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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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Saturday, 15 February 20
CHEN ZHIDA: NOVEL CORONAVIRUS - IMPLICATIONS FOR CHARTERPARTIES - SHIPOWNERS' CLUB
KNOWLEDGE TO ELEVATE
Last month, the Club issued a bulletin on the 2019 Novel Coronavirus (COVID-19) which explained the origin of the virus a ...
Saturday, 15 February 20
AFRAMAX: A MORE POSITIVE ATTITUDE EXISTED IN THIS SECTOR WITH RATES IMPROVING ON ALL ROUTES - BALTIC BRIEFING
VLCC
The market in the Middle East was unmoved this week, with Chinese refiners continuing to slow imports, allied with the impact of the Coron ...
Saturday, 15 February 20
A 56,000DWT VESSEL WAS CONCLUDED BASIS DELIVERY SINGAPORE VIA INDONESIA REDELIVERY CHINA IN THE LOW $6,000S - BALTIC BRIEFING
Capesize
Riding the downward momentum of the previous week, the market was always going to be hard pressed to make any sort of revival. With mu ...
Saturday, 15 February 20
U.S. COAL PRODUCTION WILL TOTAL 595 MMST IN 2020, DOWN 14% FROM 2019 - EIA
EIA forecasts that U.S. coal production will total 595 million short tons (MMst) in 2020, down 95 MMst (14%) from 2019.
Lower ...
Friday, 14 February 20
WHY THE WORLD ECONOMY WILL BE FACING CHINA'S CORONAVIRUS FOR A LONG TIME - CNBC
Everywhere we look we see the headlines and commentators talking about the coronavirus and its impact on tourism, trade and investment between Chin ...
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- Sinarmas Energy and Mining - Indonesia
- Uttam Galva Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- Xindia Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Thai Mozambique Logistica
- Sarangani Energy Corporation, Philippines
- ICICI Bank Limited - India
- Iligan Light & Power Inc, Philippines
- Central Electricity Authority - India
- Aboitiz Power Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Riau Bara Harum - Indonesia
- Directorate Of Revenue Intelligence - India
- Kohat Cement Company Ltd. - Pakistan
- Neyveli Lignite Corporation Ltd, - India
- Pendopo Energi Batubara - Indonesia
- Ministry of Mines - Canada
- Electricity Authority, New Zealand
- Romanian Commodities Exchange
- Energy Link Ltd, New Zealand
- Ministry of Finance - Indonesia
- Global Coal Blending Company Limited - Australia
- Indogreen Group - Indonesia
- Parliament of New Zealand
- IHS Mccloskey Coal Group - USA
- Edison Trading Spa - Italy
- Straits Asia Resources Limited - Singapore
- Georgia Ports Authority, United States
- Holcim Trading Pte Ltd - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- McConnell Dowell - Australia
- Jindal Steel & Power Ltd - India
- Kaltim Prima Coal - Indonesia
- Chamber of Mines of South Africa
- SN Aboitiz Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Cement Manufacturers Association - India
- Savvy Resources Ltd - HongKong
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- Mercator Lines Limited - India
- MS Steel International - UAE
- Vizag Seaport Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Bangladesh Power Developement Board
- Alfred C Toepfer International GmbH - Germany
- Bahari Cakrawala Sebuku - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Tata Chemicals Ltd - India
- The State Trading Corporation of India Ltd
- Heidelberg Cement - Germany
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Meralco Power Generation, Philippines
- Singapore Mercantile Exchange
- PTC India Limited - India
- Global Green Power PLC Corporation, Philippines
- Coal and Oil Company - UAE
- Madhucon Powers Ltd - India
- Bhatia International Limited - India
- Intertek Mineral Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PowerSource Philippines DevCo
- Interocean Group of Companies - India
- CIMB Investment Bank - Malaysia
- Kartika Selabumi Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- AsiaOL BioFuels Corp., Philippines
- Karbindo Abesyapradhi - Indoneisa
- San Jose City I Power Corp, Philippines
- Merrill Lynch Commodities Europe
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- Coastal Gujarat Power Limited - India
- Jaiprakash Power Ventures ltd
- ASAPP Information Group - India
- Krishnapatnam Port Company Ltd. - India
- Economic Council, Georgia
- Ministry of Transport, Egypt
- International Coal Ventures Pvt Ltd - India
- The Treasury - Australian Government
