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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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Thursday, 16 May 19
SUPRAMAX: INDO/CHINA COAL RV TRADING AROUND US$ 9,000 BSS S.CHINA DELIVERY - FEARNLEYS
Capesize
This volatile segment is trying to find a clear direction from the present US$ 12,000/day earnings for standard units says Fearnleys W ...
Wednesday, 15 May 19
SHIPPING MARKET INSIGHT - THEODORE NTALAKOS
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As of May 1st, the U.S. has ended waivers to the sanctions that had allowed the top buyers of Irani ...
Monday, 13 May 19
INDONESIAN COAL PRICE REFERENCE CONTINUES TO FALL
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Monday, 13 May 19
SUPRAMAX: SOUTHEAST ASIA THE MARKET SAW BETTER DEMAND - BALTIC BRIEFING
Cape
The market continued its rollercoaster ride last week opening with negative sentiment, but turning around in dramatic fashion by the week& ...
Thursday, 09 May 19
DEEP OFFSHORE SOUTHEAST ASIA CONGRESS 2019
Deep Offshore Southeast Asia Congress 2019
Event Date:2-3th July. 2019t
Location: Jakarta, Indonesia
Sarawak Shell Berhad (S ...
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- Port Waratah Coal Services - Australia
- Bhatia International Limited - India
- Price Waterhouse Coopers - Russia
- Commonwealth Bank - Australia
- Maheswari Brothers Coal Limited - India
- Indogreen Group - Indonesia
- Central Java Power - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Aboitiz Power Corporation - Philippines
- Attock Cement Pakistan Limited
- Central Electricity Authority - India
- Ministry of Finance - Indonesia
- Mjunction Services Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jindal Steel & Power Ltd - India
- Coastal Gujarat Power Limited - India
- Latin American Coal - Colombia
- Manunggal Multi Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Baramulti Group, Indonesia
- CIMB Investment Bank - Malaysia
- Minerals Council of Australia
- Power Finance Corporation Ltd., India
- Iligan Light & Power Inc, Philippines
- PTC India Limited - India
- Orica Australia Pty. Ltd.
- Energy Development Corp, Philippines
- Formosa Plastics Group - Taiwan
- Larsen & Toubro Limited - India
- Mercuria Energy - Indonesia
- Eastern Coal Council - USA
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- Sical Logistics Limited - India
- Kepco SPC Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Rio Tinto Coal - Australia
- Goldman Sachs - Singapore
- Indo Tambangraya Megah - Indonesia
- Mercator Lines Limited - India
- Simpson Spence & Young - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- White Energy Company Limited
- Kaltim Prima Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Transport, Egypt
- Heidelberg Cement - Germany
- Wood Mackenzie - Singapore
- McConnell Dowell - Australia
- Tata Chemicals Ltd - India
- Indian Oil Corporation Limited
- Singapore Mercantile Exchange
- Kalimantan Lumbung Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Edison Trading Spa - Italy
- Leighton Contractors Pty Ltd - Australia
- Parry Sugars Refinery, India
- The State Trading Corporation of India Ltd
- Madhucon Powers Ltd - India
- PNOC Exploration Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Georgia Ports Authority, United States
- Essar Steel Hazira Ltd - India
- Indian Energy Exchange, India
- Sojitz Corporation - Japan
- The University of Queensland
- OPG Power Generation Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Directorate Of Revenue Intelligence - India
- Pipit Mutiara Jaya. PT, Indonesia
- New Zealand Coal & Carbon
- TeaM Sual Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- SMC Global Power, Philippines
- Australian Coal Association
- TNB Fuel Sdn Bhd - Malaysia
- Bhoruka Overseas - Indonesia
- The Treasury - Australian Government
- Electricity Generating Authority of Thailand
- Independent Power Producers Association of India
- Kohat Cement Company Ltd. - Pakistan
- Economic Council, Georgia
- Indonesian Coal Mining Association
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- Star Paper Mills Limited - India
- India Bulls Power Limited - India
- PowerSource Philippines DevCo
- PetroVietnam Power Coal Import and Supply Company
- Rashtriya Ispat Nigam Limited - India
- Petron Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Binh Thuan Hamico - Vietnam
- CNBM International Corporation - China
- Miang Besar Coal Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Uttam Galva Steels Limited - India
- Ministry of Mines - Canada
- Energy Link Ltd, New Zealand
- Bulk Trading Sa - Switzerland
- MS Steel International - UAE
- Straits Asia Resources Limited - Singapore
- IEA Clean Coal Centre - UK
- International Coal Ventures Pvt Ltd - India
- VISA Power Limited - India
- Global Coal Blending Company Limited - Australia
- Meenaskhi Energy Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Interocean Group of Companies - India
- Cement Manufacturers Association - India
- Thiess Contractors Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- LBH Netherlands Bv - Netherlands
- Parliament of New Zealand
- Trasteel International SA, Italy
- Banpu Public Company Limited - Thailand
- Chamber of Mines of South Africa
- Indika Energy - Indonesia
- Wilmar Investment Holdings
- Renaissance Capital - South Africa
- SN Aboitiz Power Inc, Philippines
- Makarim & Taira - Indonesia
- Videocon Industries ltd - India
- Gujarat Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Orica Mining Services - Indonesia
- Sindya Power Generating Company Private Ltd
- SMG Consultants - Indonesia
- Bangladesh Power Developement Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GMR Energy Limited - India
- Sree Jayajothi Cements Limited - India
- Aditya Birla Group - India
- Grasim Industreis Ltd - India
- San Jose City I Power Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- GVK Power & Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Medco Energi Mining Internasional
- South Luzon Thermal Energy Corporation
- Siam City Cement PLC, Thailand
- Global Green Power PLC Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Deloitte Consulting - India
- Antam Resourcindo - Indonesia
- IHS Mccloskey Coal Group - USA
- Australian Commodity Traders Exchange
- Kumho Petrochemical, South Korea
- Therma Luzon, Inc, Philippines
- Agrawal Coal Company - India
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Africa Commodities Group - South Africa
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- Savvy Resources Ltd - HongKong
- Jaiprakash Power Ventures ltd
- Globalindo Alam Lestari - Indonesia
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Xindia Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Anglo American - United Kingdom
- Altura Mining Limited, Indonesia
- Timah Investasi Mineral - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Vedanta Resources Plc - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Authority, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Carbofer General Trading SA - India
- Vizag Seaport Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ASAPP Information Group - India
- Ceylon Electricity Board - Sri Lanka
- Malabar Cements Ltd - India
- ICICI Bank Limited - India
- Romanian Commodities Exchange
- Barasentosa Lestari - Indonesia
- Dalmia Cement Bharat India
- Standard Chartered Bank - UAE
- Jorong Barutama Greston.PT - Indonesia
- London Commodity Brokers - England
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Gujarat Sidhee Cement - India
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- Siam City Cement - Thailand
- Bhushan Steel Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining Corp, Philippines
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- Coal and Oil Company - UAE
- Posco Energy - South Korea
- Planning Commission, India
- Samtan Co., Ltd - South Korea
- Coalindo Energy - Indonesia
- Tamil Nadu electricity Board
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