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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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Tuesday, 26 June 18
"ALWAYS ACCESSIBLE": ARRIVAL, DEPARTURE OR BOTH? - INCE & CO
KNOWLEDGE TO ELEVATE
An “always accessible” berth warranty is often used by an owner to transfer the risk of delays in berthing to ...
Tuesday, 26 June 18
A SHARP RISE IN THE PRICE OF CRUDE OIL WAS TO BE SEEN ON FRIDAY, ITS BIGGEST DAILY GAIN IN TWO YEARS - GEORGE LAZARIDIS
A sharp rise in the price of crude oil was to be seen on Friday, its biggest daily gain in two years, as OPEC reached a deal to raise output. Despi ...
Monday, 25 June 18
AUSTRALIA'S NEWCASTLE PORT SHIPPED 12.179 MT OF COAL IN MAY; DOWN 14.77% M/M
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port has shipped $AU1,453.6 Mi ...
Monday, 25 June 18
COAL IN THE CROSSFIRE: CHINESE TRADERS WARY OF BEING BURNT BY TRADE WAR - REUTERS
At least three U.S. coal shipments on their way to China may end up casualties of the escalating trade dispute after Beijing said it would impose s ...
Saturday, 23 June 18
COAL GROUP TARGETS 9 PER CENT REVENUE SPIKE - VIET NAM NEWS
Viet Nam News reported, the Viet Nam National Coal and Mineral Industries Group (Vinacomin or TKV) is targeting VNĐ116.9 trillion (US$5.1 billion) ...
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- Latin American Coal - Colombia
- Gujarat Sidhee Cement - India
- Uttam Galva Steels Limited - India
- CIMB Investment Bank - Malaysia
- Petron Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Barasentosa Lestari - Indonesia
- SMG Consultants - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- New Zealand Coal & Carbon
- Riau Bara Harum - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- PTC India Limited - India
- Commonwealth Bank - Australia
- IEA Clean Coal Centre - UK
- Coastal Gujarat Power Limited - India
- Mercator Lines Limited - India
- Kumho Petrochemical, South Korea
- SMC Global Power, Philippines
- Iligan Light & Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement - Thailand
- Anglo American - United Kingdom
- Sojitz Corporation - Japan
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- The State Trading Corporation of India Ltd
- Vizag Seaport Private Limited - India
- GVK Power & Infra Limited - India
- Binh Thuan Hamico - Vietnam
- ASAPP Information Group - India
- Interocean Group of Companies - India
- Bangladesh Power Developement Board
- Kalimantan Lumbung Energi - Indonesia
- Deloitte Consulting - India
- Miang Besar Coal Terminal - Indonesia
- Grasim Industreis Ltd - India
- McConnell Dowell - Australia
- Australian Commodity Traders Exchange
- Kaltim Prima Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Generating Authority of Thailand
- Ceylon Electricity Board - Sri Lanka
- Karbindo Abesyapradhi - Indoneisa
- LBH Netherlands Bv - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- Formosa Plastics Group - Taiwan
- White Energy Company Limited
- Bukit Makmur.PT - Indonesia
- Australian Coal Association
- Bayan Resources Tbk. - Indonesia
- San Jose City I Power Corp, Philippines
- Standard Chartered Bank - UAE
- Maharashtra Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Power Finance Corporation Ltd., India
- Carbofer General Trading SA - India
- SN Aboitiz Power Inc, Philippines
- Eastern Coal Council - USA
- Larsen & Toubro Limited - India
- Cigading International Bulk Terminal - Indonesia
- Indian Energy Exchange, India
- Global Coal Blending Company Limited - Australia
- IHS Mccloskey Coal Group - USA
- Videocon Industries ltd - India
- Kepco SPC Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Baramulti Group, Indonesia
- PNOC Exploration Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Goldman Sachs - Singapore
- Mercuria Energy - Indonesia
- Aditya Birla Group - India
- Aboitiz Power Corporation - Philippines
- Energy Development Corp, Philippines
- Rio Tinto Coal - Australia
- Chamber of Mines of South Africa
- Orica Mining Services - Indonesia
- Intertek Mineral Services - Indonesia
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Lanco Infratech Ltd - India
- Marubeni Corporation - India
