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