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