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