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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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Monday, 08 August 16
THE TURKISH GOVERNMENT HAS IMPOSED A $15 A TON DUTY ON POWER PLANT COAL IMPORTS - MEDIA
COALspot.com: The Turkish government has imposed a US$15 per ton duty on thermal coal imports for use in its power sector.
According to media ...
Monday, 08 August 16
THE BALTIC EXCHANGE, TRACKING RATES FOR SHIPS CARRYING DRY BULK COMMODITIES SLIDE SLIGHTLY
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities slide slightly as Panamax and Supramax segments ending in ...
Monday, 08 August 16
ARE EXPENSES INCURRED DURING NEGOTIATION OF A PIRATE RANSOM RECOVERABLE IN GENERAL AVERAGE? - CLYDE&CO
KNOWLEDGE TO ELEVATE
Facts
The laden chemical tanker LONGCHAMP was transiting the Gulf of Aden on passage to Vietnam. The ship was subject t ...
Saturday, 06 August 16
DRY BULK SHIPPING CHARTER RATES TO RISE ON UNEXPECTED DEMAND GROWTH - DREWRY
Increasing trade and contracting supply will support a recovery in charter rates on major dry bulk shipping routes, with the prospect of China impo ...
Friday, 05 August 16
WEEKLY U.S. COAL OUTPUT TOTALED AN ESTIMATED 16.1 MMST IN THE WEEK ENDED JULY 30 - EIA
COALspot.com – U.S., the world’s second largest coal producers has produced approximately totalled an estimated 16.1 million short tons ...
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- Global Coal Blending Company Limited - Australia
- Ministry of Mines - Canada
- Thiess Contractors Indonesia
- Indian Oil Corporation Limited
- Riau Bara Harum - Indonesia
- Eastern Energy - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Coal Council - USA
- Thai Mozambique Logistica
- Medco Energi Mining Internasional
- OPG Power Generation Pvt Ltd - India
- Parliament of New Zealand
- Edison Trading Spa - Italy
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Formosa Plastics Group - Taiwan
- Sical Logistics Limited - India
- Holcim Trading Pte Ltd - Singapore
- Sindya Power Generating Company Private Ltd
- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
- Energy Development Corp, Philippines
- PowerSource Philippines DevCo
- The State Trading Corporation of India Ltd
- Antam Resourcindo - Indonesia
- Indo Tambangraya Megah - Indonesia
- Mercuria Energy - Indonesia
- Goldman Sachs - Singapore
- Salva Resources Pvt Ltd - India
- New Zealand Coal & Carbon
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Africa Commodities Group - South Africa
- Billiton Holdings Pty Ltd - Australia
- Economic Council, Georgia
- Latin American Coal - Colombia
- Standard Chartered Bank - UAE
- Altura Mining Limited, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Independent Power Producers Association of India
- Indian Energy Exchange, India
- Wood Mackenzie - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Anglo American - United Kingdom
- Therma Luzon, Inc, Philippines
- CIMB Investment Bank - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Siam City Cement PLC, Thailand
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- Merrill Lynch Commodities Europe
- Renaissance Capital - South Africa
- Binh Thuan Hamico - Vietnam
- CNBM International Corporation - China
- VISA Power Limited - India
- Tamil Nadu electricity Board
- Ambuja Cements Ltd - India
- Electricity Authority, New Zealand
- Videocon Industries ltd - India
- Baramulti Group, Indonesia
- Marubeni Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Cement Manufacturers Association - India
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- Attock Cement Pakistan Limited
- Sree Jayajothi Cements Limited - India
- Ceylon Electricity Board - Sri Lanka
- Karbindo Abesyapradhi - Indoneisa
- Banpu Public Company Limited - Thailand
- Aditya Birla Group - India
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- SMG Consultants - Indonesia
- Malabar Cements Ltd - India
- Vedanta Resources Plc - India
- Minerals Council of Australia
- Rio Tinto Coal - Australia
- GVK Power & Infra Limited - India
- Global Business Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Central Java Power - Indonesia
- Chettinad Cement Corporation Ltd - India
- LBH Netherlands Bv - Netherlands
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- Kobexindo Tractors - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Power Finance Corporation Ltd., India
- Kepco SPC Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Coalindo Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Mercator Lines Limited - India
- Wilmar Investment Holdings
- Price Waterhouse Coopers - Russia
- SN Aboitiz Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Finance - Indonesia
- Vizag Seaport Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- Cigading International Bulk Terminal - Indonesia
- Bhatia International Limited - India
- AsiaOL BioFuels Corp., Philippines
- Kumho Petrochemical, South Korea
- Australian Coal Association
- Maheswari Brothers Coal Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Port Waratah Coal Services - Australia
- Carbofer General Trading SA - India
- Bukit Makmur.PT - Indonesia
- IEA Clean Coal Centre - UK
- TeaM Sual Corporation - Philippines
- Chamber of Mines of South Africa
- ICICI Bank Limited - India
- The Treasury - Australian Government
- Georgia Ports Authority, United States
- Iligan Light & Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Coal and Oil Company - UAE
- Sakthi Sugars Limited - India
- GAC Shipping (India) Pvt Ltd
- San Jose City I Power Corp, Philippines
- Uttam Galva Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Singapore Mercantile Exchange
- London Commodity Brokers - England
- Lanco Infratech Ltd - India
- Indonesian Coal Mining Association
- Manunggal Multi Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Xindia Steels Limited - India
- Oldendorff Carriers - Singapore
- Ministry of Transport, Egypt
- Energy Link Ltd, New Zealand
- Sojitz Corporation - Japan
- Directorate Of Revenue Intelligence - India
- Globalindo Alam Lestari - Indonesia
- Bharathi Cement Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Karaikal Port Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Central Electricity Authority - India
- Jaiprakash Power Ventures ltd
- Sarangani Energy Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- MS Steel International - UAE
- Directorate General of MIneral and Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Meralco Power Generation, Philippines
- Orica Mining Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Agrawal Coal Company - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Commonwealth Bank - Australia
- Bulk Trading Sa - Switzerland
- IHS Mccloskey Coal Group - USA
- International Coal Ventures Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Bukit Baiduri Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Makarim & Taira - Indonesia
- Jindal Steel & Power Ltd - India
- Australian Commodity Traders Exchange
- Timah Investasi Mineral - Indoneisa
- Petron Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Planning Commission, India
- Interocean Group of Companies - India
- Mjunction Services Limited - India
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dalmia Cement Bharat India
- PTC India Limited - India
- Larsen & Toubro Limited - India
- Miang Besar Coal Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Indika Energy - Indonesia
- SMC Global Power, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Barasentosa Lestari - Indonesia
- Indogreen Group - Indonesia
- White Energy Company Limited
- The University of Queensland
- Bangladesh Power Developement Board
- GMR Energy Limited - India
- Mintek Dendrill Indonesia
- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bhushan Steel Limited - India
- Gujarat Sidhee Cement - India
- Asmin Koalindo Tuhup - Indonesia
- India Bulls Power Limited - India
- Grasim Industreis Ltd - India
- Metalloyd Limited - United Kingdom
- Posco Energy - South Korea
- Straits Asia Resources Limited - Singapore
- Deloitte Consulting - India
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- Essar Steel Hazira Ltd - India
- Aboitiz Power Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
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