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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, 12 September 18
MARINE BUNKERS: THE END OF THE WORLD AS WE KNOW IT - IBIA
KNOWLEDGE TO ELEVATE
The world of bunkers is heading for rapid and fundamental changes and not just because of the 0.50% sulphur cap in 2020. ...
Wednesday, 12 September 18
SHIPPING MARKET INSIGHT - THEODORE NTALAKOS
A recovery in the shipping market since last year has buoyed optimism amongst the people in the industry. Yet if you are to ask most ship-owners if ...
Monday, 10 September 18
HANDYSIZE: PERIOD ACTIVITY REMAINED LIMITED WITH A 37,000DWT REPORTEDLY FIXED FOR FOUR TO SIX MONTHS AT $10,500, OPEN IN MALAYSIA IN MID-SEPTEMBER - BALTIC BRIEFING
Capesize
Rates came under pressure for the big ships last week, despite paper values holding at reasonable levels as these trades continued to ...
Thursday, 06 September 18
INDONESIAN COAL PRICE REFERENCE FALLS FOR FIRST TIME IN 3 MONTHS
COALspot.com: The benchmark price of Indonesian thermal coal falls for first time in three months.
According to the latest min ...
Thursday, 06 September 18
SUPRAMAX: SE ASIA-INDO ROUNDS WITH COAL HAVE BEEN CONCLUDED IN THE $13000S RANGE - FEARNLEYS
Capesize
The big ships experiencing a bump in the road towards what is commonly expected to be by far the best period of this year. Average dai ...
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- Wood Mackenzie - Singapore
- Salva Resources Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Neyveli Lignite Corporation Ltd, - India
- Kohat Cement Company Ltd. - Pakistan
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Therma Luzon, Inc, Philippines
- Wilmar Investment Holdings
- San Jose City I Power Corp, Philippines
- Posco Energy - South Korea
- London Commodity Brokers - England
- Bulk Trading Sa - Switzerland
- Vizag Seaport Private Limited - India
- Carbofer General Trading SA - India
- Savvy Resources Ltd - HongKong
- SMG Consultants - Indonesia
- Banpu Public Company Limited - Thailand
- Edison Trading Spa - Italy
- Siam City Cement - Thailand
- Kapuas Tunggal Persada - Indonesia
- Mercuria Energy - Indonesia
- Mjunction Services Limited - India
- Gujarat Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Ministry of Mines - Canada
- Bayan Resources Tbk. - Indonesia
- Bhatia International Limited - India
- Bhoruka Overseas - Indonesia
- SMC Global Power, Philippines
- SN Aboitiz Power Inc, Philippines
- ICICI Bank Limited - India
- Karaikal Port Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Planning Commission, India
- Globalindo Alam Lestari - Indonesia
- Minerals Council of Australia
- Binh Thuan Hamico - Vietnam
- VISA Power Limited - India
- CNBM International Corporation - China
- Sree Jayajothi Cements Limited - India
- South Luzon Thermal Energy Corporation
- Anglo American - United Kingdom
- Australian Commodity Traders Exchange
- Star Paper Mills Limited - India
- Thiess Contractors Indonesia
- Power Finance Corporation Ltd., India
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- Malabar Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Economic Council, Georgia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- International Coal Ventures Pvt Ltd - India
- Orica Mining Services - Indonesia
- Madhucon Powers Ltd - India
- Georgia Ports Authority, United States
- White Energy Company Limited
- Billiton Holdings Pty Ltd - Australia
- Singapore Mercantile Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Meralco Power Generation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Bhushan Steel Limited - India
- Antam Resourcindo - Indonesia
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- Energy Development Corp, Philippines
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Holcim Trading Pte Ltd - Singapore
- Krishnapatnam Port Company Ltd. - India
- Metalloyd Limited - United Kingdom
- Cement Manufacturers Association - India
- Agrawal Coal Company - India
- Chamber of Mines of South Africa
- Romanian Commodities Exchange
- Altura Mining Limited, Indonesia
- PTC India Limited - India
- MS Steel International - UAE
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CIMB Investment Bank - Malaysia
- Petron Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Renaissance Capital - South Africa
- Port Waratah Coal Services - Australia
- Bukit Baiduri Energy - Indonesia
- Ministry of Transport, Egypt
- AsiaOL BioFuels Corp., Philippines
- Sindya Power Generating Company Private Ltd
- Larsen & Toubro Limited - India
- Kumho Petrochemical, South Korea
- Lanco Infratech Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- The State Trading Corporation of India Ltd
- GAC Shipping (India) Pvt Ltd
- Sakthi Sugars Limited - India
- The Treasury - Australian Government
- Baramulti Group, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Petrochimia International Co. Ltd.- Taiwan
- Global Coal Blending Company Limited - Australia
- Latin American Coal - Colombia
- Goldman Sachs - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- PowerSource Philippines DevCo
- Energy Link Ltd, New Zealand
- Eastern Energy - Thailand
- New Zealand Coal & Carbon
- Eastern Coal Council - USA
- Independent Power Producers Association of India
- Global Green Power PLC Corporation, Philippines
- Makarim & Taira - Indonesia
- Parry Sugars Refinery, India
- Riau Bara Harum - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Oldendorff Carriers - Singapore
- Xindia Steels Limited - India
- Gujarat Sidhee Cement - India
- Coalindo Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Global Business Power Corporation, Philippines
- Indian Oil Corporation Limited
- Grasim Industreis Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Deloitte Consulting - India
- Thai Mozambique Logistica
- Asmin Koalindo Tuhup - Indonesia
- Central Java Power - Indonesia
- Merrill Lynch Commodities Europe
- GMR Energy Limited - India
- Rio Tinto Coal - Australia
- Aboitiz Power Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coal and Oil Company - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Commonwealth Bank - Australia
- OPG Power Generation Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Electricity Generating Authority of Thailand
- Sinarmas Energy and Mining - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aditya Birla Group - India
- Directorate Of Revenue Intelligence - India
- India Bulls Power Limited - India
- GVK Power & Infra Limited - India
- Indonesian Coal Mining Association
- Electricity Authority, New Zealand
- IHS Mccloskey Coal Group - USA
- Bangladesh Power Developement Board
- Kaltim Prima Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Tata Chemicals Ltd - India
- Attock Cement Pakistan Limited
- Ind-Barath Power Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Indika Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Interocean Group of Companies - India
- Ambuja Cements Ltd - India
- Sical Logistics Limited - India
- LBH Netherlands Bv - Netherlands
- Miang Besar Coal Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Kartika Selabumi Mining - Indonesia
- Bharathi Cement Corporation - India
- Essar Steel Hazira Ltd - India
- Uttam Galva Steels Limited - India
- Siam City Cement PLC, Thailand
- Barasentosa Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Trasteel International SA, Italy
- Jindal Steel & Power Ltd - India
- Marubeni Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Toyota Tsusho Corporation, Japan
- Kobexindo Tractors - Indoneisa
- Indogreen Group - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Medco Energi Mining Internasional
- Tamil Nadu electricity Board
- Manunggal Multi Energi - Indonesia
- Central Electricity Authority - India
- Videocon Industries ltd - India
- Australian Coal Association
- The University of Queensland
- McConnell Dowell - Australia
- Ministry of Finance - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cigading International Bulk Terminal - Indonesia
- Mercator Lines Limited - India
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