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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, 23 August 18
SUPRAMAX: SOME FRESH COAL CARGOES APPEARED IN SE ASIA, GIVING A BIT PRESSURE ON RATES FOR END AUGUST SHIPMENTS - FEARNLEYS
Capesize
Slightly softer but generally very healthy for the big ships, with limited supply of early tonnage and positive Brazilian ore export v ...
Wednesday, 22 August 18
KOMIPO INVITES BIDS FOR 480K TONS OF BITUMINOUS COAL FOR BORYEONG POWER PLANT & SHIN BORYEONG POWER PLANTS
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a tender for 480,000 mt of min. 5700 NAR coal of Australian origi ...
Wednesday, 22 August 18
SHIPPING MARKET INSIGHT - GEORGE PANAGOPOULOS
During the most quite week of the summer period we witnessed a trade war between United States and Turkey. A battle, which started with the arrest ...
Monday, 20 August 18
SUPRAMAX: OVERALL IT WAS A POSITIVE WEEK FOR THE BSI INDEX WITH GAINS MADE - THE BALTIC BRIEFING
Capesize
A week of largely unfulfilled expectations with holidays again curbing activity. Rates remained essentially healthy, but despite bad wea ...
Friday, 17 August 18
DO ARBITRATION AGREEMENTS IN BILLS OF LADING BIND THEIR HOLDERS? - WFW
KNOWLEDGE TO ELEVATE
Bills of lading are a crucial part of the security package traditionally sought by trade finance providers.
...
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- Kaltim Prima Coal - Indonesia
- Thiess Contractors Indonesia
- Binh Thuan Hamico - Vietnam
- Jaiprakash Power Ventures ltd
- Meenaskhi Energy Private Limited - India
- Standard Chartered Bank - UAE
- CNBM International Corporation - China
- Rashtriya Ispat Nigam Limited - India
- Intertek Mineral Services - Indonesia
- London Commodity Brokers - England
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- MS Steel International - UAE
- CIMB Investment Bank - Malaysia
- Posco Energy - South Korea
- Power Finance Corporation Ltd., India
- Coalindo Energy - Indonesia
- Sojitz Corporation - Japan
- The State Trading Corporation of India Ltd
- Edison Trading Spa - Italy
- ASAPP Information Group - India
- Kalimantan Lumbung Energi - Indonesia
- Eastern Energy - Thailand
- Tata Chemicals Ltd - India
- Maheswari Brothers Coal Limited - India
- Ceylon Electricity Board - Sri Lanka
- Leighton Contractors Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Krishnapatnam Port Company Ltd. - India
- GN Power Mariveles Coal Plant, Philippines
- IEA Clean Coal Centre - UK
- Bhoruka Overseas - Indonesia
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- Port Waratah Coal Services - Australia
- Indogreen Group - Indonesia
- GAC Shipping (India) Pvt Ltd
- Coal and Oil Company - UAE
- Indian Energy Exchange, India
- Grasim Industreis Ltd - India
- Africa Commodities Group - South Africa
- Price Waterhouse Coopers - Russia
- Asmin Koalindo Tuhup - Indonesia
- Salva Resources Pvt Ltd - India
- Agrawal Coal Company - India
- Meralco Power Generation, Philippines
- San Jose City I Power Corp, Philippines
- Attock Cement Pakistan Limited
- Manunggal Multi Energi - Indonesia
- Ministry of Mines - Canada
- PNOC Exploration Corporation - Philippines
- Bangladesh Power Developement Board
- Metalloyd Limited - United Kingdom
- Videocon Industries ltd - India
- VISA Power Limited - India
- Bharathi Cement Corporation - India
- Straits Asia Resources Limited - Singapore
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
- Aditya Birla Group - India
- Ministry of Finance - Indonesia
- Sree Jayajothi Cements Limited - India
- SN Aboitiz Power Inc, Philippines
- Madhucon Powers Ltd - India
- Indo Tambangraya Megah - Indonesia
- Borneo Indobara - Indonesia
- Globalindo Alam Lestari - Indonesia
- The University of Queensland
- The Treasury - Australian Government
- Global Coal Blending Company Limited - Australia
- Essar Steel Hazira Ltd - India
- Tamil Nadu electricity Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Independent Power Producers Association of India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coastal Gujarat Power Limited - India
- Savvy Resources Ltd - HongKong
- Thai Mozambique Logistica
- Merrill Lynch Commodities Europe
- Cement Manufacturers Association - India
- Marubeni Corporation - India
