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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, 06 December 18
CHINA REVISES MANAGEMENT RULES ON ESTABLISHMENT OF FULLY FOREIGN-OWNED SHIPPING BUSINESSES - XINHUA
Foreign shipping companies will find it easier to establish wholly-owned subsidiaries in China thanks to a revised regulation due to take effect on ...
Wednesday, 05 December 18
WORLD COAL PRICES FALL, WITH INDONESIA BENCHMARK FOR DECEMBER, ENDING AT LOWEST SINCE JUNE 2018
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Wednesday, 05 December 18
SHIPPING MARKET INSIGHT - GIANNIS ANDRITSOPOULOS
Is the rise in crude carrier rates driven only by seasonality, or is the recent positive reversal signaling the end of challenging days for the mar ...
Monday, 03 December 18
WCA'S ENGAGEMENT AT COP24 IN KATOWICE - WCA
The 24th Conference of the Parties (COP) to the UN Framework Convention on Climate Change (UNFCCC) will take place from the 2-14 December 2018 in K ...
Monday, 03 December 18
SUPRAMAX: FIXED DELIVERY KALIMANTAN TO WEST COAST INDIA, AT $11000 - THE BALTIC BRIEFING
Capesize
A roller-coaster week for the big ships with hopes soaring at the start for a mini last quarter revival, only to be dashed as the week ...
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- Interocean Group of Companies - India
- SMC Global Power, Philippines
- Ministry of Transport, Egypt
- Edison Trading Spa - Italy
- Sojitz Corporation - Japan
- Energy Development Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Essar Steel Hazira Ltd - India
- Riau Bara Harum - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Holcim Trading Pte Ltd - Singapore
- IHS Mccloskey Coal Group - USA
- Indonesian Coal Mining Association
- Africa Commodities Group - South Africa
- Kartika Selabumi Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Directorate Of Revenue Intelligence - India
- Global Coal Blending Company Limited - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Coal and Oil Company - UAE
- Ind-Barath Power Infra Limited - India
- SMG Consultants - Indonesia
- Baramulti Group, Indonesia
- Straits Asia Resources Limited - Singapore
- London Commodity Brokers - England
- Uttam Galva Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Star Paper Mills Limited - India
- Cigading International Bulk Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Sakthi Sugars Limited - India
- Ministry of Mines - Canada
- CIMB Investment Bank - Malaysia
- IEA Clean Coal Centre - UK
- Meralco Power Generation, Philippines
- McConnell Dowell - Australia
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- Tamil Nadu electricity Board
- Jindal Steel & Power Ltd - India
- Kideco Jaya Agung - Indonesia
- Malabar Cements Ltd - India
- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
- Mercator Lines Limited - India
- Grasim Industreis Ltd - India
- Power Finance Corporation Ltd., India
- Karbindo Abesyapradhi - Indoneisa
- Indogreen Group - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Wilmar Investment Holdings
- Attock Cement Pakistan Limited
- Trasteel International SA, Italy
- Australian Coal Association
- GVK Power & Infra Limited - India
- Kumho Petrochemical, South Korea
- Bhatia International Limited - India
- Barasentosa Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- ICICI Bank Limited - India
- Aditya Birla Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- India Bulls Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- VISA Power Limited - India
- Marubeni Corporation - India
- SN Aboitiz Power Inc, Philippines
- Larsen & Toubro Limited - India
- Xindia Steels Limited - India
- Agrawal Coal Company - India
- Gujarat Sidhee Cement - India
- Thiess Contractors Indonesia
- Australian Commodity Traders Exchange
- Energy Link Ltd, New Zealand
- New Zealand Coal & Carbon
- Kapuas Tunggal Persada - Indonesia
- Latin American Coal - Colombia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rio Tinto Coal - Australia
- Antam Resourcindo - Indonesia
- San Jose City I Power Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Vizag Seaport Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Sree Jayajothi Cements Limited - India
- Intertek Mineral Services - Indonesia
- The University of Queensland
- Mintek Dendrill Indonesia
- Thai Mozambique Logistica
- Goldman Sachs - Singapore
- Chettinad Cement Corporation Ltd - India
- Siam City Cement - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ceylon Electricity Board - Sri Lanka
- Manunggal Multi Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Indo Tambangraya Megah - Indonesia
- Tata Chemicals Ltd - India
- OPG Power Generation Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Indian Oil Corporation Limited
- Posco Energy - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- Global Business Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Economic Council, Georgia
- Chamber of Mines of South Africa
- Renaissance Capital - South Africa
- Orica Mining Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- PowerSource Philippines DevCo
- Indika Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Ministry of Finance - Indonesia
- Anglo American - United Kingdom
- Kobexindo Tractors - Indoneisa
- Salva Resources Pvt Ltd - India
- Eastern Energy - Thailand
- Commonwealth Bank - Australia
- PTC India Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Madhucon Powers Ltd - India
- Indian Energy Exchange, India
- Jaiprakash Power Ventures ltd
- Sical Logistics Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Mercuria Energy - Indonesia
- CNBM International Corporation - China
- The State Trading Corporation of India Ltd
- Karaikal Port Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Bharathi Cement Corporation - India
- Ambuja Cements Ltd - India
- Parry Sugars Refinery, India
- Eastern Coal Council - USA
- Binh Thuan Hamico - Vietnam
- Sindya Power Generating Company Private Ltd
- Merrill Lynch Commodities Europe
- Cement Manufacturers Association - India
- Kalimantan Lumbung Energi - Indonesia
- Port Waratah Coal Services - Australia
- Metalloyd Limited - United Kingdom
- Aboitiz Power Corporation - Philippines
- Bhushan Steel Limited - India
- Heidelberg Cement - Germany
- Borneo Indobara - Indonesia
- Videocon Industries ltd - India
- Parliament of New Zealand
- Coalindo Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Georgia Ports Authority, United States
- GAC Shipping (India) Pvt Ltd
- Bukit Baiduri Energy - Indonesia
- Medco Energi Mining Internasional
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- Coastal Gujarat Power Limited - India
- Simpson Spence & Young - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Meenaskhi Energy Private Limited - India
- The Treasury - Australian Government
- Dalmia Cement Bharat India
- Vedanta Resources Plc - India
- Minerals Council of Australia
- Global Green Power PLC Corporation, Philippines
- Oldendorff Carriers - Singapore
- Mjunction Services Limited - India
- Timah Investasi Mineral - Indoneisa
- Therma Luzon, Inc, Philippines
- Standard Chartered Bank - UAE
- Central Electricity Authority - India
- Bangladesh Power Developement Board
- Sinarmas Energy and Mining - Indonesia
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- White Energy Company Limited
- Planning Commission, India
- GMR Energy Limited - India
- ASAPP Information Group - India
- Singapore Mercantile Exchange
- Altura Mining Limited, Indonesia
- Maheswari Brothers Coal Limited - India
- PNOC Exploration Corporation - Philippines
- Petron Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement PLC, Thailand
- LBH Netherlands Bv - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Deloitte Consulting - India
- Electricity Authority, New Zealand
- Bukit Makmur.PT - Indonesia
- Lanco Infratech Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Formosa Plastics Group - Taiwan
- Price Waterhouse Coopers - Russia
- Semirara Mining Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Generating Authority of Thailand
- Makarim & Taira - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
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