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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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Monday, 11 March 19
SUPRAMAX: A 61,000 DWT VESSEL WAS BOOKED SINGAPORE FOR A TRIP VIA INDONESIA TO CHINA AT $10,500 - BALTIC BRIEFING
Capesize
A faint glimmer of hope with the suggestion the market may have finally bottomed out, with owners attempting to resist further cuts in ...
Friday, 08 March 19
KOMIPO INVITES BIDS FOR 2.6 MILLION TONS OF AUSTRALIAN 5700 NAR COAL FOR FIVE YEARS
South Korea state-owned utility Korea Midland Power (KOMIPO) issued a tender for 520,000 MT of min. 5700 NAR coal of Australian origin to be burnt ...
Friday, 08 March 19
CHINA'S COAL DEMAND FORECAST TO DROP SLOWLY - YONHAP
China’s coal demand is expected to fall at a snail’s pace over the next 20 years due to the country’s preference for the cheap fo ...
Thursday, 07 March 19
INDONESIAN COAL PRICE REFERENCE PLUNGE TO LOWEST IN SEVEN MONTHS
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Wednesday, 06 March 19
KOSPO INVITES BIDS FOR 80,000 MT OF 3800 NCV COAL FOR 21 - 30 MARCH, 2019 LOADING
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 80,000 MT of min 3,800 kcal/kg NCV low calor ...
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- San Jose City I Power Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Bhushan Steel Limited - India
- Indika Energy - Indonesia
- SMC Global Power, Philippines
- Renaissance Capital - South Africa
- Semirara Mining Corp, Philippines
- Energy Link Ltd, New Zealand
- SN Aboitiz Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Bukit Baiduri Energy - Indonesia
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- Salva Resources Pvt Ltd - India
- Australian Coal Association
- PetroVietnam Power Coal Import and Supply Company
- India Bulls Power Limited - India
- Africa Commodities Group - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- McConnell Dowell - Australia
- Wood Mackenzie - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Videocon Industries ltd - India
- Baramulti Group, Indonesia
- IHS Mccloskey Coal Group - USA
- Wilmar Investment Holdings
- Goldman Sachs - Singapore
- Bukit Makmur.PT - Indonesia
- Indonesian Coal Mining Association
- Maheswari Brothers Coal Limited - India
- Mjunction Services Limited - India
- Posco Energy - South Korea
- Romanian Commodities Exchange
- Medco Energi Mining Internasional
- Larsen & Toubro Limited - India
- Essar Steel Hazira Ltd - India
- Singapore Mercantile Exchange
- The State Trading Corporation of India Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Rashtriya Ispat Nigam Limited - India
- International Coal Ventures Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Star Paper Mills Limited - India
- Aditya Birla Group - India
- Antam Resourcindo - Indonesia
- London Commodity Brokers - England
- Vijayanagar Sugar Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhoruka Overseas - Indonesia
- Bharathi Cement Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Marubeni Corporation - India
- Jindal Steel & Power Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- PowerSource Philippines DevCo
- Parliament of New Zealand
- Economic Council, Georgia
- Aboitiz Power Corporation - Philippines
- Ministry of Finance - Indonesia
- PNOC Exploration Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Jaiprakash Power Ventures ltd
- VISA Power Limited - India
- Grasim Industreis Ltd - India
- Ministry of Mines - Canada
- Billiton Holdings Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- Coastal Gujarat Power Limited - India
- Bhatia International Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- Minerals Council of Australia
- Meenaskhi Energy Private Limited - India
- GMR Energy Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Mercator Lines Limited - India
- Sindya Power Generating Company Private Ltd
- Directorate Of Revenue Intelligence - India
- LBH Netherlands Bv - Netherlands
- Sojitz Corporation - Japan
- Vizag Seaport Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Malabar Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Bangladesh Power Developement Board
- Orica Mining Services - Indonesia
- White Energy Company Limited
- European Bulk Services B.V. - Netherlands
- Central Java Power - Indonesia
- Sical Logistics Limited - India
- Kartika Selabumi Mining - Indonesia
- Uttam Galva Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Banpu Public Company Limited - Thailand
- Carbofer General Trading SA - India
- Latin American Coal - Colombia
- AsiaOL BioFuels Corp., Philippines
- Alfred C Toepfer International GmbH - Germany
- Jorong Barutama Greston.PT - Indonesia
- Interocean Group of Companies - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meralco Power Generation, Philippines
- PTC India Limited - India
- Ministry of Transport, Egypt
- Energy Development Corp, Philippines
- Attock Cement Pakistan Limited
- Makarim & Taira - Indonesia
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Australian Commodity Traders Exchange
- Commonwealth Bank - Australia
- Trasteel International SA, Italy
- Anglo American - United Kingdom
- Petron Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thiess Contractors Indonesia
- Bayan Resources Tbk. - Indonesia
- Cement Manufacturers Association - India
- Indogreen Group - Indonesia
- Electricity Generating Authority of Thailand
- Timah Investasi Mineral - Indoneisa
- Intertek Mineral Services - Indonesia
- New Zealand Coal & Carbon
- Planning Commission, India
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
- IEA Clean Coal Centre - UK
- Globalindo Alam Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- TeaM Sual Corporation - Philippines
- Tata Chemicals Ltd - India
- Oldendorff Carriers - Singapore
- Indian Oil Corporation Limited
- Kumho Petrochemical, South Korea
- Vedanta Resources Plc - India
- Merrill Lynch Commodities Europe
- Bulk Trading Sa - Switzerland
- Lanco Infratech Ltd - India
- Dalmia Cement Bharat India
- Asmin Koalindo Tuhup - Indonesia
- Pendopo Energi Batubara - Indonesia
- Eastern Coal Council - USA
- Toyota Tsusho Corporation, Japan
- The University of Queensland
- Orica Australia Pty. Ltd.
- Central Electricity Authority - India
- Ambuja Cements Ltd - India
- ICICI Bank Limited - India
- Indian Energy Exchange, India
- MS Steel International - UAE
- Mercuria Energy - Indonesia
- Agrawal Coal Company - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maharashtra Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Thai Mozambique Logistica
- Kohat Cement Company Ltd. - Pakistan
- Eastern Energy - Thailand
- Madhucon Powers Ltd - India
- Barasentosa Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Edison Trading Spa - Italy
- Borneo Indobara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Deloitte Consulting - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mintek Dendrill Indonesia
- Simpson Spence & Young - Indonesia
- Therma Luzon, Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement - Thailand
- CNBM International Corporation - China
- Sree Jayajothi Cements Limited - India
- Rio Tinto Coal - Australia
- Leighton Contractors Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Xindia Steels Limited - India
- The Treasury - Australian Government
- Coal and Oil Company - UAE
- Power Finance Corporation Ltd., India
- South Luzon Thermal Energy Corporation
- Neyveli Lignite Corporation Ltd, - India
- Global Business Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Altura Mining Limited, Indonesia
- Sarangani Energy Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Manunggal Multi Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Samtan Co., Ltd - South Korea
- Parry Sugars Refinery, India
- Kapuas Tunggal Persada - Indonesia
- Independent Power Producers Association of India
- GAC Shipping (India) Pvt Ltd
- Georgia Ports Authority, United States
- Heidelberg Cement - Germany
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