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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, 21 March 19
PRICE PLUNGE AS CHINESE LEAVE THERMAL COAL OUT IN THE COLD - AUSTRALIAN FINANCIAL REVIEW
Thermal coal exporter New Hope Corporation says China’s shipment squeeze on Australia is putting downward pressure on prices in all markets i ...
Wednesday, 20 March 19
COAL EXPORT FEARS RESURFACE AS RESTRICTIONS HIT MORE CHINESE PORTS AND AUSTRALIAN PRICES COP A 'BELTING' - ABC
Australian thermal coal exports to China are under increasing pressure, with indications import restrictions are spreading to other key ports.
...
Monday, 18 March 19
A 56,000DWT SHIP FIXED DELIVERY FOR A SINGAPORE TRIP VIA INDONESIA, RE-DELIVERY CHINA, AT $10,000 - BALTIC BRIEFING
Capesize
The Baltic Capesize market shrugged off its recent negative sentiment to post daily incremental improvements over the last week. Pacif ...
Saturday, 16 March 19
AUSTRALIAN COAL STILL FACING CHINESE DELAY - AAP
Australian coal exports to China are still facing delays, with protectionism and environmental checks blamed for the slowdown.
Coal ...
Thursday, 14 March 19
SUPRAMAX: INDO COAL CARGOES GETTING FIXED AT AROUND US$ 12000 TO CHINA - FEARNLEYS
Capesize
Average daily earning still well below operating costs, and owners keep bleeding - but nevertheless finally some bright spots for the ...
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- Grasim Industreis Ltd - India
- Kartika Selabumi Mining - Indonesia
- Madhucon Powers Ltd - India
- PowerSource Philippines DevCo
- Jaiprakash Power Ventures ltd
- SMG Consultants - Indonesia
- GMR Energy Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Parliament of New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Lanco Infratech Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- India Bulls Power Limited - India
- Power Finance Corporation Ltd., India
- Rashtriya Ispat Nigam Limited - India
- Ministry of Mines - Canada
- Siam City Cement - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Ind-Barath Power Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- London Commodity Brokers - England
- Global Green Power PLC Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Mercator Lines Limited - India
- Eastern Coal Council - USA
- Indo Tambangraya Megah - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sakthi Sugars Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Tamil Nadu electricity Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- Economic Council, Georgia
- Commonwealth Bank - Australia
- Energy Link Ltd, New Zealand
- Vizag Seaport Private Limited - India
- Metalloyd Limited - United Kingdom
- Indika Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- The Treasury - Australian Government
- GN Power Mariveles Coal Plant, Philippines
- Bulk Trading Sa - Switzerland
- Videocon Industries ltd - India
- PTC India Limited - India
- Intertek Mineral Services - Indonesia
- Makarim & Taira - Indonesia
- Global Coal Blending Company Limited - Australia
- Singapore Mercantile Exchange
- Leighton Contractors Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- Borneo Indobara - Indonesia
- Bharathi Cement Corporation - India
- Gujarat Sidhee Cement - India
- Mintek Dendrill Indonesia
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- Planning Commission, India
- Malabar Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Oldendorff Carriers - Singapore
- Straits Asia Resources Limited - Singapore
- Miang Besar Coal Terminal - Indonesia
- Heidelberg Cement - Germany
- Wilmar Investment Holdings
- Coal and Oil Company - UAE
- Barasentosa Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Timah Investasi Mineral - Indoneisa
- Agrawal Coal Company - India
- Savvy Resources Ltd - HongKong
- Minerals Council of Australia
- Chamber of Mines of South Africa
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Vedanta Resources Plc - India
- PetroVietnam Power Coal Import and Supply Company
- GVK Power & Infra Limited - India
- Merrill Lynch Commodities Europe
- Electricity Authority, New Zealand
- Mjunction Services Limited - India
- Chettinad Cement Corporation Ltd - India
- Bukit Baiduri Energy - Indonesia
