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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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- Indian Energy Exchange, India
- Vedanta Resources Plc - India
- Power Finance Corporation Ltd., India
- Global Coal Blending Company Limited - Australia
- Timah Investasi Mineral - Indoneisa
- Energy Development Corp, Philippines
- Meralco Power Generation, Philippines
- Semirara Mining Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- Therma Luzon, Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Xindia Steels Limited - India
- Sical Logistics Limited - India
- Binh Thuan Hamico - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Sidhee Cement - India
- Wood Mackenzie - Singapore
- Uttam Galva Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Posco Energy - South Korea
- Ind-Barath Power Infra Limited - India
- Mjunction Services Limited - India
- Coastal Gujarat Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Orica Mining Services - Indonesia
- Global Business Power Corporation, Philippines
- Indonesian Coal Mining Association
- Thai Mozambique Logistica
- Malabar Cements Ltd - India
- The University of Queensland
- Price Waterhouse Coopers - Russia
- ICICI Bank Limited - India
- Kepco SPC Power Corporation, Philippines
- New Zealand Coal & Carbon
- CNBM International Corporation - China
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Samtan Co., Ltd - South Korea
- Electricity Authority, New Zealand
- South Luzon Thermal Energy Corporation
- Karbindo Abesyapradhi - Indoneisa
- Makarim & Taira - Indonesia
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- Miang Besar Coal Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Siam City Cement - Thailand
- Electricity Generating Authority of Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SN Aboitiz Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Aboitiz Power Corporation - Philippines
- Bharathi Cement Corporation - India
- Kaltim Prima Coal - Indonesia
- Central Electricity Authority - India
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- Carbofer General Trading SA - India
- Minerals Council of Australia
- The State Trading Corporation of India Ltd
- Goldman Sachs - Singapore
- Economic Council, Georgia
- IHS Mccloskey Coal Group - USA
- Sakthi Sugars Limited - India
- Ministry of Mines - Canada
- AsiaOL BioFuels Corp., Philippines
- SMG Consultants - Indonesia
- Indika Energy - Indonesia
- Africa Commodities Group - South Africa
- San Jose City I Power Corp, Philippines
- Barasentosa Lestari - Indonesia
- Medco Energi Mining Internasional
- Tamil Nadu electricity Board
- Leighton Contractors Pty Ltd - Australia
- Romanian Commodities Exchange
- Oldendorff Carriers - Singapore
- Sarangani Energy Corporation, Philippines
- Siam City Cement PLC, Thailand
- Banpu Public Company Limited - Thailand
- Dalmia Cement Bharat India
- Krishnapatnam Port Company Ltd. - India
- Indogreen Group - Indonesia
- Independent Power Producers Association of India
- Deloitte Consulting - India
- Kalimantan Lumbung Energi - Indonesia
- Bangladesh Power Developement Board
- PowerSource Philippines DevCo
- Planning Commission, India
- Maharashtra Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- PTC India Limited - India
- Bhoruka Overseas - Indonesia
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- GMR Energy Limited - India
- Coal and Oil Company - UAE
- Antam Resourcindo - Indonesia
- McConnell Dowell - Australia
- Sree Jayajothi Cements Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- SMC Global Power, Philippines
- Kumho Petrochemical, South Korea
- Chamber of Mines of South Africa
- Meenaskhi Energy Private Limited - India
- GAC Shipping (India) Pvt Ltd
- White Energy Company Limited
- The Treasury - Australian Government
- Petron Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Singapore Mercantile Exchange
- Eastern Energy - Thailand
- Heidelberg Cement - Germany
- TeaM Sual Corporation - Philippines
- Sojitz Corporation - Japan
- Parry Sugars Refinery, India
- Bahari Cakrawala Sebuku - Indonesia
- Central Java Power - Indonesia
- Mercuria Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Wilmar Investment Holdings
- Bayan Resources Tbk. - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- India Bulls Power Limited - India
- Indian Oil Corporation Limited
- Globalindo Alam Lestari - Indonesia
- Larsen & Toubro Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Coal Council - USA
- Tata Chemicals Ltd - India
- VISA Power Limited - India
- CIMB Investment Bank - Malaysia
- Cement Manufacturers Association - India
- Global Green Power PLC Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Latin American Coal - Colombia
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- Essar Steel Hazira Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Marubeni Corporation - India
- Madhucon Powers Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bulk Trading Sa - Switzerland
- Savvy Resources Ltd - HongKong
- Pipit Mutiara Jaya. PT, Indonesia
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Ministry of Finance - Indonesia
- Australian Coal Association
- Kartika Selabumi Mining - Indonesia
- Standard Chartered Bank - UAE
- Asmin Koalindo Tuhup - Indonesia
- Mercator Lines Limited - India
- Videocon Industries ltd - India
- Renaissance Capital - South Africa
- Holcim Trading Pte Ltd - Singapore
- Altura Mining Limited, Indonesia
- Straits Asia Resources Limited - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Chettinad Cement Corporation Ltd - India
- Port Waratah Coal Services - Australia
- Thiess Contractors Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Karaikal Port Pvt Ltd - India
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Attock Cement Pakistan Limited
- Intertek Mineral Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- Lanco Infratech Ltd - India
- Trasteel International SA, Italy
- Metalloyd Limited - United Kingdom
- Borneo Indobara - Indonesia
- Bhatia International Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Edison Trading Spa - Italy
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Ambuja Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Interocean Group of Companies - India
- Commonwealth Bank - Australia
- London Commodity Brokers - England
- Kobexindo Tractors - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- International Coal Ventures Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Rashtriya Ispat Nigam Limited - India
- Sinarmas Energy and Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Ceylon Electricity Board - Sri Lanka
- Maheswari Brothers Coal Limited - India
- Parliament of New Zealand
- Vizag Seaport Private Limited - India
- Jindal Steel & Power Ltd - India
- Star Paper Mills Limited - India
- Agrawal Coal Company - India
- Manunggal Multi Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
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