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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, 27 September 19
LOWDOWN ON INCOTERMS 2020 OVERHAUL - BALTIC EXCHANGE
KNOWLEDGE TO ELEVATE
This ninth revision of Incoterms is changed in style and substance. The revisions improve certain aspects of Incoterms 20 ...
Thursday, 26 September 19
INDIA INCREASES ITS ANNUAL COAL PRODUCTION BY 2.7% PER YEAR FROM 850 MILLION SHORT TONS IN 2018 TO 2 BILLION SHORT TONS BY 2050 - EIA
Worldwide coal production holds steady at about 8 billion short tons, or 160 quadrillion British thermal units (Btu), per year through 2040. Inc ...
Wednesday, 25 September 19
SHIPPING MARKET INSIGHT - INTERMODAL
In the past five months there has been significant activity in the asset market with the dry bulk segment being by far the most volatile in terms o ...
Tuesday, 24 September 19
9TH ANNUAL SUPPLY CHAIN INNOVATION SUMMIT 2019 ASIA PACIFIC
Summit: 9th Annual Supply Chain Innovation Summit 2019 Asia Pacific
Host: Ace Events
Website: http: ...
Monday, 23 September 19
SUPRAMAX: THE ASIAN ARENA IT WAS A SLOW START, BUT DEMAND INCREASED AS THE WEEK WENT ON - BALTIC BRIEFING
Capesize
The market trended down over this past week, breaking the market out of its upward trending range. While the market traded sideways at ...
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- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- Directorate Of Revenue Intelligence - India
- Semirara Mining Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- Wood Mackenzie - Singapore
- Bhatia International Limited - India
- Lanco Infratech Ltd - India
- Oldendorff Carriers - Singapore
- Port Waratah Coal Services - Australia
- Wilmar Investment Holdings
- PNOC Exploration Corporation - Philippines
- Deloitte Consulting - India
- Price Waterhouse Coopers - Russia
- CIMB Investment Bank - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Uttam Galva Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Global Green Power PLC Corporation, Philippines
- Kumho Petrochemical, South Korea
- MS Steel International - UAE
- CNBM International Corporation - China
- Grasim Industreis Ltd - India
- Barasentosa Lestari - Indonesia
- Madhucon Powers Ltd - India
- IEA Clean Coal Centre - UK
- Trasteel International SA, Italy
- Orica Mining Services - Indonesia
- Altura Mining Limited, Indonesia
- Borneo Indobara - Indonesia
- Kepco SPC Power Corporation, Philippines
- PTC India Limited - India
- Tamil Nadu electricity Board
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Simpson Spence & Young - Indonesia
- Thai Mozambique Logistica
- Latin American Coal - Colombia
- Coal and Oil Company - UAE
- SN Aboitiz Power Inc, Philippines
- Heidelberg Cement - Germany
- Interocean Group of Companies - India
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- India Bulls Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Riau Bara Harum - Indonesia
- Standard Chartered Bank - UAE
- Leighton Contractors Pty Ltd - Australia
- Cement Manufacturers Association - India
- Jaiprakash Power Ventures ltd
- Star Paper Mills Limited - India
- OPG Power Generation Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Commonwealth Bank - Australia
- GAC Shipping (India) Pvt Ltd
- Formosa Plastics Group - Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Bhoruka Overseas - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Economic Council, Georgia
- Alfred C Toepfer International GmbH - Germany
- McConnell Dowell - Australia
- Georgia Ports Authority, United States
- Bhushan Steel Limited - India
- PowerSource Philippines DevCo
- Directorate General of MIneral and Coal - Indonesia
- Sojitz Corporation - Japan
- Therma Luzon, Inc, Philippines
- Parliament of New Zealand
- Australian Coal Association
- London Commodity Brokers - England
- ICICI Bank Limited - India
- Tata Chemicals Ltd - India
- Mintek Dendrill Indonesia
- Siam City Cement PLC, Thailand
- South Luzon Thermal Energy Corporation
- Sinarmas Energy and Mining - Indonesia
- Dalmia Cement Bharat India
- Meenaskhi Energy Private Limited - India
- Malabar Cements Ltd - India
- Mercuria Energy - Indonesia
- Sical Logistics Limited - India
- ASAPP Information Group - India
