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