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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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Tuesday, 17 September 19
THE DRY BULK FREIGHT MARKET IS ALREADY ON A DOWNWARD CORRECTION - ALLIED
Here we are again, just a breath before the final quarter of the year. Under typical circumstances and on the basis of what we have seen during the ...
Monday, 16 September 19
COLOMBIAN COAL PRODUCTION TO FALL 5% THIS YEAR, MINING GROUP SAYS - REUTERS
Colombia’s coal production will decline to around 80 million tonnes in 2019, nearly 5% below last year’s, because of low prices and dro ...
Monday, 16 September 19
THE COAL-D SHOULDER? - BALTIC EXCHANGE
Good fortune and the number 13 don’t usually go hand in hand, but when it comes to coal, 2013 actually seems to have been the commodity&rsquo ...
Monday, 16 September 19
SCRUBBERS AND FUEL PROFIT SHARE CLAUSES - CLYDE&CO
From 1 January 2020, Regulation 14 of MARPOL Annex VI provides that the sulphur content in fuel oil used on board ships shall be reduced from a max ...
Monday, 16 September 19
KOREA SOUTH-EAST POWER INVITES BIDS FOR MAX 1,290,000 METRIC TONS OF STEAMING COAL
COALspot.com: South Korea’s Korea East-West Power Co. Ltd has issued an international tender for total 1,290,000 Metric Tons steam coal.
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- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ind-Barath Power Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Georgia Ports Authority, United States
- Salva Resources Pvt Ltd - India
- ASAPP Information Group - India
- Samtan Co., Ltd - South Korea
- Simpson Spence & Young - Indonesia
- Australian Coal Association
- PowerSource Philippines DevCo
- Pendopo Energi Batubara - Indonesia
- Deloitte Consulting - India
- Gujarat Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Tamil Nadu electricity Board
- Globalindo Alam Lestari - Indonesia
- Siam City Cement - Thailand
- Chamber of Mines of South Africa
- MS Steel International - UAE
- Grasim Industreis Ltd - India
- Heidelberg Cement - Germany
- Central Electricity Authority - India
- Global Business Power Corporation, Philippines
- Goldman Sachs - Singapore
- Savvy Resources Ltd - HongKong
- AsiaOL BioFuels Corp., Philippines
- Bangladesh Power Developement Board
- Bhushan Steel Limited - India
- Power Finance Corporation Ltd., India
- Ceylon Electricity Board - Sri Lanka
- Aboitiz Power Corporation - Philippines
- Marubeni Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Port Waratah Coal Services - Australia
- Attock Cement Pakistan Limited
- Essar Steel Hazira Ltd - India
- Price Waterhouse Coopers - Russia
- Bukit Baiduri Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- PNOC Exploration Corporation - Philippines
- Indika Energy - Indonesia
- Therma Luzon, Inc, Philippines
- SMG Consultants - Indonesia
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- Cement Manufacturers Association - India
- Rio Tinto Coal - Australia
- Metalloyd Limited - United Kingdom
- ICICI Bank Limited - India
- Agrawal Coal Company - India
- Merrill Lynch Commodities Europe
- Trasteel International SA, Italy
- Bharathi Cement Corporation - India
- International Coal Ventures Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Latin American Coal - Colombia
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- McConnell Dowell - Australia
- Asmin Koalindo Tuhup - Indonesia
- Mjunction Services Limited - India
- Billiton Holdings Pty Ltd - Australia
- Electricity Authority, New Zealand
- Indogreen Group - Indonesia
- Global Green Power PLC Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Carbofer General Trading SA - India
- Karbindo Abesyapradhi - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- Rashtriya Ispat Nigam Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- VISA Power Limited - India
- Commonwealth Bank - Australia
- PTC India Limited - India
- Kartika Selabumi Mining - Indonesia
- Economic Council, Georgia
- Pipit Mutiara Jaya. PT, Indonesia
- Kaltim Prima Coal - Indonesia
- Energy Link Ltd, New Zealand
- Alfred C Toepfer International GmbH - Germany
- Thai Mozambique Logistica
- Vijayanagar Sugar Pvt Ltd - India
