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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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Monday, 10 March 14
THE FREIGHT MARKET WAS QUITE FIRM THIS PAST WEEK
COALspot.com: The freight market was quite firm this past week with BDI sharply increased by 22.65 pct week on week and closed at 1543 points, while ...
Saturday, 08 March 14
LETTERS OF INDEMNITY - SKULD
KNOWLEDGE TO ELEVATE
In today's trading market, owners are frequently requested to accept a letter of indemnity (LOI) in exchange for complying ...
Friday, 07 March 14
DRY BULK MARKET TO BENEFIT FROM CHINA'S GDP GROWTH TARGET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
With the dry bulk market freight rates finally making waves, China's aim of 7.5% GDP growth for 2014 mean once again positive news for the shipping ...
Friday, 07 March 14
RBCT, WORLD'S LARGEST COAL EXPORTING TERMINAL SHIPPED 1.78% LESS COAL MONTH ON MONTH
COALspot.com: South Africa's Richards Bay Coal Terminal (RBCT) the single largest export coal terminal in the world, shipped 4.487 million tons of ...
Friday, 07 March 14
INDONESIA SHIPPED 7% LESS COAL IN JANUARY 2014 COMPARED TO ITS DECEMBER EXPORTS
COALspot.com: Indonesia, the world 4th largest coal producer and the Global largest multi grade coal exporter shipped around $1.8* billion ...
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- Bhushan Steel Limited - India
- Commonwealth Bank - Australia
- Savvy Resources Ltd - HongKong
- Sindya Power Generating Company Private Ltd
- Parliament of New Zealand
- Anglo American - United Kingdom
- Xindia Steels Limited - India
- TeaM Sual Corporation - Philippines
- Eastern Energy - Thailand
- Thiess Contractors Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Romanian Commodities Exchange
- Antam Resourcindo - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Latin American Coal - Colombia
- Indo Tambangraya Megah - Indonesia
- Australian Coal Association
- Sinarmas Energy and Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Ambuja Cements Ltd - India
- Goldman Sachs - Singapore
- Ministry of Finance - Indonesia
- IHS Mccloskey Coal Group - USA
- Oldendorff Carriers - Singapore
- Indian Energy Exchange, India
- Mintek Dendrill Indonesia
- Vizag Seaport Private Limited - India
- Pendopo Energi Batubara - Indonesia
- GMR Energy Limited - India
- PNOC Exploration Corporation - Philippines
- Port Waratah Coal Services - Australia
- Minerals Council of Australia
- Bukit Baiduri Energy - Indonesia
- Ministry of Mines - Canada
- Straits Asia Resources Limited - Singapore
- Semirara Mining and Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Deloitte Consulting - India
- Billiton Holdings Pty Ltd - Australia
- Thai Mozambique Logistica
- Maharashtra Electricity Regulatory Commission - India
- MS Steel International - UAE
- Neyveli Lignite Corporation Ltd, - India
- SN Aboitiz Power Inc, Philippines
- Coal and Oil Company - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Star Paper Mills Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Eastern Coal Council - USA
- McConnell Dowell - Australia
- Kepco SPC Power Corporation, Philippines
- Mjunction Services Limited - India
- London Commodity Brokers - England
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- Gujarat Sidhee Cement - India
- Price Waterhouse Coopers - Russia
- Holcim Trading Pte Ltd - Singapore
- GVK Power & Infra Limited - India
- Ind-Barath Power Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- New Zealand Coal & Carbon
- Binh Thuan Hamico - Vietnam
- Standard Chartered Bank - UAE
- Semirara Mining Corp, Philippines
- Electricity Generating Authority of Thailand
- Kideco Jaya Agung - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Jorong Barutama Greston.PT - Indonesia
- Aditya Birla Group - India
- Merrill Lynch Commodities Europe
- Singapore Mercantile Exchange
- Jindal Steel & Power Ltd - India
- International Coal Ventures Pvt Ltd - India
- Interocean Group of Companies - India
- Therma Luzon, Inc, Philippines
- Wilmar Investment Holdings
- Africa Commodities Group - South Africa
- ASAPP Information Group - India
- Marubeni Corporation - India
- SMC Global Power, Philippines
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- Electricity Authority, New Zealand
- Manunggal Multi Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Australian Commodity Traders Exchange
- Meralco Power Generation, Philippines
- Madhucon Powers Ltd - India
- GAC Shipping (India) Pvt Ltd
- Medco Energi Mining Internasional
- Jaiprakash Power Ventures ltd
- Cigading International Bulk Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMG Consultants - Indonesia
- Indian Oil Corporation Limited
- Sakthi Sugars Limited - India
- European Bulk Services B.V. - Netherlands
- Malabar Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Economic Council, Georgia
- Wood Mackenzie - Singapore
- South Luzon Thermal Energy Corporation
- Toyota Tsusho Corporation, Japan
- Rio Tinto Coal - Australia
- Bayan Resources Tbk. - Indonesia
- Intertek Mineral Services - Indonesia
- Trasteel International SA, Italy
- Parry Sugars Refinery, India
- Mercator Lines Limited - India
- Globalindo Alam Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Central Electricity Authority - India
- Edison Trading Spa - Italy
- Bharathi Cement Corporation - India
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Riau Bara Harum - Indonesia
- Ministry of Transport, Egypt
- White Energy Company Limited
- Indonesian Coal Mining Association
- Orica Mining Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Link Ltd, New Zealand
- Meenaskhi Energy Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Posco Energy - South Korea
- Attock Cement Pakistan Limited
- Tamil Nadu electricity Board
- Energy Development Corp, Philippines
- Siam City Cement PLC, Thailand
- Aboitiz Power Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Kobexindo Tractors - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- IEA Clean Coal Centre - UK
- Global Business Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Gujarat Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Essar Steel Hazira Ltd - India
- Altura Mining Limited, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Mineral Development Corp Ltd - India
- Indika Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Sojitz Corporation - Japan
- Videocon Industries ltd - India
- Petron Corporation, Philippines
- Dalmia Cement Bharat India
- Timah Investasi Mineral - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Kartika Selabumi Mining - Indonesia
- Coalindo Energy - Indonesia
- The University of Queensland
- Renaissance Capital - South Africa
- Kumho Petrochemical, South Korea
- Samtan Co., Ltd - South Korea
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- Agrawal Coal Company - India
- Karaikal Port Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Baramulti Group, Indonesia
- Iligan Light & Power Inc, Philippines
- Sical Logistics Limited - India
- PTC India Limited - India
- Coastal Gujarat Power Limited - India
- Independent Power Producers Association of India
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- VISA Power Limited - India
- Central Java Power - Indonesia
- Formosa Plastics Group - Taiwan
- Kaltim Prima Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Borneo Indobara - Indonesia
- The Treasury - Australian Government
- Georgia Ports Authority, United States
- Asmin Koalindo Tuhup - Indonesia
- Bhatia International Limited - India
- Indogreen Group - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate Of Revenue Intelligence - India
- Makarim & Taira - Indonesia
- Vedanta Resources Plc - India
- Larsen & Toubro Limited - India
- Planning Commission, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cement Manufacturers Association - India
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement - Thailand
- Uttam Galva Steels Limited - India
- India Bulls Power Limited - India
- CIMB Investment Bank - Malaysia
- Barasentosa Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
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