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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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Friday, 18 December 15
WHEN IS A MASTER ENTITLED TO REFUSE DAMAGED CARGO? A REMINDER - THE STANDARD CLUB
KNOWLEDGE TO ELEVATE
A master’s authority to clause bills of lading issued by or on his behalf can sometimes become the cause of disagreeme ...
Friday, 18 December 15
CHINA GROWTH SHOCK TO HIT ENERGY, SHIPPING, STEEL MOST - FITCH
Energy, shipping and steel would be the hardest-hit sectors in Asia-Pacific (APAC) in the event of a sharp slowdown in Chinese growth, says Fitch R ...
Friday, 18 December 15
WEEKLY U.S. COAL PRODUCTION REMAINS FLAT ACROSS ALL BASINS
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 16.1 million shor ...
Thursday, 17 December 15
THE LOW DEMAND AND EXCESS COAL OUTPUT, KEEP THE FOB INDONESIA COAL SWAPS UNDER PRESSURE
COALspot.com: Indonesian coal swap for delivery Q1 2016 rose month on month and decline slightly week over week. For the week ended December 11, 20 ...
Thursday, 17 December 15
GLADSTONE PORT COAL RECORD LOOMING, EXPORTS UP 12% - GLADSTONE OBSERVER
COAL exports from Gladstone's port have taken a leap, with more than seven million tonnes leaving the wharves in November.
That increase i ...
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- Toyota Tsusho Corporation, Japan
- Borneo Indobara - Indonesia
- PTC India Limited - India
- Sindya Power Generating Company Private Ltd
- Kartika Selabumi Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Sree Jayajothi Cements Limited - India
- Krishnapatnam Port Company Ltd. - India
- Trasteel International SA, Italy
- Makarim & Taira - Indonesia
- Videocon Industries ltd - India
- Riau Bara Harum - Indonesia
- Bhoruka Overseas - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Bharathi Cement Corporation - India
- Formosa Plastics Group - Taiwan
- Standard Chartered Bank - UAE
- ICICI Bank Limited - India
- Thai Mozambique Logistica
- Wood Mackenzie - Singapore
- Maheswari Brothers Coal Limited - India
- Ministry of Mines - Canada
- Georgia Ports Authority, United States
- Attock Cement Pakistan Limited
- PetroVietnam Power Coal Import and Supply Company
- Renaissance Capital - South Africa
- Deloitte Consulting - India
- TeaM Sual Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Parry Sugars Refinery, India
- Indika Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- Kideco Jaya Agung - Indonesia
- Energy Development Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- MS Steel International - UAE
- Semirara Mining Corp, Philippines
- Cement Manufacturers Association - India
- Simpson Spence & Young - Indonesia
- The Treasury - Australian Government
- Bulk Trading Sa - Switzerland
- Meenaskhi Energy Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Vedanta Resources Plc - India
- Xindia Steels Limited - India
- Jaiprakash Power Ventures ltd
- Mjunction Services Limited - India
- Meralco Power Generation, Philippines
- Metalloyd Limited - United Kingdom
- Ministry of Finance - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Agrawal Coal Company - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- South Luzon Thermal Energy Corporation
- Sojitz Corporation - Japan
- Latin American Coal - Colombia
- Aboitiz Power Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Essar Steel Hazira Ltd - India
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Eastern Energy - Thailand
- Chettinad Cement Corporation Ltd - India
- Kumho Petrochemical, South Korea
- White Energy Company Limited
- Global Coal Blending Company Limited - Australia
- Australian Commodity Traders Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Orica Mining Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Sidhee Cement - India
- San Jose City I Power Corp, Philippines
- Wilmar Investment Holdings
- OPG Power Generation Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Romanian Commodities Exchange
- Mercator Lines Limited - India
- Siam City Cement PLC, Thailand
- PowerSource Philippines DevCo
- Vizag Seaport Private Limited - India
- Heidelberg Cement - Germany
- CNBM International Corporation - China
- ASAPP Information Group - India
- Anglo American - United Kingdom
- Banpu Public Company Limited - Thailand
- The State Trading Corporation of India Ltd
- Commonwealth Bank - Australia
- Electricity Authority, New Zealand
- Dalmia Cement Bharat India
- Star Paper Mills Limited - India
- Marubeni Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Petron Corporation, Philippines
- Singapore Mercantile Exchange
- Indo Tambangraya Megah - Indonesia
- Sakthi Sugars Limited - India
- Leighton Contractors Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Independent Power Producers Association of India
- VISA Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Tata Chemicals Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Eastern Coal Council - USA
- Grasim Industreis Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Carbofer General Trading SA - India
- CIMB Investment Bank - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Therma Luzon, Inc, Philippines
- The University of Queensland
- Ambuja Cements Ltd - India
- Salva Resources Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Mercuria Energy - Indonesia
- Power Finance Corporation Ltd., India
- Directorate Of Revenue Intelligence - India
- Iligan Light & Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Baramulti Group, Indonesia
- Economic Council, Georgia
- Goldman Sachs - Singapore
- Sical Logistics Limited - India
- Kepco SPC Power Corporation, Philippines
- Bhatia International Limited - India
- Mintek Dendrill Indonesia
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- Aditya Birla Group - India
- Kaltim Prima Coal - Indonesia
- Indogreen Group - Indonesia
- Bangladesh Power Developement Board
- Siam City Cement - Thailand
- Binh Thuan Hamico - Vietnam
- Savvy Resources Ltd - HongKong
- Lanco Infratech Ltd - India
- Minerals Council of Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Generating Authority of Thailand
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- Coastal Gujarat Power Limited - India
- Interocean Group of Companies - India
- Gujarat Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Samtan Co., Ltd - South Korea
- Rashtriya Ispat Nigam Limited - India
- European Bulk Services B.V. - Netherlands
- Planning Commission, India
- Kapuas Tunggal Persada - Indonesia
- Merrill Lynch Commodities Europe
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Transport, Egypt
- Oldendorff Carriers - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chamber of Mines of South Africa
- Barasentosa Lestari - Indonesia
- India Bulls Power Limited - India
- Central Electricity Authority - India
- Kohat Cement Company Ltd. - Pakistan
- SMC Global Power, Philippines
- Central Java Power - Indonesia
- Altura Mining Limited, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Larsen & Toubro Limited - India
- Medco Energi Mining Internasional
- Coalindo Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- McConnell Dowell - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rio Tinto Coal - Australia
- Port Waratah Coal Services - Australia
- Australian Coal Association
- TNB Fuel Sdn Bhd - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Parliament of New Zealand
- Globalindo Alam Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Madhucon Powers Ltd - India
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- London Commodity Brokers - England
- Malabar Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- GVK Power & Infra Limited - India
- Indian Oil Corporation Limited
- Thiess Contractors Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Energy Exchange, India
- Energy Link Ltd, New Zealand
- Antam Resourcindo - Indonesia
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
- Global Business Power Corporation, Philippines
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