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