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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, 28 August 18
COURT CONCLUDES DELIVERY MADE IN ACCORDANCE WITH TERMS OF LOIS - INCE&CO
Glencore Agriculture BV v Navig8 Chemicals Pool Inc (Songa Winds) [2018] EWCA 1901 (Civ)
In this case, the Commercial Court fo ...
Tuesday, 28 August 18
SUPRAMAX: A COAL TRIP VIA INDONESIA PAID $13,500 ON A 56,000DWT TO WC INDIA - BALTIC BRIEFING
Capesize
The Singapore holiday mid-week disrupted trading and unsettled the market, with owners losing some resilience. The market took on a la ...
Tuesday, 28 August 18
SHIPPING MARKET UPDATE - GEORGE LAZARIDIS
As we edge close to the start of the Autumn Season, a period within the year that is usually characterized as the pivot point from the final quarte ...
Friday, 24 August 18
KOREAN RESTRICTIONS ON COAL SULPHUR IMPACTING HUNTER EXPORTS - THE HERALD
WARNINGS that Korean restrictions on sulphur levels in coal could hurt the Hunter industry appear to have been accurate, according to a report in t ...
Thursday, 23 August 18
RUSSIA'S MECHEL PRODUCED 9.69 MMT OF RUN-OF-MINE COAL IN 1H'2018
Mechel PAO, one of the leading Russian mining and metals companies, announces 1H2018 operational results.
Mechel PAO’s Chief E ...
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- Kohat Cement Company Ltd. - Pakistan
- SN Aboitiz Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Ind-Barath Power Infra Limited - India
- Indian Oil Corporation Limited
- Kumho Petrochemical, South Korea
- Bukit Baiduri Energy - Indonesia
- Borneo Indobara - Indonesia
- Chamber of Mines of South Africa
- Directorate Of Revenue Intelligence - India
- OPG Power Generation Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- London Commodity Brokers - England
- PTC India Limited - India
- Salva Resources Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Indian Energy Exchange, India
- Thiess Contractors Indonesia
- Essar Steel Hazira Ltd - India
- Bhoruka Overseas - Indonesia
- GAC Shipping (India) Pvt Ltd
- LBH Netherlands Bv - Netherlands
- Attock Cement Pakistan Limited
- GN Power Mariveles Coal Plant, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Makarim & Taira - Indonesia
- Kartika Selabumi Mining - Indonesia
- Agrawal Coal Company - India
- Wood Mackenzie - Singapore
- Central Java Power - Indonesia
- Merrill Lynch Commodities Europe
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CNBM International Corporation - China
- Energy Development Corp, Philippines
- Marubeni Corporation - India
- Globalindo Alam Lestari - Indonesia
- New Zealand Coal & Carbon
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- MS Steel International - UAE
- Independent Power Producers Association of India
- Kaltim Prima Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Latin American Coal - Colombia
- Petron Corporation, Philippines
- The Treasury - Australian Government
- Rio Tinto Coal - Australia
- Power Finance Corporation Ltd., India
- Chettinad Cement Corporation Ltd - India
- Ministry of Mines - Canada
- Bukit Makmur.PT - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Billiton Holdings Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- CIMB Investment Bank - Malaysia
- Binh Thuan Hamico - Vietnam
- Toyota Tsusho Corporation, Japan
- The University of Queensland
- Kobexindo Tractors - Indoneisa
- Eastern Coal Council - USA
- Bangladesh Power Developement Board
- Central Electricity Authority - India
- Mjunction Services Limited - India
- Jaiprakash Power Ventures ltd
- Vizag Seaport Private Limited - India
- Tata Chemicals Ltd - India
- White Energy Company Limited
- India Bulls Power Limited - India
- Straits Asia Resources Limited - Singapore
- Deloitte Consulting - India
- Vedanta Resources Plc - India
- Meralco Power Generation, Philippines
- GMR Energy Limited - India
- International Coal Ventures Pvt Ltd - India
- Economic Council, Georgia
- TeaM Sual Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Simpson Spence & Young - Indonesia
- Interocean Group of Companies - India
- Trasteel International SA, Italy
- Holcim Trading Pte Ltd - Singapore
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- Medco Energi Mining Internasional
- Bhushan Steel Limited - India