- Indonesian Coal Mining Association
- Ministry of Mines - Canada
- Lanco Infratech Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Gujarat Sidhee Cement - India
- Mercuria Energy - Indonesia
- Eastern Coal Council - USA
- Sindya Power Generating Company Private Ltd
- Uttam Galva Steels Limited - India
- Ambuja Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Indian Energy Exchange, India
- GN Power Mariveles Coal Plant, Philippines
- Anglo American - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- IHS Mccloskey Coal Group - USA
- Binh Thuan Hamico - Vietnam
- Bayan Resources Tbk. - Indonesia
- Indian Oil Corporation Limited
- Dalmia Cement Bharat India
- Jorong Barutama Greston.PT - Indonesia
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- India Bulls Power Limited - India
- Bulk Trading Sa - Switzerland
- Africa Commodities Group - South Africa
- Chettinad Cement Corporation Ltd - India
- Sakthi Sugars Limited - India
- London Commodity Brokers - England
- The State Trading Corporation of India Ltd
- Larsen & Toubro Limited - India
- Ministry of Finance - Indonesia
- Coalindo Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Australia Pty. Ltd.
- IEA Clean Coal Centre - UK
- Petron Corporation, Philippines
- New Zealand Coal & Carbon
- CIMB Investment Bank - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Vizag Seaport Private Limited - India
- Ministry of Transport, Egypt
- Star Paper Mills Limited - India
- Semirara Mining and Power Corporation, Philippines
- Interocean Group of Companies - India
- Cigading International Bulk Terminal - Indonesia
- Sical Logistics Limited - India
- Straits Asia Resources Limited - Singapore
- The University of Queensland
- Madhucon Powers Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- European Bulk Services B.V. - Netherlands
- Indo Tambangraya Megah - Indonesia
- Electricity Generating Authority of Thailand
- Siam City Cement PLC, Thailand
- Karaikal Port Pvt Ltd - India
- Bhatia International Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coastal Gujarat Power Limited - India
- Antam Resourcindo - Indonesia
- Minerals Council of Australia
- Bukit Asam (Persero) Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Romanian Commodities Exchange
- Sarangani Energy Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Altura Mining Limited, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kapuas Tunggal Persada - Indonesia
- Riau Bara Harum - Indonesia
- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- Jaiprakash Power Ventures ltd
- Medco Energi Mining Internasional
- GAC Shipping (India) Pvt Ltd
- Posco Energy - South Korea
- Malabar Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Singapore Mercantile Exchange
- Parliament of New Zealand
- Manunggal Multi Energi - Indonesia
- Orica Mining Services - Indonesia
- Intertek Mineral Services - Indonesia
- Baramulti Group, Indonesia
- Aditya Birla Group - India
- Parry Sugars Refinery, India
- Renaissance Capital - South Africa
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
- White Energy Company Limited
- Kohat Cement Company Ltd. - Pakistan
- Australian Commodity Traders Exchange
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- Wood Mackenzie - Singapore
- Miang Besar Coal Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Sojitz Corporation - Japan
- OPG Power Generation Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- GVK Power & Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Maheswari Brothers Coal Limited - India
- Borneo Indobara - Indonesia
- Formosa Plastics Group - Taiwan
- Bukit Makmur.PT - Indonesia
- Mercator Lines Limited - India
- CNBM International Corporation - China
- Leighton Contractors Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- Oldendorff Carriers - Singapore
- Tata Chemicals Ltd - India
- Planning Commission, India
- San Jose City I Power Corp, Philippines
- Energy Development Corp, Philippines
- Videocon Industries ltd - India
- Central Java Power - Indonesia
- Meralco Power Generation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- SMC Global Power, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Thiess Contractors Indonesia
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