- Wilmar Investment Holdings
- European Bulk Services B.V. - Netherlands
- Mercator Lines Limited - India
- Siam City Cement - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Samtan Co., Ltd - South Korea
- Medco Energi Mining Internasional
- Neyveli Lignite Corporation Ltd, - India
- Minerals Council of Australia
- Altura Mining Limited, Indonesia
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- Vizag Seaport Private Limited - India
- Mintek Dendrill Indonesia
- Ambuja Cements Ltd - India
- Malabar Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Bayan Resources Tbk. - Indonesia
- Bhushan Steel Limited - India
- Riau Bara Harum - Indonesia
- Indian Oil Corporation Limited
- Renaissance Capital - South Africa
- Anglo American - United Kingdom
- Petron Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- Deloitte Consulting - India
- PTC India Limited - India
- Interocean Group of Companies - India
- Aboitiz Power Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cigading International Bulk Terminal - Indonesia
- Indika Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Central Electricity Authority - India
- Australian Coal Association
- Indonesian Coal Mining Association
- Iligan Light & Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Bukit Baiduri Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Economic Council, Georgia
- Kobexindo Tractors - Indoneisa
- GMR Energy Limited - India
- Heidelberg Cement - Germany
- Baramulti Group, Indonesia
- Commonwealth Bank - Australia
- Sical Logistics Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Vedanta Resources Plc - India
- Bahari Cakrawala Sebuku - Indonesia
- Uttam Galva Steels Limited - India
- Antam Resourcindo - Indonesia
- Global Green Power PLC Corporation, Philippines
- Global Business Power Corporation, Philippines
- Planning Commission, India
- Dalmia Cement Bharat India
- Vijayanagar Sugar Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- New Zealand Coal & Carbon
- Bulk Trading Sa - Switzerland
- Singapore Mercantile Exchange
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Carbofer General Trading SA - India
- Electricity Generating Authority of Thailand
- Mercuria Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Kapuas Tunggal Persada - Indonesia
- OPG Power Generation Pvt Ltd - India
- Romanian Commodities Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bhatia International Limited - India
- Alfred C Toepfer International GmbH - Germany
- SMG Consultants - Indonesia
- Eastern Coal Council - USA
- TeaM Sual Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Jindal Steel & Power Ltd - India
- Timah Investasi Mineral - Indoneisa
- Bukit Makmur.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Lanco Infratech Ltd - India
- GVK Power & Infra Limited - India
- PowerSource Philippines DevCo
- Billiton Holdings Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Energy Link Ltd, New Zealand
- Karaikal Port Pvt Ltd - India
- Central Java Power - Indonesia
- Mjunction Services Limited - India
- IHS Mccloskey Coal Group - USA
- Kartika Selabumi Mining - Indonesia
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- Siam City Cement PLC, Thailand
- Kumho Petrochemical, South Korea
- South Luzon Thermal Energy Corporation
- Karbindo Abesyapradhi - Indoneisa
- Banpu Public Company Limited - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Transport, Egypt
- Chamber of Mines of South Africa
- Semirara Mining and Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parry Sugars Refinery, India
- Trasteel International SA, Italy
- Larsen & Toubro Limited - India
- Orica Mining Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Directorate Of Revenue Intelligence - India
- Rio Tinto Coal - Australia
- Simpson Spence & Young - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Xindia Steels Limited - India
- Makarim & Taira - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Therma Luzon, Inc, Philippines
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- Gujarat Sidhee Cement - India
- Parliament of New Zealand
- Pendopo Energi Batubara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TNB Fuel Sdn Bhd - Malaysia
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