- Ministry of Finance - Indonesia
- Directorate Of Revenue Intelligence - India
- Indian Oil Corporation Limited
- Formosa Plastics Group - Taiwan
- Romanian Commodities Exchange
- Altura Mining Limited, Indonesia
- Deloitte Consulting - India
- CIMB Investment Bank - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Renaissance Capital - South Africa
- Xindia Steels Limited - India
- New Zealand Coal & Carbon
- Kaltim Prima Coal - Indonesia
- Indian Energy Exchange, India
- Ceylon Electricity Board - Sri Lanka
- Energy Development Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Edison Trading Spa - Italy
- The University of Queensland
- Coalindo Energy - Indonesia
- ICICI Bank Limited - India
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meenaskhi Energy Private Limited - India
- McConnell Dowell - Australia
- Thiess Contractors Indonesia
- Global Business Power Corporation, Philippines
- ASAPP Information Group - India
- Essar Steel Hazira Ltd - India
- Sarangani Energy Corporation, Philippines
- Baramulti Group, Indonesia
- Ministry of Transport, Egypt
- Trasteel International SA, Italy
- Mercuria Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bayan Resources Tbk. - Indonesia
- Bukit Makmur.PT - Indonesia
- Uttam Galva Steels Limited - India
- Eastern Energy - Thailand
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- Orica Australia Pty. Ltd.
- Ambuja Cements Ltd - India
- Australian Commodity Traders Exchange
- Sical Logistics Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Georgia Ports Authority, United States
- San Jose City I Power Corp, Philippines
- Petron Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Central Java Power - Indonesia
- Sree Jayajothi Cements Limited - India
- Price Waterhouse Coopers - Russia
- Gujarat Mineral Development Corp Ltd - India
- Meralco Power Generation, Philippines
- Riau Bara Harum - Indonesia
- TeaM Sual Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Port Waratah Coal Services - Australia
- Pendopo Energi Batubara - Indonesia
- Bhushan Steel Limited - India
- Marubeni Corporation - India
- Medco Energi Mining Internasional
- Wood Mackenzie - Singapore
- Alfred C Toepfer International GmbH - Germany
- LBH Netherlands Bv - Netherlands
- Antam Resourcindo - Indonesia
- Coastal Gujarat Power Limited - India
- Banpu Public Company Limited - Thailand
- Billiton Holdings Pty Ltd - Australia
- Posco Energy - South Korea
- Africa Commodities Group - South Africa
- Kepco SPC Power Corporation, Philippines
- Bangladesh Power Developement Board
- Central Electricity Authority - India
- Simpson Spence & Young - Indonesia
- Jindal Steel & Power Ltd - India
- Goldman Sachs - Singapore
- Larsen & Toubro Limited - India
- GAC Shipping (India) Pvt Ltd
- Sojitz Corporation - Japan
- Aditya Birla Group - India
- Australian Coal Association
- Interocean Group of Companies - India
- Kideco Jaya Agung - Indonesia
- Orica Mining Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- IHS Mccloskey Coal Group - USA
- Semirara Mining Corp, Philippines
- Carbofer General Trading SA - India
- Salva Resources Pvt Ltd - India
- Dalmia Cement Bharat India
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- Anglo American - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- SMC Global Power, Philippines
- Standard Chartered Bank - UAE
- Karbindo Abesyapradhi - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PNOC Exploration Corporation - Philippines
- Parry Sugars Refinery, India
- Kohat Cement Company Ltd. - Pakistan
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Krishnapatnam Port Company Ltd. - India
- Independent Power Producers Association of India
- MS Steel International - UAE
- Cigading International Bulk Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- White Energy Company Limited
- CNBM International Corporation - China
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- VISA Power Limited - India
- Latin American Coal - Colombia
- Bukit Asam (Persero) Tbk - Indonesia
- Star Paper Mills Limited - India
- Siam City Cement PLC, Thailand
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
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