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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, 01 March 16
CAN BULKCARRIER SUPPLY CUTS RESTORE SOME BALANCE? - CLARKSONS
The easing in bulkcarrier deliveries and the accelerated pace of demolition in recent years has seen bulkcarrier fleet growth slow from a rapid 17% ...
Monday, 29 February 16
BALTIC INDEX INCHES UP THIS PAST WEEK AS SMALLER VESSELS LEND SUPPORT
COALspot.com: The freight markets rose slightly this past week.
The Baltic Dry Index (BDI) of dry-bulk shipping freights, a measure of global ...
Monday, 29 February 16
LOSS OF EARNINGS IN THE WAKE OF A COLLISION - GARD
KNOWLEDGE TO ELEVATE
A shipowner’s loss of earnings can form a significant part of a collision claim. Awareness of the ways of calculati ...
Friday, 26 February 16
U.S WEEKLY COAL PRODUCTION UP SLIGHTLY
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 13.4 million shor ...
Thursday, 25 February 16
DRY BULKERS ARE SCRAPPED AT RECORD PACE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The newbuilding market is at a lull these days, as ship owners are focusing on two fronts, getting rid of excess dry bulk tonnage and snapping up b ...
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- Price Waterhouse Coopers - Russia
- Romanian Commodities Exchange
- Singapore Mercantile Exchange
- Madhucon Powers Ltd - India
- Gujarat Sidhee Cement - India
- Energy Development Corp, Philippines
- Renaissance Capital - South Africa
- Meralco Power Generation, Philippines
- Bayan Resources Tbk. - Indonesia
- Commonwealth Bank - Australia
- CIMB Investment Bank - Malaysia
- CNBM International Corporation - China
- Kalimantan Lumbung Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Coal Association
- India Bulls Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Chettinad Cement Corporation Ltd - India
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- Grasim Industreis Ltd - India
- SN Aboitiz Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Tamil Nadu electricity Board
- Mintek Dendrill Indonesia
- Salva Resources Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Ministry of Mines - Canada
- Bharathi Cement Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- Latin American Coal - Colombia
- Jindal Steel & Power Ltd - India
- The Treasury - Australian Government
- Meenaskhi Energy Private Limited - India
- Star Paper Mills Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- Electricity Authority, New Zealand
- Carbofer General Trading SA - India
- Sree Jayajothi Cements Limited - India
- Samtan Co., Ltd - South Korea
- Trasteel International SA, Italy
- New Zealand Coal & Carbon
- Oldendorff Carriers - Singapore
- Bukit Makmur.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Xindia Steels Limited - India
- Anglo American - United Kingdom
- Antam Resourcindo - Indonesia
- The University of Queensland
- South Luzon Thermal Energy Corporation
- Altura Mining Limited, Indonesia
- GVK Power & Infra Limited - India
- Indian Oil Corporation Limited
- London Commodity Brokers - England
- Manunggal Multi Energi - Indonesia
- Agrawal Coal Company - India
- Ambuja Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Standard Chartered Bank - UAE
- Borneo Indobara - Indonesia
- Indian Energy Exchange, India
- IHS Mccloskey Coal Group - USA
- Planning Commission, India
- Global Coal Blending Company Limited - Australia
- Billiton Holdings Pty Ltd - Australia
- Videocon Industries ltd - India
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- The State Trading Corporation of India Ltd
- Cement Manufacturers Association - India
- Parry Sugars Refinery, India
- Therma Luzon, Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Parliament of New Zealand
- Merrill Lynch Commodities Europe
- Metalloyd Limited - United Kingdom
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Krishnapatnam Port Company Ltd. - India
- SMG Consultants - Indonesia
- Energy Link Ltd, New Zealand
- Eastern Energy - Thailand
- Orica Mining Services - Indonesia
- Independent Power Producers Association of India
- Savvy Resources Ltd - HongKong
- Eastern Coal Council - USA
- Coastal Gujarat Power Limited - India
- Indika Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- TNB Fuel Sdn Bhd - Malaysia
- ICICI Bank Limited - India
- PNOC Exploration Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Medco Energi Mining Internasional
- Coal and Oil Company - UAE
- Vizag Seaport Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Interocean Group of Companies - India
- White Energy Company Limited
- Directorate Of Revenue Intelligence - India
- Malabar Cements Ltd - India
- Bukit Baiduri Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Aboitiz Power Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Tata Chemicals Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sakthi Sugars Limited - India
- Orica Australia Pty. Ltd.
- Wood Mackenzie - Singapore
- Bhoruka Overseas - Indonesia
- Kumho Petrochemical, South Korea
- Asmin Koalindo Tuhup - Indonesia
- Kapuas Tunggal Persada - Indonesia
- McConnell Dowell - Australia
- Miang Besar Coal Terminal - Indonesia
- Central Electricity Authority - India
- Goldman Sachs - Singapore
- Indogreen Group - Indonesia
- Simpson Spence & Young - Indonesia
- Ministry of Transport, Egypt
- Cigading International Bulk Terminal - Indonesia
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- Karbindo Abesyapradhi - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- PowerSource Philippines DevCo
- Georgia Ports Authority, United States
- Posco Energy - South Korea
- Port Waratah Coal Services - Australia
- Dalmia Cement Bharat India
- Siam City Cement - Thailand
- Larsen & Toubro Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Edison Trading Spa - Italy
- Rashtriya Ispat Nigam Limited - India
- GMR Energy Limited - India
- Thiess Contractors Indonesia
- Mercator Lines Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Java Power - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kepco SPC Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Attock Cement Pakistan Limited
- Toyota Tsusho Corporation, Japan
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- International Coal Ventures Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Baramulti Group, Indonesia
- Minerals Council of Australia
- Gujarat Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- SMC Global Power, Philippines
- Bhatia International Limited - India
- Ind-Barath Power Infra Limited - India
- Electricity Generating Authority of Thailand
- Banpu Public Company Limited - Thailand
- MS Steel International - UAE
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- Formosa Plastics Group - Taiwan
- European Bulk Services B.V. - Netherlands
- Thai Mozambique Logistica
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aditya Birla Group - India
- Leighton Contractors Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Marubeni Corporation - India
- Rio Tinto Coal - Australia
- Wilmar Investment Holdings
- Economic Council, Georgia
- Sical Logistics Limited - India
- Coalindo Energy - Indonesia
- Vedanta Resources Plc - India
- PTC India Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Global Business Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Australian Commodity Traders Exchange
- Mjunction Services Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Kobexindo Tractors - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Deloitte Consulting - India
- Kideco Jaya Agung - Indonesia
- Alfred C Toepfer International GmbH - Germany
- AsiaOL BioFuels Corp., Philippines
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