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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, 09 September 19
ULTRAMAX: ASIA A 58,000-TONNER FIXED DELIVERY FUZHOU, VIA INDONESIA, REDELIVERY CHINA, AT $12,800
Capesize
0px The market reached new heights this week as the 5TC topped $38,014, a level not seen in the sector since 2013. Fridays 5TC closed ...
Wednesday, 04 September 19
SHIPPING MARKET INSIGHT - INTERMODAL
For yet another time, the market seems to have its own drivers. After a very disappointing first half, the recent recovery in the shipping market i ...
Tuesday, 20 August 19
NORDEN HAS BEEN AWARDED A 3-YEAR CONTRACT FOR THE TRANSPORTATION OF COAL FROM INDONESIA TO HONG KONG
NORDEN has been awarded a 3-year contract with a power company in Hong Kong for the transportation of coal from Indonesia to Hong Kong.
...
Tuesday, 20 August 19
THE AUGUST 2019 INDONESIAN COAL PRICE REFERENCE POSTS THE FIRST MONTHLY GAIN SINCE AUGUST 2018
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised up the benchmark price of Indonesian thermal co ...
Monday, 19 August 19
INDONESIAN COAL RUNS, A 82,000DWT SHIP WAS FIXED DELIVERY CHINA VIA INDONESIA, REDELIVERY JAPAN, IN THE MID $16,000S - BALTIC BRIEFING
Capesize
The Capesize market was buoyant in both basins this week, posting gains across the board. After bottoming out the previous week, rates ...
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- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- Australian Commodity Traders Exchange
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- Metalloyd Limited - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Bhushan Steel Limited - India
- Alfred C Toepfer International GmbH - Germany
- Essar Steel Hazira Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Bukit Asam (Persero) Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Marubeni Corporation - India
- Gujarat Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Vedanta Resources Plc - India
- Simpson Spence & Young - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Australian Coal Association
- Thiess Contractors Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Indonesian Coal Mining Association
- Meenaskhi Energy Private Limited - India
- LBH Netherlands Bv - Netherlands
- Energy Development Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indo Tambangraya Megah - Indonesia
- Planning Commission, India
- Petrochimia International Co. Ltd.- Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Singapore Mercantile Exchange
- Parliament of New Zealand
- SMG Consultants - Indonesia
- Makarim & Taira - Indonesia
- Kepco SPC Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Vijayanagar Sugar Pvt Ltd - India
- Star Paper Mills Limited - India
- Coalindo Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Formosa Plastics Group - Taiwan
- Port Waratah Coal Services - Australia
- Directorate General of MIneral and Coal - Indonesia
- Parry Sugars Refinery, India
- Coastal Gujarat Power Limited - India
- Edison Trading Spa - Italy
- Sree Jayajothi Cements Limited - India
- AsiaOL BioFuels Corp., Philippines
- Deloitte Consulting - India
- Billiton Holdings Pty Ltd - Australia
- Renaissance Capital - South Africa
- SN Aboitiz Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Karaikal Port Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Manunggal Multi Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Oldendorff Carriers - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Grasim Industreis Ltd - India
- Global Green Power PLC Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- India Bulls Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Anglo American - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Economic Council, Georgia
- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Standard Chartered Bank - UAE
- Bukit Baiduri Energy - Indonesia
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Medco Energi Mining Internasional
- Central Java Power - Indonesia
- Pendopo Energi Batubara - Indonesia
- Eastern Coal Council - USA
- Asmin Koalindo Tuhup - Indonesia
- Salva Resources Pvt Ltd - India
- GVK Power & Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- McConnell Dowell - Australia
- Borneo Indobara - Indonesia
- Power Finance Corporation Ltd., India
- MS Steel International - UAE
- Therma Luzon, Inc, Philippines
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- Banpu Public Company Limited - Thailand
- Bayan Resources Tbk. - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mjunction Services Limited - India
- Independent Power Producers Association of India
- Eastern Energy - Thailand
- Indian Oil Corporation Limited
- Orica Australia Pty. Ltd.
- Meralco Power Generation, Philippines
- Siam City Cement - Thailand
- Kideco Jaya Agung - Indonesia
- The University of Queensland
- Kumho Petrochemical, South Korea
- Africa Commodities Group - South Africa
- Jindal Steel & Power Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Bharathi Cement Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Sojitz Corporation - Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Malabar Cements Ltd - India
- The State Trading Corporation of India Ltd
- Mintek Dendrill Indonesia
- Ministry of Transport, Egypt
- Indika Energy - Indonesia
- Georgia Ports Authority, United States
- Bhoruka Overseas - Indonesia
- TeaM Sual Corporation - Philippines
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- Interocean Group of Companies - India
- The Treasury - Australian Government
- Posco Energy - South Korea
- Chettinad Cement Corporation Ltd - India
- Attock Cement Pakistan Limited
- Energy Link Ltd, New Zealand
- GMR Energy Limited - India
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- Bhatia International Limited - India
- Siam City Cement PLC, Thailand
- Binh Thuan Hamico - Vietnam
- Agrawal Coal Company - India
- CNBM International Corporation - China
- Minerals Council of Australia
- Orica Mining Services - Indonesia
- Trasteel International SA, Italy
- OPG Power Generation Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- Kohat Cement Company Ltd. - Pakistan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sarangani Energy Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Sical Logistics Limited - India
- London Commodity Brokers - England
- Baramulti Group, Indonesia
- Jaiprakash Power Ventures ltd
- GAC Shipping (India) Pvt Ltd
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- Romanian Commodities Exchange
- Kobexindo Tractors - Indoneisa
- Aboitiz Power Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Global Business Power Corporation, Philippines
- Ambuja Cements Ltd - India
- New Zealand Coal & Carbon
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining Corp, Philippines
- Antam Resourcindo - Indonesia
- Bulk Trading Sa - Switzerland
- Commonwealth Bank - Australia
- Price Waterhouse Coopers - Russia
- Straits Asia Resources Limited - Singapore
- Leighton Contractors Pty Ltd - Australia
- Lanco Infratech Ltd - India
- Indian Energy Exchange, India
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Cement Manufacturers Association - India
- ASAPP Information Group - India
- Tata Chemicals Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Tamil Nadu electricity Board
- IHS Mccloskey Coal Group - USA
- Uttam Galva Steels Limited - India
- Madhucon Powers Ltd - India
- Kapuas Tunggal Persada - Indonesia
- European Bulk Services B.V. - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Larsen & Toubro Limited - India
- Thai Mozambique Logistica
- Electricity Authority, New Zealand
- Petron Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vizag Seaport Private Limited - India
- Latin American Coal - Colombia
- Sakthi Sugars Limited - India
- Electricity Generating Authority of Thailand
- SMC Global Power, Philippines
- Directorate Of Revenue Intelligence - India
- ICICI Bank Limited - India
- Ministry of Mines - Canada
- Wood Mackenzie - Singapore
- Mercator Lines Limited - India
- Rio Tinto Coal - Australia
- Barasentosa Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- VISA Power Limited - India
- Riau Bara Harum - Indonesia
- Toyota Tsusho Corporation, Japan
- Dalmia Cement Bharat India
- Wilmar Investment Holdings
- Sinarmas Energy and Mining - Indonesia
- Aditya Birla Group - India
- Xindia Steels Limited - India
- South Luzon Thermal Energy Corporation
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