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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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- Indogreen Group - Indonesia
- Agrawal Coal Company - India
- Semirara Mining and Power Corporation, Philippines
- Edison Trading Spa - Italy
- Ind-Barath Power Infra Limited - India
- Indian Energy Exchange, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- PowerSource Philippines DevCo
- Carbofer General Trading SA - India
- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sakthi Sugars Limited - India
- Sree Jayajothi Cements Limited - India
- Merrill Lynch Commodities Europe
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- IEA Clean Coal Centre - UK
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Siam City Cement - Thailand
- Tamil Nadu electricity Board
- Riau Bara Harum - Indonesia
- Vedanta Resources Plc - India
- Formosa Plastics Group - Taiwan
- Maharashtra Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Trasteel International SA, Italy
- Kartika Selabumi Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- LBH Netherlands Bv - Netherlands
- Banpu Public Company Limited - Thailand
- India Bulls Power Limited - India
- Orica Mining Services - Indonesia
- Africa Commodities Group - South Africa
- Global Business Power Corporation, Philippines
- Sojitz Corporation - Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Madhucon Powers Ltd - India
- Georgia Ports Authority, United States
- PTC India Limited - India
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
- Australian Commodity Traders Exchange
- Central Java Power - Indonesia
- GMR Energy Limited - India
- TeaM Sual Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- SMC Global Power, Philippines
- Port Waratah Coal Services - Australia
- Savvy Resources Ltd - HongKong
- Marubeni Corporation - India
- Globalindo Alam Lestari - Indonesia
- Electricity Authority, New Zealand
- Oldendorff Carriers - Singapore
- Ministry of Transport, Egypt
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- London Commodity Brokers - England
- Simpson Spence & Young - Indonesia
- Therma Luzon, Inc, Philippines
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- Singapore Mercantile Exchange
- Economic Council, Georgia
- Pipit Mutiara Jaya. PT, Indonesia
- Meralco Power Generation, Philippines
- Malabar Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Sical Logistics Limited - India
- Straits Asia Resources Limited - Singapore
- Thiess Contractors Indonesia
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Gujarat Sidhee Cement - India
- Medco Energi Mining Internasional
- Star Paper Mills Limited - India
- Iligan Light & Power Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Interocean Group of Companies - India
- Sinarmas Energy and Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- SMG Consultants - Indonesia
- Goldman Sachs - Singapore
- Miang Besar Coal Terminal - Indonesia
- Dalmia Cement Bharat India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Manunggal Multi Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- The University of Queensland
- Kapuas Tunggal Persada - Indonesia
- Samtan Co., Ltd - South Korea
- Maheswari Brothers Coal Limited - India
- Anglo American - United Kingdom
- Ministry of Mines - Canada
- OPG Power Generation Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Kaltim Prima Coal - Indonesia
- Energy Development Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- McConnell Dowell - Australia
- Ambuja Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Kideco Jaya Agung - Indonesia
- CNBM International Corporation - China
- Gujarat Mineral Development Corp Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Xindia Steels Limited - India
- The Treasury - Australian Government
- Neyveli Lignite Corporation Ltd, - India
- Commonwealth Bank - Australia
- Indika Energy - Indonesia
- Lanco Infratech Ltd - India
- White Energy Company Limited
- Kumho Petrochemical, South Korea
- Larsen & Toubro Limited - India
- San Jose City I Power Corp, Philippines
- Orica Australia Pty. Ltd.
- Jorong Barutama Greston.PT - Indonesia
- Antam Resourcindo - Indonesia
- Attock Cement Pakistan Limited
- Electricity Generating Authority of Thailand
- Uttam Galva Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Mercator Lines Limited - India
- Parliament of New Zealand
- Chamber of Mines of South Africa
- Semirara Mining Corp, Philippines
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Renaissance Capital - South Africa
- GVK Power & Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Latin American Coal - Colombia
- Baramulti Group, Indonesia
- ASAPP Information Group - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coastal Gujarat Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Australian Coal Association
- Gujarat Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Siam City Cement PLC, Thailand
- Jindal Steel & Power Ltd - India
- Bukit Makmur.PT - Indonesia
- Central Electricity Authority - India
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
- Indo Tambangraya Megah - Indonesia
- MS Steel International - UAE
- PetroVietnam Power Coal Import and Supply Company
- Karbindo Abesyapradhi - Indoneisa
- New Zealand Coal & Carbon
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- Altura Mining Limited, Indonesia
- Jaiprakash Power Ventures ltd
- Holcim Trading Pte Ltd - Singapore
- Grasim Industreis Ltd - India
- International Coal Ventures Pvt Ltd - India
- Rio Tinto Coal - Australia
- Barasentosa Lestari - Indonesia
- Energy Link Ltd, New Zealand
- Eastern Energy - Thailand
- Aboitiz Power Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Standard Chartered Bank - UAE
- Price Waterhouse Coopers - Russia
- Vijayanagar Sugar Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Wood Mackenzie - Singapore
- Heidelberg Cement - Germany
- Kohat Cement Company Ltd. - Pakistan
- Intertek Mineral Services - Indonesia
- Coal and Oil Company - UAE
- Karaikal Port Pvt Ltd - India
- Romanian Commodities Exchange
- Bhatia International Limited - India
- Salva Resources Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Videocon Industries ltd - India
- SN Aboitiz Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Minerals Council of Australia
- Bangladesh Power Developement Board
- Asmin Koalindo Tuhup - Indonesia
- Cement Manufacturers Association - India
- Metalloyd Limited - United Kingdom
- VISA Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Coal Council - USA
- Mintek Dendrill Indonesia
- Indian Oil Corporation Limited
- European Bulk Services B.V. - Netherlands
- Mercuria Energy - Indonesia
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- Wilmar Investment Holdings
- TNB Fuel Sdn Bhd - Malaysia
- Pendopo Energi Batubara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Petron Corporation, Philippines
- Vizag Seaport Private Limited - India
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