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