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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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Wednesday, 12 June 19
IMO 2020 - COUNTDOWN TO 1 JANUARY 2020 -HOW WILL THE CHANGES AFFECT REFINING AND SHIPPING? - WOOD MACKENZIE
We know that the IMO’s regulations represent the biggest step change the shipping industry has ever seen and the implications will be felt th ...
Wednesday, 12 June 19
SHIPPING MARKET INSIGHT - INTERMODAL
This year’s tanker S&P activity keeps edging higher compared to the same period in 2018. Year to date we have seen some 143 ships, rangin ...
Tuesday, 11 June 19
INDONESIAN COAL PRICE REFERENCE SET AT $81.48 PER TON IN JUNE, DOWN 15.66 PERCENT YEAR-ON-YEAR
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, 10 June 19
CONSECUTIVE OWNERS OF CARGO: WHO HOLDS TITLE AND THE RIGHT TO SUE? - COLIN BIGGERS & PAISLEY
KNOWLEDGE TO ELEVATE
In Tritton Resources Pty Ltd v Ever Rock Navigation S.A. [2019] FCA 276, the Federal Court considered the application of ...
Monday, 10 June 19
KOSPO INVITES BIDS FOR 1,305,000 MT OF MIN 5600 KCAL/KG NCV COAL FOR SEPT 2019 TO DEC 2021
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 435,000 MT (per year) of max 5,600 kcal/kg N ...
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- Coal and Oil Company - UAE
- Ambuja Cements Ltd - India
- Commonwealth Bank - Australia
- Straits Asia Resources Limited - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Vijayanagar Sugar Pvt Ltd - India
- McConnell Dowell - Australia
- Ceylon Electricity Board - Sri Lanka
- The University of Queensland
- Kapuas Tunggal Persada - Indonesia
- Merrill Lynch Commodities Europe
- Georgia Ports Authority, United States
- Carbofer General Trading SA - India
- Dalmia Cement Bharat India
- MS Steel International - UAE
- Gujarat Sidhee Cement - India
- Indian Energy Exchange, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Sical Logistics Limited - India
- Coalindo Energy - Indonesia
- Power Finance Corporation Ltd., India
- Posco Energy - South Korea
- Pendopo Energi Batubara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- PTC India Limited - India
- Karaikal Port Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Indogreen Group - Indonesia
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- OPG Power Generation Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Petrochimia International Co. Ltd.- Taiwan
- International Coal Ventures Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Indika Energy - Indonesia
- Global Business Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Finance - Indonesia
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Oldendorff Carriers - Singapore
- Mintek Dendrill Indonesia
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- Sojitz Corporation - Japan
- IEA Clean Coal Centre - UK
- Kalimantan Lumbung Energi - Indonesia
- Deloitte Consulting - India
- Agrawal Coal Company - India
- Krishnapatnam Port Company Ltd. - India
- Bukit Asam (Persero) Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- The Treasury - Australian Government
- Coastal Gujarat Power Limited - India
- Aboitiz Power Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Vedanta Resources Plc - India
- San Jose City I Power Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Jindal Steel & Power Ltd - India
- Vizag Seaport Private Limited - India
- Electricity Authority, New Zealand
- GVK Power & Infra Limited - India
- Bhoruka Overseas - Indonesia
- Maheswari Brothers Coal Limited - India
- Rashtriya Ispat Nigam Limited - India
- Anglo American - United Kingdom
- Intertek Mineral Services - Indonesia
- Semirara Mining Corp, Philippines
- Makarim & Taira - Indonesia
- Sindya Power Generating Company Private Ltd
- Lanco Infratech Ltd - India
- Parliament of New Zealand
- Kaltim Prima Coal - Indonesia
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- Indo Tambangraya Megah - Indonesia
- Global Coal Blending Company Limited - Australia
- Baramulti Group, Indonesia
- ASAPP Information Group - India
- Manunggal Multi Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Planning Commission, India
- LBH Netherlands Bv - Netherlands
- White Energy Company Limited
- Samtan Co., Ltd - South Korea
- Medco Energi Mining Internasional
- Sree Jayajothi Cements Limited - India
- ICICI Bank Limited - India
- Electricity Generating Authority of Thailand
- Globalindo Alam Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- Latin American Coal - Colombia
- Africa Commodities Group - South Africa
- Semirara Mining and Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CIMB Investment Bank - Malaysia
- Simpson Spence & Young - Indonesia
- Bayan Resources Tbk. - Indonesia
- IHS Mccloskey Coal Group - USA
- PowerSource Philippines DevCo
- Tamil Nadu electricity Board
- Price Waterhouse Coopers - Russia
- Standard Chartered Bank - UAE
- Petron Corporation, Philippines
- Heidelberg Cement - Germany
- Australian Coal Association
- Directorate General of MIneral and Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Australian Commodity Traders Exchange
- Madhucon Powers Ltd - India
- Rio Tinto Coal - Australia
- South Luzon Thermal Energy Corporation
- GMR Energy Limited - India
- Binh Thuan Hamico - Vietnam
- The State Trading Corporation of India Ltd
- Cement Manufacturers Association - India
- Energy Development Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Iligan Light & Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Bhatia International Limited - India
- Attock Cement Pakistan Limited
- Meenaskhi Energy Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aditya Birla Group - India
- Chamber of Mines of South Africa
- Eastern Energy - Thailand
- Central Electricity Authority - India
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Mines - Canada
- Formosa Plastics Group - Taiwan
- Tata Chemicals Ltd - India
- Sarangani Energy Corporation, Philippines
- Wilmar Investment Holdings
- Kobexindo Tractors - Indoneisa
- Mercator Lines Limited - India
- VISA Power Limited - India
- Bangladesh Power Developement Board
- Siam City Cement - Thailand
- Larsen & Toubro Limited - India
- Edison Trading Spa - Italy
- Banpu Public Company Limited - Thailand
- Star Paper Mills Limited - India
- TeaM Sual Corporation - Philippines
- Videocon Industries ltd - India
- Economic Council, Georgia
- Kartika Selabumi Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GAC Shipping (India) Pvt Ltd
- Bukit Baiduri Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Thiess Contractors Indonesia
- Essar Steel Hazira Ltd - India
- Thai Mozambique Logistica
- Parry Sugars Refinery, India
- Bhushan Steel Limited - India
- Port Waratah Coal Services - Australia
- Independent Power Producers Association of India
- SMC Global Power, Philippines
- Borneo Indobara - Indonesia
- Sakthi Sugars Limited - India
- Jaiprakash Power Ventures ltd
- Sinarmas Energy and Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Romanian Commodities Exchange
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Mjunction Services Limited - India
- Bulk Trading Sa - Switzerland
- Orica Mining Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Meralco Power Generation, Philippines
- Interocean Group of Companies - India
- India Bulls Power Limited - India
- CNBM International Corporation - China
- Riau Bara Harum - Indonesia
- Ministry of Transport, Egypt
- Directorate Of Revenue Intelligence - India
- Singapore Mercantile Exchange
- New Zealand Coal & Carbon
- Indian Oil Corporation Limited
- Barasentosa Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Indonesian Coal Mining Association
- Trasteel International SA, Italy
- Uttam Galva Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Minerals Council of Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Xindia Steels Limited - India
- Renaissance Capital - South Africa
- Alfred C Toepfer International GmbH - Germany
- Timah Investasi Mineral - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Altura Mining Limited, Indonesia
- Salva Resources Pvt Ltd - India
- Central Java Power - Indonesia
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Kideco Jaya Agung - Indonesia
- Goldman Sachs - Singapore
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