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