- Makarim & Taira - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Mintek Dendrill Indonesia
- Agrawal Coal Company - India
- Thai Mozambique Logistica
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Central Electricity Authority - India
- MS Steel International - UAE
- OPG Power Generation Pvt Ltd - India
- Posco Energy - South Korea
- Dalmia Cement Bharat India
- Independent Power Producers Association of India
- Indian Oil Corporation Limited
- Kobexindo Tractors - Indoneisa
- Antam Resourcindo - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Attock Cement Pakistan Limited
- Merrill Lynch Commodities Europe
- PetroVietnam Power Coal Import and Supply Company
- Pendopo Energi Batubara - Indonesia
- Meralco Power Generation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Samtan Co., Ltd - South Korea
- Karaikal Port Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Bhatia International Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coal and Oil Company - UAE
- Oldendorff Carriers - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Madhucon Powers Ltd - India
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- Sarangani Energy Corporation, Philippines
- Planning Commission, India
- Borneo Indobara - Indonesia
- Parliament of New Zealand
- Edison Trading Spa - Italy
- India Bulls Power Limited - India
- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- Heidelberg Cement - Germany
- GN Power Mariveles Coal Plant, Philippines
- Port Waratah Coal Services - Australia
- TeaM Sual Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Bukit Baiduri Energy - Indonesia
- Wood Mackenzie - Singapore
- Thiess Contractors Indonesia
- Siam City Cement PLC, Thailand
- Salva Resources Pvt Ltd - India
- Sakthi Sugars Limited - India
- The University of Queensland
- Bulk Trading Sa - Switzerland
- Energy Link Ltd, New Zealand
- Renaissance Capital - South Africa
- Tamil Nadu electricity Board
- Savvy Resources Ltd - HongKong
- Xindia Steels Limited - India
- Eastern Energy - Thailand
- Banpu Public Company Limited - Thailand
- Parry Sugars Refinery, India
- Ambuja Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Jaiprakash Power Ventures ltd
- Sree Jayajothi Cements Limited - India
- PowerSource Philippines DevCo
- Malabar Cements Ltd - India
- Minerals Council of Australia
- Manunggal Multi Energi - Indonesia
- CNBM International Corporation - China
- Bhushan Steel Limited - India
- London Commodity Brokers - England
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ICICI Bank Limited - India
- Altura Mining Limited, Indonesia
- Chettinad Cement Corporation Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Wilmar Investment Holdings
- Straits Asia Resources Limited - Singapore
- Timah Investasi Mineral - Indoneisa
- Coalindo Energy - Indonesia
- Singapore Mercantile Exchange
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- VISA Power Limited - India
- Jindal Steel & Power Ltd - India
- Indo Tambangraya Megah - Indonesia
- The Treasury - Australian Government
- Ministry of Transport, Egypt
- Bhoruka Overseas - Indonesia
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- Ministry of Mines - Canada
- Star Paper Mills Limited - India
- Central Java Power - Indonesia
- Therma Luzon, Inc, Philippines
- Cement Manufacturers Association - India
- Kideco Jaya Agung - Indonesia
- Ministry of Finance - Indonesia
- Global Green Power PLC Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Trasteel International SA, Italy
- GMR Energy Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Meenaskhi Energy Private Limited - India
- Tata Chemicals Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sindya Power Generating Company Private Ltd
- Economic Council, Georgia
- Indonesian Coal Mining Association
- Price Waterhouse Coopers - Russia
- Georgia Ports Authority, United States
- TNB Fuel Sdn Bhd - Malaysia
- Mjunction Services Limited - India
- Medco Energi Mining Internasional
- Gujarat Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- International Coal Ventures Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Electricity Authority, New Zealand
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