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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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Tuesday, 11 December 18
SHIPPING MARKET ANALYSIS - ALLIED
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Tuesday, 11 December 18
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Thursday, 06 December 18
IN THE EAST, BIGGER SUPRA WAS FIXED CA US$ 10K FOR INDO-CHINA COAL ROUND - FEARNLEYS
Capesize
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Thursday, 06 December 18
U.S. COAL CONSUMPTION IN 2018 EXPECTED TO BE THE LOWEST IN 39 YEARS - EIA
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DEMAND RISKS WEIGH ON GLOBAL SHIPPING SECTOR OUTLOOK - FITCH RATINGS
The global shipping sector outlook remains negative reflecting the demand-side risks of protectionism and slower economic growth, Fitch Ratings say ...
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- Mercuria Energy - Indonesia
- Eastern Energy - Thailand
- Riau Bara Harum - Indonesia
- Coalindo Energy - Indonesia
- Petron Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Bhatia International Limited - India
- Thai Mozambique Logistica
- Savvy Resources Ltd - HongKong
- Parliament of New Zealand
- Vizag Seaport Private Limited - India
- IEA Clean Coal Centre - UK
- Indo Tambangraya Megah - Indonesia
- Mjunction Services Limited - India
- Siam City Cement PLC, Thailand
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- The Treasury - Australian Government
- Timah Investasi Mineral - Indoneisa
- Bangladesh Power Developement Board
- PetroVietnam Power Coal Import and Supply Company
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Malabar Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- Chamber of Mines of South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Coal Council - USA
- Minerals Council of Australia
- Mintek Dendrill Indonesia
- London Commodity Brokers - England
- Orica Australia Pty. Ltd.
- Kobexindo Tractors - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Electricity Authority, New Zealand
- CNBM International Corporation - China
- Bhoruka Overseas - Indonesia
- Formosa Plastics Group - Taiwan
- Intertek Mineral Services - Indonesia
- Jaiprakash Power Ventures ltd
- South Luzon Thermal Energy Corporation
- Lanco Infratech Ltd - India
- Oldendorff Carriers - Singapore
- Kohat Cement Company Ltd. - Pakistan
- MS Steel International - UAE
- Meralco Power Generation, Philippines
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- Barasentosa Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Indonesian Coal Mining Association
- ICICI Bank Limited - India
- Sojitz Corporation - Japan
- Sakthi Sugars Limited - India
- SMC Global Power, Philippines
- Aditya Birla Group - India
- Africa Commodities Group - South Africa
- TeaM Sual Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Larsen & Toubro Limited - India
- Rio Tinto Coal - Australia
- Borneo Indobara - Indonesia
- Semirara Mining Corp, Philippines
- Trasteel International SA, Italy
- Posco Energy - South Korea
- Bharathi Cement Corporation - India
- GMR Energy Limited - India
- Global Business Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Indogreen Group - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Java Power - Indonesia
- Ministry of Finance - Indonesia
- PNOC Exploration Corporation - Philippines
- Anglo American - United Kingdom
- Heidelberg Cement - Germany
- AsiaOL BioFuels Corp., Philippines
- Miang Besar Coal Terminal - Indonesia
- Ministry of Transport, Egypt
- Port Waratah Coal Services - Australia
- Planning Commission, India
- Bayan Resources Tbk. - Indonesia
- Kideco Jaya Agung - Indonesia
- McConnell Dowell - Australia
- Rashtriya Ispat Nigam Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Dalmia Cement Bharat India
- Standard Chartered Bank - UAE
- ASAPP Information Group - India
- Coal and Oil Company - UAE
- Merrill Lynch Commodities Europe
- Power Finance Corporation Ltd., India
- Independent Power Producers Association of India
- Australian Coal Association
- Ministry of Mines - Canada
- Asmin Koalindo Tuhup - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Sidhee Cement - India
- Mercator Lines Limited - India
- Toyota Tsusho Corporation, Japan
- Grasim Industreis Ltd - India
- Agrawal Coal Company - India
- Alfred C Toepfer International GmbH - Germany
- Kartika Selabumi Mining - Indonesia
- Cement Manufacturers Association - India
- White Energy Company Limited
- Global Coal Blending Company Limited - Australia
- OPG Power Generation Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
- GAC Shipping (India) Pvt Ltd
- Jindal Steel & Power Ltd - India
- San Jose City I Power Corp, Philippines
- Edison Trading Spa - Italy
- Wood Mackenzie - Singapore
- Pendopo Energi Batubara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indian Energy Exchange, India
- Commonwealth Bank - Australia
- Semirara Mining and Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Neyveli Lignite Corporation Ltd, - India
- Carbofer General Trading SA - India
- Renaissance Capital - South Africa
- Straits Asia Resources Limited - Singapore
- Metalloyd Limited - United Kingdom
- SMG Consultants - Indonesia
- Star Paper Mills Limited - India
- Makarim & Taira - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- International Coal Ventures Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Holcim Trading Pte Ltd - Singapore
- SN Aboitiz Power Inc, Philippines
- Sical Logistics Limited - India
- PTC India Limited - India
- Karaikal Port Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- PowerSource Philippines DevCo
- Sarangani Energy Corporation, Philippines
- Romanian Commodities Exchange
- Xindia Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Vedanta Resources Plc - India
- Kepco SPC Power Corporation, Philippines
- Tamil Nadu electricity Board
- The State Trading Corporation of India Ltd
- Altura Mining Limited, Indonesia
- Attock Cement Pakistan Limited
- European Bulk Services B.V. - Netherlands
- Madhucon Powers Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Georgia Ports Authority, United States
- Bhushan Steel Limited - India
- Energy Link Ltd, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Sinarmas Energy and Mining - Indonesia
- Goldman Sachs - Singapore
- New Zealand Coal & Carbon
- Directorate General of MIneral and Coal - Indonesia
- Deloitte Consulting - India
- CIMB Investment Bank - Malaysia
- Electricity Generating Authority of Thailand
- The University of Queensland
- Latin American Coal - Colombia
- TNB Fuel Sdn Bhd - Malaysia
- Orica Mining Services - Indonesia
- Ambuja Cements Ltd - India
- Antam Resourcindo - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Binh Thuan Hamico - Vietnam
- Medco Energi Mining Internasional
- Tata Chemicals Ltd - India
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- Videocon Industries ltd - India
- Thiess Contractors Indonesia
- Bukit Makmur.PT - Indonesia
- Central Electricity Authority - India
- Singapore Mercantile Exchange
- Indika Energy - Indonesia
- Economic Council, Georgia
- Energy Development Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- Uttam Galva Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kumho Petrochemical, South Korea
- Ceylon Electricity Board - Sri Lanka
- Directorate Of Revenue Intelligence - India
- Simpson Spence & Young - Indonesia
- Wilmar Investment Holdings
- Samtan Co., Ltd - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- Kapuas Tunggal Persada - Indonesia
- Coastal Gujarat Power Limited - India
- Salva Resources Pvt Ltd - India
- Parry Sugars Refinery, India
- Bukit Asam (Persero) Tbk - Indonesia
- India Bulls Power Limited - India
- Maheswari Brothers Coal Limited - India
- Cigading International Bulk Terminal - Indonesia
- Marubeni Corporation - India
- Ind-Barath Power Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Meenaskhi Energy Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
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