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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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Wednesday, 15 October 14
SHIPOWNER NOT LIABLE FOR CARGO DAMAGE RESULTING FROM POOR STOWAGE - CLYDE & CO
KNOWLEDGE TO ELEVATE
Russian metal trading company Yuzhny Zavod Metall Profil (YZMP), the holder of a CONGEN 1994 bill of lading, took delivery o ...
Wednesday, 15 October 14
NEWCASTLE SHIPPED 13.96 MILLION TONS OF COAL IN SEPTEMBER; UP 5.72%
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $1,227.7 wor ...
Tuesday, 14 October 14
KING COAL UNDER ATTACK? - EVA TZIMA
With the last quarter of the year being well underway and with no strong signs that the Dry Bulk market could be ready for a big positive reversal, ...
Tuesday, 14 October 14
THE NEW CHINESE TRANSPORTATION TAX LAW: WHAT DOES IT MEAN FOR GREEK SHIPPING? - DELOITTE
China has recently promulgated a new law which imposes tax on profits from freights of inbound routes. The objective of the new tax law titled &ldq ...
Monday, 13 October 14
CHINESE COAL IMPORT TARIFFS YET ANOTHER BLOW TO AUSTRALIAN COAL EXPORTS - TIM BUCKLEY
COALspot.com: China’s unexpected move to reintroduce thermal coal import tariffs of 6% will have a materially negative impact on the viabilit ...
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- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- Price Waterhouse Coopers - Russia
- India Bulls Power Limited - India
- Power Finance Corporation Ltd., India
- New Zealand Coal & Carbon
- Carbofer General Trading SA - India
- Makarim & Taira - Indonesia
- OPG Power Generation Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- VISA Power Limited - India
- Straits Asia Resources Limited - Singapore
- Orica Mining Services - Indonesia
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- Bhatia International Limited - India
- Borneo Indobara - Indonesia
- Wood Mackenzie - Singapore
- Formosa Plastics Group - Taiwan
- Bukit Baiduri Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Antam Resourcindo - Indonesia
- London Commodity Brokers - England
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Leighton Contractors Pty Ltd - Australia
- Independent Power Producers Association of India
- SN Aboitiz Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- MS Steel International - UAE
- Larsen & Toubro Limited - India
- Bukit Makmur.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Romanian Commodities Exchange
- Bangladesh Power Developement Board
- Deloitte Consulting - India
- Georgia Ports Authority, United States
- Ministry of Transport, Egypt
- Kaltim Prima Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Indogreen Group - Indonesia
- Thai Mozambique Logistica
- Coal and Oil Company - UAE
- PowerSource Philippines DevCo
- Kapuas Tunggal Persada - Indonesia
- Africa Commodities Group - South Africa
- Rashtriya Ispat Nigam Limited - India
- Indika Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- Economic Council, Georgia
- Kalimantan Lumbung Energi - Indonesia
- Wilmar Investment Holdings
- Sinarmas Energy and Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- SMC Global Power, Philippines
- Madhucon Powers Ltd - India
- Samtan Co., Ltd - South Korea
- Altura Mining Limited, Indonesia
- Videocon Industries ltd - India
- Oldendorff Carriers - Singapore
- GAC Shipping (India) Pvt Ltd
- Cement Manufacturers Association - India
- Bukit Asam (Persero) Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- PNOC Exploration Corporation - Philippines
- Energy Development Corp, Philippines
- Electricity Generating Authority of Thailand
- AsiaOL BioFuels Corp., Philippines
- Parry Sugars Refinery, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bharathi Cement Corporation - India
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
- Rio Tinto Coal - Australia
- Petron Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Ministry of Mines - Canada
- Xindia Steels Limited - India
- Kobexindo Tractors - Indoneisa
- ICICI Bank Limited - India
- Grasim Industreis Ltd - India
- Gujarat Sidhee Cement - India
- Port Waratah Coal Services - Australia
- San Jose City I Power Corp, Philippines
- Orica Australia Pty. Ltd.
- Baramulti Group, Indonesia
- International Coal Ventures Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Savvy Resources Ltd - HongKong
- Aditya Birla Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Lanco Infratech Ltd - India
- Vedanta Resources Plc - India
- Vizag Seaport Private Limited - India
- IEA Clean Coal Centre - UK
- Toyota Tsusho Corporation, Japan
- Sical Logistics Limited - India
- Goldman Sachs - Singapore
- Ministry of Finance - Indonesia
- GMR Energy Limited - India
- Holcim Trading Pte Ltd - Singapore
- Sree Jayajothi Cements Limited - India
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- Singapore Mercantile Exchange
- Maharashtra Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- Posco Energy - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Salva Resources Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- The State Trading Corporation of India Ltd
- Thiess Contractors Indonesia
- LBH Netherlands Bv - Netherlands
- Sarangani Energy Corporation, Philippines
- Tamil Nadu electricity Board
- SMG Consultants - Indonesia
- Sakthi Sugars Limited - India
- Marubeni Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Pipit Mutiara Jaya. PT, Indonesia
- Kartika Selabumi Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- Gujarat Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- PetroVietnam Power Coal Import and Supply Company
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
- Indian Oil Corporation Limited
- Semirara Mining and Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Iligan Light & Power Inc, Philippines
- Malabar Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Tata Chemicals Ltd - India
- Chamber of Mines of South Africa
- Australian Commodity Traders Exchange
- Kideco Jaya Agung - Indonesia
- Bulk Trading Sa - Switzerland
- Miang Besar Coal Terminal - Indonesia
- Central Java Power - Indonesia
- TeaM Sual Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Ind-Barath Power Infra Limited - India
- Barasentosa Lestari - Indonesia
- Attock Cement Pakistan Limited
- Trasteel International SA, Italy
- GVK Power & Infra Limited - India
- Intertek Mineral Services - Indonesia
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- Parliament of New Zealand
- Merrill Lynch Commodities Europe
- Aboitiz Power Corporation - Philippines
- Siam City Cement - Thailand
- Mercator Lines Limited - India
- Indonesian Coal Mining Association
- Edison Trading Spa - Italy
- Mintek Dendrill Indonesia
- Sindya Power Generating Company Private Ltd
- Karbindo Abesyapradhi - Indoneisa
- Star Paper Mills Limited - India
- Riau Bara Harum - Indonesia
- Metalloyd Limited - United Kingdom
- Interocean Group of Companies - India
- McConnell Dowell - Australia
- Heidelberg Cement - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Banpu Public Company Limited - Thailand
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- Semirara Mining Corp, Philippines
- Planning Commission, India
- Jorong Barutama Greston.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Australian Coal Association
- White Energy Company Limited
- CNBM International Corporation - China
- Ambuja Cements Ltd - India
- Meralco Power Generation, Philippines
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Energy - Thailand
- Agrawal Coal Company - India
- Alfred C Toepfer International GmbH - Germany
- Eastern Coal Council - USA
- Pendopo Energi Batubara - Indonesia
- Global Business Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- PTC India Limited - India
- The University of Queensland
- CIMB Investment Bank - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Coalindo Energy - Indonesia
- Central Electricity Authority - India
- Simpson Spence & Young - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- Standard Chartered Bank - UAE
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- Jindal Steel & Power Ltd - India
- Latin American Coal - Colombia
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