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