonesia
- Aboitiz Power Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Power Finance Corporation Ltd., India
- Miang Besar Coal Terminal - Indonesia
- Parry Sugars Refinery, India
- Global Coal Blending Company Limited - Australia
- Sical Logistics Limited - India
- Directorate Of Revenue Intelligence - India
- Kartika Selabumi Mining - Indonesia
- ICICI Bank Limited - India
- Central Electricity Authority - India
- Meenaskhi Energy Private Limited - India
- VISA Power Limited - India
- Electricity Generating Authority of Thailand
- GVK Power & Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Agrawal Coal Company - India
- Gujarat Mineral Development Corp Ltd - India
- Bukit Makmur.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Bhoruka Overseas - Indonesia
- Savvy Resources Ltd - HongKong
- Formosa Plastics Group - Taiwan
- Attock Cement Pakistan Limited
- Romanian Commodities Exchange
- Independent Power Producers Association of India
- Goldman Sachs - Singapore
- Kumho Petrochemical, South Korea
- European Bulk Services B.V. - Netherlands
- Edison Trading Spa - Italy
- Parliament of New Zealand
- Eastern Coal Council - USA
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- Xindia Steels Limited - India
- Ministry of Transport, Egypt
- Neyveli Lignite Corporation Ltd, - India
- PowerSource Philippines DevCo
- Iligan Light & Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Cement Manufacturers Association - India
- Directorate General of MIneral and Coal - Indonesia
- Thiess Contractors Indonesia
- Petron Corporation, Philippines
- CNBM International Corporation - China
- TeaM Sual Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Essar Steel Hazira Ltd - India
- Salva Resources Pvt Ltd - India
- Africa Commodities Group - South Africa
- Mercuria Energy - Indonesia
- Toyota Tsusho Corporation, Japan
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