- Attock Cement Pakistan Limited
- Ind-Barath Power Infra Limited - India
- Renaissance Capital - South Africa
- Marubeni Corporation - India
- Coalindo Energy - Indonesia
- GVK Power & Infra Limited - India
- Africa Commodities Group - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Vedanta Resources Plc - India
- Petron Corporation, Philippines
- White Energy Company Limited
- Indian Energy Exchange, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pendopo Energi Batubara - Indonesia
- Binh Thuan Hamico - Vietnam
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMC Global Power, Philippines
- Globalindo Alam Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Makarim & Taira - Indonesia
- Indogreen Group - Indonesia
- Indonesian Coal Mining Association
- Global Coal Blending Company Limited - Australia
- Kaltim Prima Coal - Indonesia
- Central Electricity Authority - India
- Kobexindo Tractors - Indoneisa
- European Bulk Services B.V. - Netherlands
- Straits Asia Resources Limited - Singapore
- Essar Steel Hazira Ltd - India
- Xindia Steels Limited - India
- Sakthi Sugars Limited - India
- Bukit Baiduri Energy - Indonesia
- Goldman Sachs - Singapore
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Gujarat Sidhee Cement - India
- New Zealand Coal & Carbon
- Toyota Tsusho Corporation, Japan
- LBH Netherlands Bv - Netherlands
- Electricity Authority, New Zealand
- Jindal Steel & Power Ltd - India
- Edison Trading Spa - Italy
- Parry Sugars Refinery, India
- Coastal Gujarat Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Agrawal Coal Company - India
- Mercator Lines Limited - India
- International Coal Ventures Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Chettinad Cement Corporation Ltd - India
- Maheswari Brothers Coal Limited - India
- Sindya Power Generating Company Private Ltd
- Karaikal Port Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Indian Oil Corporation Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Romanian Commodities Exchange
- Singapore Mercantile Exchange
- Central Java Power - Indonesia
- Posco Energy - South Korea
- Bangladesh Power Developement Board
- Minerals Council of Australia
- Australian Commodity Traders Exchange
- Ministry of Transport, Egypt
- Sarangani Energy Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Global Business Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- TNB Fuel Sdn Bhd - Malaysia
- Thiess Contractors Indonesia
- SMG Consultants - Indonesia
- Power Finance Corporation Ltd., India
- Electricity Generating Authority of Thailand
- Sree Jayajothi Cements Limited - India
- Samtan Co., Ltd - South Korea
- Salva Resources Pvt Ltd - India
- Aditya Birla Group - India
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Finance - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Eastern Coal Council - USA
- Merrill Lynch Commodities Europe
- Kapuas Tunggal Persada - Indonesia
- Videocon Industries ltd - India
- Energy Development Corp, Philippines
- TeaM Sual Corporation - Philippines
- The State Trading Corporation of India Ltd
- Siam City Cement - Thailand
- Banpu Public Company Limited - Thailand
- Ministry of Mines - Canada
- Neyveli Lignite Corporation Ltd, - India
- Metalloyd Limited - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- VISA Power Limited - India
- Baramulti Group, Indonesia
- Kideco Jaya Agung - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Iligan Light & Power Inc, Philippines
- GMR Energy Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Carbofer General Trading SA - India
- Larsen & Toubro Limited - India
- Medco Energi Mining Internasional
- The University of Queensland
- Rio Tinto Coal - Australia
- Billiton Holdings Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Independent Power Producers Association of India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chamber of Mines of South Africa
- Planning Commission, India
- Kartika Selabumi Mining - Indonesia
- Mjunction Services Limited - India
- Vizag Seaport Private Limited - India
- Meralco Power Generation, Philippines
- Bayan Resources Tbk. - Indonesia
- Antam Resourcindo - Indonesia
- Ambuja Cements Ltd - India
- Eastern Energy - Thailand
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