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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, 13 September 18
SUPRAMAX: INDO-INDIA COAL RUN WAS FIXED CLOSE TO $16000 ON ULTRA - FEARNLEYS
Capesize
Rates took a further drop in the beginning of the week, to later find a floor around mid-week reaching mid USD 7 level for c5 and just ...
Thursday, 13 September 18
SHIPPING IS INCREASINGLY CAUGHT IN THE TRADE WAR LINE OF CROSSFIRE - PETER SAND
Once again, the already long list of tariffed goods has been made even longer. Many more commodities were hit on 23 August, but September is likely ...
Wednesday, 12 September 18
THE INTERRELATIONSHIP BETWEEN LETTERS OF INDEMNITY AND CHARTERPARTY "TIME BAR" PROVISIONS - STANDARD CLUB
KNOWLEDGE TO ELEVATE
Introduction
A recent English Court of Appeal decision provides important guidance on the applicability of charterpar ...
Wednesday, 12 September 18
IS LNG POISED FOR A NEW GROWTH CYCLE? - WOOD MACKENZIE
Gas needs to work for its long-term sustainability. But the mood music is upbeat. Just 18 months ago the LNG market was depressed, anticipating an ...
Wednesday, 12 September 18
U.S. TOTAL COAL EXPORTS TO BE 107 MMST IN 2018 AND 101 MMST IN 2019 - EIA
EIA forecasts U.S. coal production will decline by 1% to 768 million short tons (MMst) in 2018, despite a 10% (10 MMst) increase in coal exports.
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- Wood Mackenzie - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Mercuria Energy - Indonesia
- London Commodity Brokers - England
- The University of Queensland
- Gujarat Mineral Development Corp Ltd - India
- Chamber of Mines of South Africa
- Sarangani Energy Corporation, Philippines
- IEA Clean Coal Centre - UK
- Attock Cement Pakistan Limited
- Semirara Mining and Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Larsen & Toubro Limited - India
- Indonesian Coal Mining Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mjunction Services Limited - India
- Carbofer General Trading SA - India
- ASAPP Information Group - India
- Tamil Nadu electricity Board
- Maharashtra Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Planning Commission, India
- Semirara Mining Corp, Philippines
- San Jose City I Power Corp, Philippines
- Jaiprakash Power Ventures ltd
- Aboitiz Power Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Finance - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bulk Trading Sa - Switzerland
- GAC Shipping (India) Pvt Ltd
- Bhoruka Overseas - Indonesia
- Tata Chemicals Ltd - India
- International Coal Ventures Pvt Ltd - India
- Energy Development Corp, Philippines
- Bhatia International Limited - India
- Kalimantan Lumbung Energi - Indonesia
- MS Steel International - UAE
- Sree Jayajothi Cements Limited - India
- Ministry of Mines - Canada
- Riau Bara Harum - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Manunggal Multi Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Cement Manufacturers Association - India
- Binh Thuan Hamico - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- McConnell Dowell - Australia
- Indian Oil Corporation Limited
- SMG Consultants - Indonesia
- Sinarmas Energy and Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Global Coal Blending Company Limited - Australia
- Anglo American - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- India Bulls Power Limited - India
- GVK Power & Infra Limited - India
- Siam City Cement PLC, Thailand
- Madhucon Powers Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Sindya Power Generating Company Private Ltd
- Globalindo Alam Lestari - Indonesia
- Barasentosa Lestari - Indonesia
- Eastern Coal Council - USA
- Jindal Steel & Power Ltd - India
- Sojitz Corporation - Japan
- Formosa Plastics Group - Taiwan
- Bhushan Steel Limited - India
- Romanian Commodities Exchange
- Global Business Power Corporation, Philippines
- Economic Council, Georgia
- Australian Coal Association
- Trasteel International SA, Italy
- Simpson Spence & Young - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Commonwealth Bank - Australia
- Ministry of Transport, Egypt
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- Global Green Power PLC Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Energy - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Agrawal Coal Company - India
- European Bulk Services B.V. - Netherlands
- Dalmia Cement Bharat India
- Indika Energy - Indonesia
- Wilmar Investment Holdings
- Lanco Infratech Ltd - India
- Maheswari Brothers Coal Limited - India
- Oldendorff Carriers - Singapore
- Directorate Of Revenue Intelligence - India
- Parry Sugars Refinery, India
- Grasim Industreis Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- The State Trading Corporation of India Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Parliament of New Zealand
- Sakthi Sugars Limited - India
- Alfred C Toepfer International GmbH - Germany
- Star Paper Mills Limited - India
- Leighton Contractors Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Bangladesh Power Developement Board
- Georgia Ports Authority, United States
- Central Electricity Authority - India
- Cigading International Bulk Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Altura Mining Limited, Indonesia
- Posco Energy - South Korea
- Malabar Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Billiton Holdings Pty Ltd - Australia
- PTC India Limited - India
- Renaissance Capital - South Africa
- Mercator Lines Limited - India
- Singapore Mercantile Exchange
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- Bahari Cakrawala Sebuku - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indogreen Group - Indonesia
- Rio Tinto Coal - Australia
- AsiaOL BioFuels Corp., Philippines
- Energy Link Ltd, New Zealand
- Xindia Steels Limited - India
- Banpu Public Company Limited - Thailand
- Antam Resourcindo - Indonesia
- CIMB Investment Bank - Malaysia
- Price Waterhouse Coopers - Russia
- Siam City Cement - Thailand
- Coalindo Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Coastal Gujarat Power Limited - India
- Samtan Co., Ltd - South Korea
- Kideco Jaya Agung - Indonesia
- Orica Mining Services - Indonesia
- Indian Energy Exchange, India
- Kapuas Tunggal Persada - Indonesia
- Kumho Petrochemical, South Korea
- South Luzon Thermal Energy Corporation
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Independent Power Producers Association of India
- Goldman Sachs - Singapore
- Coal and Oil Company - UAE
- Africa Commodities Group - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Latin American Coal - Colombia
- Metalloyd Limited - United Kingdom
- Straits Asia Resources Limited - Singapore
- Aditya Birla Group - India
- Vizag Seaport Private Limited - India
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- Therma Luzon, Inc, Philippines
- Australian Commodity Traders Exchange
- Heidelberg Cement - Germany
- VISA Power Limited - India
- IHS Mccloskey Coal Group - USA
- Karbindo Abesyapradhi - Indoneisa
- Electricity Generating Authority of Thailand
- SN Aboitiz Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Meralco Power Generation, Philippines
- Borneo Indobara - Indonesia
- New Zealand Coal & Carbon
- Minerals Council of Australia
- OPG Power Generation Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Sical Logistics Limited - India
- ICICI Bank Limited - India
- Port Waratah Coal Services - Australia
- Marubeni Corporation - India
- CNBM International Corporation - China
- Ambuja Cements Ltd - India
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- Edison Trading Spa - Italy
- PNOC Exploration Corporation - Philippines
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- Gujarat Sidhee Cement - India
- Central Java Power - Indonesia
- Standard Chartered Bank - UAE
- Thiess Contractors Indonesia
- Petron Corporation, Philippines
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- Medco Energi Mining Internasional
- Kobexindo Tractors - Indoneisa
- Thai Mozambique Logistica
- Iligan Light & Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- The Treasury - Australian Government
- GMR Energy Limited - India
- Indo Tambangraya Megah - Indonesia
- Makarim & Taira - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Toyota Tsusho Corporation, Japan
- Bharathi Cement Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kepco SPC Power Corporation, Philippines
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