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