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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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Saturday, 10 February 18
OIL PRICE USD 100/BARREL BY END OF 2018! - SAROJ MOHAPATRA
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Friday, 09 February 18
COAL BUYERS SPOOKED BY INDONESIA'S NEW SHIPPING RULES - ASSOC
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Thursday, 08 February 18
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Thursday, 08 February 18
A NEW WEEK WITH A SOFT SENTIMENT AND DECREASING RATES IN BOTH HEMISPHERE FOR THE PANAMAXES, SAYS FEARNLEYS
Supramax
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Wednesday, 07 February 18
INDONESIAN COAL PRICE REFERENCE RISES TO HIT THIRTEEN-MONTH HIGH OF $100.69 A TON
COALspot.com: The Indonesian Coal Price Reference (HBA) rose 5.39 per cent in February 2018, the latest ministerial decree showed.
The benchma ...
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- Central Electricity Authority - India
- Globalindo Alam Lestari - Indonesia
- ICICI Bank Limited - India
- Rio Tinto Coal - Australia
- Banpu Public Company Limited - Thailand
- Krishnapatnam Port Company Ltd. - India
- Economic Council, Georgia
- Essar Steel Hazira Ltd - India
- Chamber of Mines of South Africa
- Formosa Plastics Group - Taiwan
- Borneo Indobara - Indonesia
- Meralco Power Generation, Philippines
- Bulk Trading Sa - Switzerland
- International Coal Ventures Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Tata Chemicals Ltd - India
- Global Business Power Corporation, Philippines
- Bangladesh Power Developement Board
- Jorong Barutama Greston.PT - Indonesia
- Energy Development Corp, Philippines
- Indogreen Group - Indonesia
- Latin American Coal - Colombia
- AsiaOL BioFuels Corp., Philippines
- Merrill Lynch Commodities Europe
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- Binh Thuan Hamico - Vietnam
- Tamil Nadu electricity Board
- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Bukit Baiduri Energy - Indonesia
- SMC Global Power, Philippines
- Eastern Energy - Thailand
- Cement Manufacturers Association - India
- ASAPP Information Group - India
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- Mjunction Services Limited - India
- Medco Energi Mining Internasional
- Chettinad Cement Corporation Ltd - India
- Uttam Galva Steels Limited - India
- Indika Energy - Indonesia
- Heidelberg Cement - Germany
- Ceylon Electricity Board - Sri Lanka
- Bukit Makmur.PT - Indonesia
- Parliament of New Zealand
- Antam Resourcindo - Indonesia
- Indo Tambangraya Megah - Indonesia
- Meenaskhi Energy Private Limited - India
- Lanco Infratech Ltd - India
- Price Waterhouse Coopers - Russia
- Global Coal Blending Company Limited - Australia
- Gujarat Sidhee Cement - India
- Videocon Industries ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Toyota Tsusho Corporation, Japan
- Xindia Steels Limited - India
- Edison Trading Spa - Italy
- Dalmia Cement Bharat India
- Aboitiz Power Corporation - Philippines
- Deloitte Consulting - India
- Global Green Power PLC Corporation, Philippines
- McConnell Dowell - Australia
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- Coalindo Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kideco Jaya Agung - Indonesia
- Petron Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Kaltim Prima Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Attock Cement Pakistan Limited
- The State Trading Corporation of India Ltd
- Leighton Contractors Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Vedanta Resources Plc - India
- Renaissance Capital - South Africa
- Mintek Dendrill Indonesia
- LBH Netherlands Bv - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Standard Chartered Bank - UAE
- Thiess Contractors Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sical Logistics Limited - India
- Mercuria Energy - Indonesia
- Anglo American - United Kingdom
- Semirara Mining Corp, Philippines
- South Luzon Thermal Energy Corporation
- Vizag Seaport Private Limited - India
- Indian Energy Exchange, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sree Jayajothi Cements Limited - India
- CNBM International Corporation - China
- Energy Link Ltd, New Zealand
- Ambuja Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Independent Power Producers Association of India
- Bahari Cakrawala Sebuku - Indonesia
- Riau Bara Harum - Indonesia
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- Wood Mackenzie - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Transport, Egypt
- Grasim Industreis Ltd - India
- Eastern Coal Council - USA
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining and Power Corporation, Philippines
- SMG Consultants - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PTC India Limited - India
- Savvy Resources Ltd - HongKong
- Romanian Commodities Exchange
- Sarangani Energy Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Electricity Authority, New Zealand
- GMR Energy Limited - India
- Cigading International Bulk Terminal - Indonesia
- Wilmar Investment Holdings
- GAC Shipping (India) Pvt Ltd
- New Zealand Coal & Carbon
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Mercator Lines Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Vijayanagar Sugar Pvt Ltd - India
- India Bulls Power Limited - India
- London Commodity Brokers - England
- Altura Mining Limited, Indonesia
- Orica Mining Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Parry Sugars Refinery, India
- Bhatia International Limited - India
- Central Java Power - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Australian Coal Association
- GVK Power & Infra Limited - India
- Kumho Petrochemical, South Korea
- PNOC Exploration Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Singapore Mercantile Exchange
- Metalloyd Limited - United Kingdom
- Sakthi Sugars Limited - India
- Australian Commodity Traders Exchange
- Ministry of Mines - Canada
- Bhushan Steel Limited - India
- Electricity Generating Authority of Thailand
- Salva Resources Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Trasteel International SA, Italy
- Kobexindo Tractors - Indoneisa
- Minerals Council of Australia
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Finance - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Planning Commission, India
- IHS Mccloskey Coal Group - USA
- Orica Australia Pty. Ltd.
- Maheswari Brothers Coal Limited - India
- Indonesian Coal Mining Association
- IEA Clean Coal Centre - UK
- Commonwealth Bank - Australia
- Directorate Of Revenue Intelligence - India
- Goldman Sachs - Singapore
- Therma Luzon, Inc, Philippines
- Marubeni Corporation - India
- Timah Investasi Mineral - Indoneisa
- Larsen & Toubro Limited - India
- Africa Commodities Group - South Africa
- Jaiprakash Power Ventures ltd
- Power Finance Corporation Ltd., India
- Malabar Cements Ltd - India
- The Treasury - Australian Government
- Port Waratah Coal Services - Australia
- Manunggal Multi Energi - Indonesia
- Georgia Ports Authority, United States
- Pendopo Energi Batubara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Carbofer General Trading SA - India
- Star Paper Mills Limited - India
- Barasentosa Lestari - Indonesia
- Baramulti Group, Indonesia
- Interocean Group of Companies - India
- European Bulk Services B.V. - Netherlands
- Samtan Co., Ltd - South Korea
- Madhucon Powers Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- White Energy Company Limited
- Sojitz Corporation - Japan
- Asmin Koalindo Tuhup - Indonesia
- Iligan Light & Power Inc, Philippines
- Agrawal Coal Company - India
- Posco Energy - South Korea
- Bharathi Cement Corporation - India
- MS Steel International - UAE
- VISA Power Limited - India
- Aditya Birla Group - India
- San Jose City I Power Corp, Philippines
- Makarim & Taira - Indonesia
- Coastal Gujarat Power Limited - India
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