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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, 05 July 18
INDONESIAN COAL PRICE REFERENCE HITS 74 MONTHS HIGH OF $104.65 A TON
COALspot.com: HBA keeps rising. According to latest ministerial decree No.1892 K/30/MEM/2018 dated 2 July 2018, the Indonesian Coal Price Reference ...
Wednesday, 04 July 18
TANKER MARKET INSIGHT - KONSTANTINOS KONTOMICHIS
2 years tanker briefing in tanker asset prices
The tanker market is undoubtedly passing one of its’ roughest times over the la ...
Tuesday, 03 July 18
COAL, THE SECOND MAIN COMMODITY FOR CAPES, HAS BEEN SHOWING A REMARKABLE RISE IN TRADE VOLUMES IN THE YEAR SO FAR - THOMAS CHASAPIS
Having reached the mid-point in the year, it seems to be a good time to summarize the overall trends noted in the Dry Bulk sector and more specific ...
Tuesday, 03 July 18
SUPRAMAX: A 56,000-DWT WAS FIXED BASIS DELIVERY SINGAPORE TRIP VIA INDONESIA, REDELIVERY CHINA, AT $12,100 - BALTIC BRIEFING
Capesize
The market generally drifted and by mid-week dropped to what some felt was an artificially low level, only to bounce back at the end o ...
Tuesday, 03 July 18
COAL OVERTAKES IRON ORE IN GOVERNMENT FORECASTS AS AUSTRALIA'S LARGEST EXPORT FOR 2018-19 - MINERALS COUNCIL OF AUSTRALIA
Coal is forecast to be Australia’s largest export earner at $58.1 billion in 2018-19 with iron ore exports forecast to earn $57.7 billion in ...
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- Kideco Jaya Agung - Indonesia
- Mercuria Energy - Indonesia
- ICICI Bank Limited - India
- Eastern Coal Council - USA
- Baramulti Group, Indonesia
- IHS Mccloskey Coal Group - USA
- Metalloyd Limited - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- Bulk Trading Sa - Switzerland
- Global Coal Blending Company Limited - Australia
- Globalindo Alam Lestari - Indonesia
- Lanco Infratech Ltd - India
- Kobexindo Tractors - Indoneisa
- Ind-Barath Power Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Energy Link Ltd, New Zealand
- PowerSource Philippines DevCo
- Simpson Spence & Young - Indonesia
- Dalmia Cement Bharat India
- Vijayanagar Sugar Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- Riau Bara Harum - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Intertek Mineral Services - Indonesia
- Marubeni Corporation - India
- Port Waratah Coal Services - Australia
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- GAC Shipping (India) Pvt Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Sinarmas Energy and Mining - Indonesia
- Bhatia International Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Anglo American - United Kingdom
- Coal and Oil Company - UAE
- Uttam Galva Steels Limited - India
- Mintek Dendrill Indonesia
- Global Green Power PLC Corporation, Philippines
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- Malabar Cements Ltd - India
- India Bulls Power Limited - India
- Global Business Power Corporation, Philippines
- Chamber of Mines of South Africa
- Karaikal Port Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Ministry of Mines - Canada
- Siam City Cement - Thailand
- Ministry of Finance - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- ASAPP Information Group - India
- Maheswari Brothers Coal Limited - India
- CNBM International Corporation - China
- VISA Power Limited - India
- Jindal Steel & Power Ltd - India
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
- OPG Power Generation Pvt Ltd - India
- Bangladesh Power Developement Board
- Ceylon Electricity Board - Sri Lanka
- Therma Luzon, Inc, Philippines
- San Jose City I Power Corp, Philippines
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- Renaissance Capital - South Africa
- Medco Energi Mining Internasional
- SMG Consultants - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Miang Besar Coal Terminal - Indonesia
- Indian Energy Exchange, India
- Meenaskhi Energy Private Limited - India
- Xindia Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sical Logistics Limited - India
- Kaltim Prima Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aditya Birla Group - India
- Orica Australia Pty. Ltd.
