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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, 12 July 18
SUPRAMAX: INDO/CHINA COAL RV IS BEING FIXED AROUND USD 10500 BSS SINGAPORE - FEARNLEYS
Capesize
Cape market continue to be extremely volatile says Fearnleys in its latst weekly report.
The further noted that, last week ended wi ...
Tuesday, 10 July 18
SHIPPING MARKET ANALYSIS - GEORGE LAZARIDIS
The trade dispute saga continued over the past week, as new tariffs were put into force on Friday in both the U.S. and China and have already taken ...
Tuesday, 10 July 18
SUPPORTING SULPHUR 2020 CONSISTENT IMPLEMENTATION - IMO
An IMO working group is meeting (9-13 July) to develop guidelines to support the consistent implementation of the 0.50% limit for the sulphur conte ...
Monday, 09 July 18
RISING COAL PRICES LIFTING AUSTRALIA'S EXPORT REVENUES BUT INVESTORS STAYING AWAY - NEWCASTLE HERALD
Newcastle coal prices have risen more than 40 per cent in a year to be at their highest levels for seven years but the industry is becoming increas ...
Saturday, 07 July 18
SUPRAMAX: THE ASIAN MARKET STRUGGLED; A 57K-DWT WAS REPORTED FIXED BASIS DELIVERY SINGAPORE FOR A TRIP VIA INDONESIA REDELIVERY INDIA AT $12K
Capesize
A punchy week for the big ships that saw Atlantic rates soar, with the tonnage list tight prompting charterers to split cargoes, thoug ...
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- Gujarat Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- The Treasury - Australian Government
- Orica Australia Pty. Ltd.
- Baramulti Group, Indonesia
- Africa Commodities Group - South Africa
- Marubeni Corporation - India
- San Jose City I Power Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Bangladesh Power Developement Board
- Australian Coal Association
- Directorate Of Revenue Intelligence - India
- ICICI Bank Limited - India
- Standard Chartered Bank - UAE
- Edison Trading Spa - Italy
- Bahari Cakrawala Sebuku - Indonesia
- Indogreen Group - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Planning Commission, India
- Independent Power Producers Association of India
- Vedanta Resources Plc - India
- Global Coal Blending Company Limited - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Uttam Galva Steels Limited - India
- Indonesian Coal Mining Association
- Siam City Cement PLC, Thailand
- Bhoruka Overseas - Indonesia
- PTC India Limited - India
- Alfred C Toepfer International GmbH - Germany
- Aboitiz Power Corporation - Philippines
- Borneo Indobara - Indonesia
- Sojitz Corporation - Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Commonwealth Bank - Australia
- Xindia Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Ministry of Transport, Egypt
- Orica Mining Services - Indonesia
- Ambuja Cements Ltd - India
- Mintek Dendrill Indonesia
- Salva Resources Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Rio Tinto Coal - Australia
- Sree Jayajothi Cements Limited - India
- Electricity Generating Authority of Thailand
- Videocon Industries ltd - India
- Thai Mozambique Logistica
- Lanco Infratech Ltd - India
- Therma Luzon, Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Deloitte Consulting - India
- Eastern Coal Council - USA
- Asmin Koalindo Tuhup - Indonesia
- Sakthi Sugars Limited - India
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- Madhucon Powers Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Australian Commodity Traders Exchange
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
- Samtan Co., Ltd - South Korea
- Neyveli Lignite Corporation Ltd, - India
- TeaM Sual Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Petron Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Coal and Oil Company - UAE
- The State Trading Corporation of India Ltd
- Sical Logistics Limited - India
- Ind-Barath Power Infra Limited - India
- Wilmar Investment Holdings
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Karbindo Abesyapradhi - Indoneisa
- Wood Mackenzie - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kartika Selabumi Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- Jorong Barutama Greston.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Agrawal Coal Company - India
- Sarangani Energy Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Minerals Council of Australia
- ASAPP Information Group - India
- Vizag Seaport Private Limited - India
- Goldman Sachs - Singapore
- Globalindo Alam Lestari - Indonesia
- Renaissance Capital - South Africa
- Makarim & Taira - Indonesia
- White Energy Company Limited
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- IHS Mccloskey Coal Group - USA
- Semirara Mining Corp, Philippines
- Ministry of Finance - Indonesia
- Karaikal Port Pvt Ltd - India
- Latin American Coal - Colombia
- Bukit Baiduri Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Meralco Power Generation, Philippines
- Riau Bara Harum - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Larsen & Toubro Limited - India
- Ceylon Electricity Board - Sri Lanka
- Mjunction Services Limited - India
- Bayan Resources Tbk. - Indonesia
- Central Java Power - Indonesia
- Interocean Group of Companies - India
- Vijayanagar Sugar Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- South Luzon Thermal Energy Corporation
- Price Waterhouse Coopers - Russia
- PowerSource Philippines DevCo
- Mercator Lines Limited - India
- Aditya Birla Group - India
- Kalimantan Lumbung Energi - Indonesia
- Bhatia International Limited - India
- Antam Resourcindo - Indonesia
- Chamber of Mines of South Africa
- IEA Clean Coal Centre - UK
- Bharathi Cement Corporation - India
- SMC Global Power, Philippines
- Directorate General of MIneral and Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Carbofer General Trading SA - India
- GAC Shipping (India) Pvt Ltd
- Krishnapatnam Port Company Ltd. - India
- Cigading International Bulk Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Cement Manufacturers Association - India
- MS Steel International - UAE
- Medco Energi Mining Internasional
- Tamil Nadu electricity Board
- Parliament of New Zealand
- Coalindo Energy - Indonesia
- Gujarat Sidhee Cement - India
- Indian Oil Corporation Limited
- Rashtriya Ispat Nigam Limited - India
- New Zealand Coal & Carbon
- Siam City Cement - Thailand
- Formosa Plastics Group - Taiwan
- Trasteel International SA, Italy
- Maheswari Brothers Coal Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Development Corp, Philippines
- GVK Power & Infra Limited - India
- Oldendorff Carriers - Singapore
- Essar Steel Hazira Ltd - India
- McConnell Dowell - Australia
- GMR Energy Limited - India
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Ministry of Mines - Canada
- Dalmia Cement Bharat India
- Kumho Petrochemical, South Korea
- Central Electricity Authority - India
- Posco Energy - South Korea
- Simpson Spence & Young - Indonesia
- Energy Link Ltd, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Altura Mining Limited, Indonesia
- London Commodity Brokers - England
- Intertek Mineral Services - Indonesia
- Attock Cement Pakistan Limited
- VISA Power Limited - India
- Savvy Resources Ltd - HongKong
- Heidelberg Cement - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- Star Paper Mills Limited - India
- Electricity Authority, New Zealand
- Global Business Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Bhushan Steel Limited - India
- Tata Chemicals Ltd - India
- Pendopo Energi Batubara - Indonesia
- Power Finance Corporation Ltd., India
- Port Waratah Coal Services - Australia
- Sindya Power Generating Company Private Ltd
- Iligan Light & Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- SMG Consultants - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Merrill Lynch Commodities Europe
- Mercuria Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Indian Energy Exchange, India
- Sinarmas Energy and Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Indika Energy - Indonesia
- Georgia Ports Authority, United States
- The University of Queensland
- Bukit Makmur.PT - Indonesia
- Eastern Energy - Thailand
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