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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, 16 July 19
SUPRAMAX: THE ASIAN ARENA WAS SPLIT, WITH A BUILD-UP OF TONNAGE AND LACK OF ENQUIRY IN THE NORTH - BALTIC BRIEFING
Capesize
It was a Brazilian affair with a strong splash of bunkers characterising the Capesize market over the past week. Largely traded in Eur ...
Wednesday, 10 July 19
KOREA SOUTH-EAST POWER INVITES BIDS FOR HCV AND LCV COAL FOR AUGUST 2019 LOADING
COALspot.com: South Korea’s Korea South-East Power Co., Ltd. (KOEN) has issued an international tender for total 460,000 to 500,000 Metric To ...
Wednesday, 10 July 19
SHIPPING MARKET INSIGHT - INTERMODAL
In contrast with the general expectations for the dry bulk market, the sector was not positive or even stable during the past 6 months. The warning ...
Monday, 08 July 19
INDONESIAN COAL PRICE REFERENCE POSTS BIGGEST MONTHLY LOSS SINCE JANUARY 2017
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
Monday, 08 July 19
ULTRAMAX: A 52,000-TONNER OPEN CJK FIXED FOR A TRIP VIA INDONESIA WITH RE-DELIVERY CHINA AT $6,100 - BALTIC BRIEFING
Capesize
The Capesize market surged over the past week, reaching highs not seen since August last year. Widespread activity in both basins saw ...
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- Attock Cement Pakistan Limited
- Romanian Commodities Exchange
- South Luzon Thermal Energy Corporation
- Energy Link Ltd, New Zealand
- Coastal Gujarat Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- PTC India Limited - India
- Uttam Galva Steels Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Borneo Indobara - Indonesia
- Africa Commodities Group - South Africa
- Sakthi Sugars Limited - India
- Thiess Contractors Indonesia
- Singapore Mercantile Exchange
- GMR Energy Limited - India
- Minerals Council of Australia
- The University of Queensland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Electricity Authority - India
- Kideco Jaya Agung - Indonesia
- Gujarat Electricity Regulatory Commission - India
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- Coal and Oil Company - UAE
- Chettinad Cement Corporation Ltd - India
- Sojitz Corporation - Japan
- Electricity Authority, New Zealand
- Interocean Group of Companies - India
- Carbofer General Trading SA - India
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bayan Resources Tbk. - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- The Treasury - Australian Government
- Samtan Co., Ltd - South Korea
- Manunggal Multi Energi - Indonesia
- Orica Australia Pty. Ltd.
- Pipit Mutiara Jaya. PT, Indonesia
- McConnell Dowell - Australia
- Ministry of Mines - Canada
- Global Business Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Ambuja Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Wilmar Investment Holdings
- LBH Netherlands Bv - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Goldman Sachs - Singapore
- Iligan Light & Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Latin American Coal - Colombia
- Trasteel International SA, Italy
- Posco Energy - South Korea
- Kepco SPC Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Lanco Infratech Ltd - India
- Mjunction Services Limited - India
- The State Trading Corporation of India Ltd
- Energy Development Corp, Philippines
- Therma Luzon, Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Ministry of Finance - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- International Coal Ventures Pvt Ltd - India
- Eastern Coal Council - USA
- Toyota Tsusho Corporation, Japan
- Aboitiz Power Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Ind-Barath Power Infra Limited - India
- Mintek Dendrill Indonesia
- Port Waratah Coal Services - Australia
- GAC Shipping (India) Pvt Ltd
- Binh Thuan Hamico - Vietnam
- Maheswari Brothers Coal Limited - India
- Commonwealth Bank - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhatia International Limited - India
- Directorate Of Revenue Intelligence - India
- Sarangani Energy Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Semirara Mining and Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Siam City Cement PLC, Thailand
- White Energy Company Limited
- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- TeaM Sual Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Chamber of Mines of South Africa
- VISA Power Limited - India
- Sindya Power Generating Company Private Ltd
- Banpu Public Company Limited - Thailand
- Bukit Makmur.PT - Indonesia
- Bharathi Cement Corporation - India
- Intertek Mineral Services - Indonesia
- Vizag Seaport Private Limited - India
- Parry Sugars Refinery, India
- Bhushan Steel Limited - India
- AsiaOL BioFuels Corp., Philippines
- GN Power Mariveles Coal Plant, Philippines
- Sinarmas Energy and Mining - Indonesia
- Xindia Steels Limited - India
- San Jose City I Power Corp, Philippines
- ICICI Bank Limited - India
- Heidelberg Cement - Germany
- Altura Mining Limited, Indonesia
- Savvy Resources Ltd - HongKong
- Riau Bara Harum - Indonesia
- Mercuria Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- India Bulls Power Limited - India
- Gujarat Sidhee Cement - India
- Larsen & Toubro Limited - India
- Meenaskhi Energy Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Sree Jayajothi Cements Limited - India
- Standard Chartered Bank - UAE
- Maharashtra Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- Star Paper Mills Limited - India
- Bulk Trading Sa - Switzerland
- PNOC Exploration Corporation - Philippines
- Medco Energi Mining Internasional
- IHS Mccloskey Coal Group - USA
- Indo Tambangraya Megah - Indonesia
- Merrill Lynch Commodities Europe
- Madhucon Powers Ltd - India
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- New Zealand Coal & Carbon
- Bukit Baiduri Energy - Indonesia
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
- Mercator Lines Limited - India
- Alfred C Toepfer International GmbH - Germany
- Jaiprakash Power Ventures ltd
- TNB Fuel Sdn Bhd - Malaysia
- Pendopo Energi Batubara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Antam Resourcindo - Indonesia
- Marubeni Corporation - India
- Eastern Energy - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Malabar Cements Ltd - India
- Makarim & Taira - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Indogreen Group - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Indian Energy Exchange, India
- Meralco Power Generation, Philippines
- Billiton Holdings Pty Ltd - Australia
- ASAPP Information Group - India
- Rio Tinto Coal - Australia
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- Oldendorff Carriers - Singapore
- Aditya Birla Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Kartika Selabumi Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Anglo American - United Kingdom
- Edison Trading Spa - Italy
- GVK Power & Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Indika Energy - Indonesia
- Petron Corporation, Philippines
- Orica Mining Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Dalmia Cement Bharat India
- Baramulti Group, Indonesia
- Thai Mozambique Logistica
- Gujarat Mineral Development Corp Ltd - India
- Jindal Steel & Power Ltd - India
- CIMB Investment Bank - Malaysia
- Power Finance Corporation Ltd., India
- Agrawal Coal Company - India
- MS Steel International - UAE
- Grasim Industreis Ltd - India
- Barasentosa Lestari - Indonesia
- Globalindo Alam Lestari - Indonesia
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- Salva Resources Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Indian Oil Corporation Limited
- Cement Manufacturers Association - India
- Krishnapatnam Port Company Ltd. - India
- Global Coal Blending Company Limited - Australia
- OPG Power Generation Pvt Ltd - India
- Planning Commission, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- Deloitte Consulting - India
- Renaissance Capital - South Africa
- PowerSource Philippines DevCo
- Tamil Nadu electricity Board
- Australian Coal Association
- Parliament of New Zealand
- Essar Steel Hazira Ltd - India
- SMG Consultants - Indonesia
- Electricity Generating Authority of Thailand
- Ministry of Transport, Egypt
- Bangladesh Power Developement Board
- Economic Council, Georgia
- Sical Logistics Limited - India
- Vedanta Resources Plc - India
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