- Central Java Power - Indonesia
- TeaM Sual Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
- PTC India Limited - India
- Meralco Power Generation, Philippines
- Makarim & Taira - Indonesia
- Altura Mining Limited, Indonesia
- Manunggal Multi Energi - Indonesia
- London Commodity Brokers - England
- Commonwealth Bank - Australia
- Africa Commodities Group - South Africa
- Bhoruka Overseas - Indonesia
- Jaiprakash Power Ventures ltd
- Siam City Cement PLC, Thailand
- Borneo Indobara - Indonesia
- Heidelberg Cement - Germany
- Directorate Of Revenue Intelligence - India
- Directorate General of MIneral and Coal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Minerals Council of Australia
- SMC Global Power, Philippines
- Formosa Plastics Group - Taiwan
- Semirara Mining Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Sakthi Sugars Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Madhucon Powers Ltd - India
- Star Paper Mills Limited - India
- Economic Council, Georgia
- Latin American Coal - Colombia
- Rio Tinto Coal - Australia
- SN Aboitiz Power Inc, Philippines
- Planning Commission, India
- Thiess Contractors Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Mjunction Services Limited - India
- Larsen & Toubro Limited - India
- Posco Energy - South Korea
- Gujarat Sidhee Cement - India
- International Coal Ventures Pvt Ltd - India
- White Energy Company Limited
- Indogreen Group - Indonesia
- Pendopo Energi Batubara - Indonesia
- Grasim Industreis Ltd - India
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Savvy Resources Ltd - HongKong
- Bukit Baiduri Energy - Indonesia
- Interocean Group of Companies - India
- Bhushan Steel Limited - India
- Ambuja Cements Ltd - India
- GVK Power & Infra Limited - India
- Banpu Public Company Limited - Thailand
- Electricity Authority, New Zealand
- Romanian Commodities Exchange
- Kumho Petrochemical, South Korea
- Coalindo Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Electricity Generating Authority of Thailand
- Indian Oil Corporation Limited
- Oldendorff Carriers - Singapore
- Merrill Lynch Commodities Europe
- Australian Coal Association
- Bukit Asam (Persero) Tbk - Indonesia
- Indika Energy - Indonesia
- Vedanta Resources Plc - India
- Barasentosa Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- MS Steel International - UAE
- Australian Commodity Traders Exchange
- Parliament of New Zealand
- Sindya Power Generating Company Private Ltd
- Deloitte Consulting - India
- Petron Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Vizag Seaport Private Limited - India
- Straits Asia Resources Limited - Singapore
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Energy - Thailand
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- Wood Mackenzie - Singapore
- Bharathi Cement Corporation - India
- Cement Manufacturers Association - India
- Mercator Lines Limited - India
- Edison Trading Spa - Italy
- Attock Cement Pakistan Limited
- Ministry of Transport, Egypt
- Pipit Mutiara Jaya. PT, Indonesia
- The University of Queensland
- Toyota Tsusho Corporation, Japan
- Coastal Gujarat Power Limited - India
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
- Videocon Industries ltd - India
- AsiaOL BioFuels Corp., Philippines
- Energy Development Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Sree Jayajothi Cements Limited - India
- Salva Resources Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- IEA Clean Coal Centre - UK
- GMR Energy Limited - India
- New Zealand Coal & Carbon
- McConnell Dowell - Australia
- Tata Chemicals Ltd - India
- Parry Sugars Refinery, India
- Semirara Mining and Power Corporation, Philippines
- Goldman Sachs - Singapore
- Leighton Contractors Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Standard Chartered Bank - UAE
- Trasteel International SA, Italy
- The State Trading Corporation of India Ltd
- Jorong Barutama Greston.PT - Indonesia
- Thai Mozambique Logistica
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Power Finance Corporation Ltd., India
- Antam Resourcindo - Indonesia
- Agrawal Coal Company - India
- Samtan Co., Ltd - South Korea
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