- Maheswari Brothers Coal Limited - India
- Indo Tambangraya Megah - Indonesia
- New Zealand Coal & Carbon
- Therma Luzon, Inc, Philippines
- Australian Coal Association
- Malabar Cements Ltd - India
- Attock Cement Pakistan Limited
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- SMC Global Power, Philippines
- Essar Steel Hazira Ltd - India
- Salva Resources Pvt Ltd - India
- Coalindo Energy - Indonesia
- Africa Commodities Group - South Africa
- Simpson Spence & Young - Indonesia
- Standard Chartered Bank - UAE
- Renaissance Capital - South Africa
- Wilmar Investment Holdings
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Power Finance Corporation Ltd., India
- Barasentosa Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Tamil Nadu electricity Board
- Kalimantan Lumbung Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Posco Energy - South Korea
- Timah Investasi Mineral - Indoneisa
- Formosa Plastics Group - Taiwan
- Australian Commodity Traders Exchange
- Latin American Coal - Colombia
- Leighton Contractors Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- Gujarat Sidhee Cement - India
- Indika Energy - Indonesia
- Semirara Mining Corp, Philippines
- Altura Mining Limited, Indonesia
- Kumho Petrochemical, South Korea
- Goldman Sachs - Singapore
- Anglo American - United Kingdom
- Sojitz Corporation - Japan
- White Energy Company Limited
- Bayan Resources Tbk. - Indonesia
- Aditya Birla Group - India
- Baramulti Group, Indonesia
- Agrawal Coal Company - India
- Rashtriya Ispat Nigam Limited - India
- Kobexindo Tractors - Indoneisa
- Ambuja Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- OPG Power Generation Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- India Bulls Power Limited - India
- Banpu Public Company Limited - Thailand
- Independent Power Producers Association of India
- Bukit Baiduri Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Eastern Energy - Thailand
- Thiess Contractors Indonesia
- Billiton Holdings Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Price Waterhouse Coopers - Russia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Carbofer General Trading SA - India
- Sindya Power Generating Company Private Ltd
- Antam Resourcindo - Indonesia
- GAC Shipping (India) Pvt Ltd
- European Bulk Services B.V. - Netherlands
- Star Paper Mills Limited - India
- Eastern Coal Council - USA
- Grasim Industreis Ltd - India
- Bulk Trading Sa - Switzerland
- Orica Mining Services - Indonesia
- Siam City Cement PLC, Thailand
- Dalmia Cement Bharat India
- Oldendorff Carriers - Singapore
- GMR Energy Limited - India
- Makarim & Taira - Indonesia
- London Commodity Brokers - England
- CNBM International Corporation - China
- Energy Development Corp, Philippines
- Sakthi Sugars Limited - India
- Rio Tinto Coal - Australia
- Central Java Power - Indonesia
- Globalindo Alam Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- SMG Consultants - Indonesia
- Minerals Council of Australia
- VISA Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Bhushan Steel Limited - India
- Karaikal Port Pvt Ltd - India
- Parry Sugars Refinery, India
- Miang Besar Coal Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- Indian Energy Exchange, India
- Planning Commission, India
- Bukit Makmur.PT - Indonesia
- Mintek Dendrill Indonesia
- Meenaskhi Energy Private Limited - India
- IEA Clean Coal Centre - UK
- Sical Logistics Limited - India
- Borneo Indobara - Indonesia
- Electricity Generating Authority of Thailand
- Kepco SPC Power Corporation, Philippines
- Mjunction Services Limited - India
- Manunggal Multi Energi - Indonesia
- Larsen & Toubro Limited - India
- Wood Mackenzie - Singapore
- Semirara Mining and Power Corporation, Philippines
- Marubeni Corporation - India
- Orica Australia Pty. Ltd.
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Mineral Development Corp Ltd - India
- The University of Queensland
- Global Business Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Kideco Jaya Agung - Indonesia
- Bhoruka Overseas - Indonesia
- Videocon Industries ltd - India
- Deloitte Consulting - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Lanco Infratech Ltd - India
- Chettinad Cement Corporation Ltd - India
- Siam City Cement - Thailand
- Toyota Tsusho Corporation, Japan
- GVK Power & Infra Limited - India
- Vedanta Resources Plc - India
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