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