- Pendopo Energi Batubara - Indonesia
- Carbofer General Trading SA - India
- Meenaskhi Energy Private Limited - India
- Cement Manufacturers Association - India
- Siam City Cement PLC, Thailand
- Sical Logistics Limited - India
- Alfred C Toepfer International GmbH - Germany
- Parry Sugars Refinery, India
- PetroVietnam Power Coal Import and Supply Company
- Heidelberg Cement - Germany
- Uttam Galva Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Dalmia Cement Bharat India
- Bahari Cakrawala Sebuku - Indonesia
- SMC Global Power, Philippines
- Formosa Plastics Group - Taiwan
- Australian Coal Association
- Bayan Resources Tbk. - Indonesia
- Manunggal Multi Energi - Indonesia
- Ambuja Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Commonwealth Bank - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Romanian Commodities Exchange
- Bharathi Cement Corporation - India
- Baramulti Group, Indonesia
- GVK Power & Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Minerals Council of Australia
- PowerSource Philippines DevCo
- Karbindo Abesyapradhi - Indoneisa
- Wilmar Investment Holdings
- Ministry of Finance - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Standard Chartered Bank - UAE
- SMG Consultants - Indonesia
- Indonesian Coal Mining Association
- Eastern Energy - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- San Jose City I Power Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- IEA Clean Coal Centre - UK
- Siam City Cement - Thailand
- Coalindo Energy - Indonesia
- Planning Commission, India
- Lanco Infratech Ltd - India
- Electricity Generating Authority of Thailand
- Sakthi Sugars Limited - India
- Gujarat Mineral Development Corp Ltd - India
- ASAPP Information Group - India
- Directorate General of MIneral and Coal - Indonesia
- Sojitz Corporation - Japan
- Semirara Mining Corp, Philippines
- Therma Luzon, Inc, Philippines
- Jindal Steel & Power Ltd - India
- Price Waterhouse Coopers - Russia
- Posco Energy - South Korea
- Asmin Koalindo Tuhup - Indonesia
- McConnell Dowell - Australia
- Electricity Authority, New Zealand
- Parliament of New Zealand
- Singapore Mercantile Exchange
- AsiaOL BioFuels Corp., Philippines
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Global Coal Blending Company Limited - Australia
- Bulk Trading Sa - Switzerland
- Bhatia International Limited - India
- Orica Mining Services - Indonesia
- Port Waratah Coal Services - Australia
- Iligan Light & Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Savvy Resources Ltd - HongKong
- Jorong Barutama Greston.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Anglo American - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- Australian Commodity Traders Exchange
- Renaissance Capital - South Africa
- Kideco Jaya Agung - Indonesia
- Star Paper Mills Limited - India
- Semirara Mining and Power Corporation, Philippines
- ICICI Bank Limited - India
- Africa Commodities Group - South Africa
- Madhucon Powers Ltd - India
- Indika Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- Timah Investasi Mineral - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Georgia Ports Authority, United States
- Edison Trading Spa - Italy
- Grasim Industreis Ltd - India
- Global Green Power PLC Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Sinarmas Energy and Mining - Indonesia
- Sarangani Energy Corporation, Philippines
- Tamil Nadu electricity Board
- Thai Mozambique Logistica
- VISA Power Limited - India
- Malabar Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Ministry of Transport, Egypt
- Mercator Lines Limited - India
- Krishnapatnam Port Company Ltd. - India
- Global Business Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Banpu Public Company Limited - Thailand
- IHS Mccloskey Coal Group - USA
- Intertek Mineral Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- Kepco SPC Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- European Bulk Services B.V. - Netherlands
- Indogreen Group - Indonesia
- Antam Resourcindo - Indonesia
- Maheswari Brothers Coal Limited - India
- Xindia Steels Limited - India
- Mintek Dendrill Indonesia
- PNOC Exploration Corporation - Philippines
- Larsen & Toubro Limited - India
- Altura Mining Limited, Indonesia
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