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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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Wednesday, 07 February 18
SHIPPING MARKET INSIGHT - KATERINA RESTIS
Crude oil supply has been reported to have grown by approx. 2.5% reaching 40.1m bpd in 2017. However, tanker charter rates have been under pressure ...
Tuesday, 06 February 18
THE FUNDAMENTALS FOR INDIAN COAL IMPORTS CONTINUE TO LOOK PROMISING - TORVALD KLAVENESS
Back in August we reported that the fundamentals impacting Indian coal imports looked more promising.
Trade flow data today implies 17.4Mt of ...
Monday, 05 February 18
SUPRAMAX : INDONESIA TO INDIA PASSING THROUGH SINGAPORE HAS SOFTENED
COALspot.com: The daily average earnings for Supramax, for the route Indonesia to India passing through Singapore has softened, week over week, own ...
Friday, 02 February 18
SUPRAMAX : INDONESIA TO CHINA COAL TRIPS ARE PAYING AROUND MID USD 9000 - FEARNLEYS
Supramax
Rather quiet week within Atl, specially Continent due to lack of cargoes.
According to Fearnleys Weekly - Dry bulk report published ...
Friday, 02 February 18
U.S. YEAR-TO-DATE COAL PRODUCTION TOTALED 54.1 MMST, DOWN 8.8% YOY - EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 15.3 million short tons ...
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Iligan Light & Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- VISA Power Limited - India
- Trasteel International SA, Italy
- GMR Energy Limited - India
- The University of Queensland
- Edison Trading Spa - Italy
- Merrill Lynch Commodities Europe
- India Bulls Power Limited - India
- Meenaskhi Energy Private Limited - India
- ICICI Bank Limited - India
- CNBM International Corporation - China
- Videocon Industries ltd - India
- Lanco Infratech Ltd - India
- Indonesian Coal Mining Association
- Alfred C Toepfer International GmbH - Germany
- Dalmia Cement Bharat India
- Barasentosa Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Grasim Industreis Ltd - India
- PowerSource Philippines DevCo
- Economic Council, Georgia
- Chettinad Cement Corporation Ltd - India
- Central Electricity Authority - India
- CIMB Investment Bank - Malaysia
- Jindal Steel & Power Ltd - India
- Metalloyd Limited - United Kingdom
- MS Steel International - UAE
- Globalindo Alam Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Vedanta Resources Plc - India
- Coalindo Energy - Indonesia
- Mercator Lines Limited - India
- Coastal Gujarat Power Limited - India
- Port Waratah Coal Services - Australia
- Rashtriya Ispat Nigam Limited - India
- Kartika Selabumi Mining - Indonesia
- Larsen & Toubro Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Standard Chartered Bank - UAE
- Uttam Galva Steels Limited - India
- Banpu Public Company Limited - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Petrochimia International Co. Ltd.- Taiwan
- Posco Energy - South Korea
- TeaM Sual Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Orica Australia Pty. Ltd.
- Kohat Cement Company Ltd. - Pakistan
- PetroVietnam Power Coal Import and Supply Company
- Energy Link Ltd, New Zealand
- Mintek Dendrill Indonesia
- Semirara Mining Corp, Philippines
- Sakthi Sugars Limited - India
- Commonwealth Bank - Australia
- Salva Resources Pvt Ltd - India
- Georgia Ports Authority, United States
- Agrawal Coal Company - India
- SMC Global Power, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- SN Aboitiz Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Baramulti Group, Indonesia
- Karaikal Port Pvt Ltd - India
- Tata Chemicals Ltd - India
- Petron Corporation, Philippines
- Formosa Plastics Group - Taiwan
- McConnell Dowell - Australia
- White Energy Company Limited
- Sojitz Corporation - Japan
- Sical Logistics Limited - India
- Aboitiz Power Corporation - Philippines
- Heidelberg Cement - Germany
- Cement Manufacturers Association - India
- Jorong Barutama Greston.PT - Indonesia
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Bharathi Cement Corporation - India
- Medco Energi Mining Internasional
- Karbindo Abesyapradhi - Indoneisa
- Directorate Of Revenue Intelligence - India
- Vijayanagar Sugar Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Samtan Co., Ltd - South Korea
- Wilmar Investment Holdings
- Sinarmas Energy and Mining - Indonesia
- Electricity Generating Authority of Thailand
- Timah Investasi Mineral - Indoneisa
- LBH Netherlands Bv - Netherlands
- Kumho Petrochemical, South Korea
- Global Green Power PLC Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Sarangani Energy Corporation, Philippines
- Oldendorff Carriers - Singapore
- Orica Mining Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Meralco Power Generation, Philippines
- Planning Commission, India
- Mercuria Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tamil Nadu electricity Board
- Indo Tambangraya Megah - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Energy Development Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Bhoruka Overseas - Indonesia
- Kepco SPC Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Bhatia International Limited - India
- European Bulk Services B.V. - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Essar Steel Hazira Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Wood Mackenzie - Singapore
- San Jose City I Power Corp, Philippines
- Australian Coal Association
- Mjunction Services Limited - India
- Interocean Group of Companies - India
- Deloitte Consulting - India
- Ceylon Electricity Board - Sri Lanka
- GVK Power & Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Finance - Indonesia
- Siam City Cement PLC, Thailand
- Makarim & Taira - Indonesia
- Africa Commodities Group - South Africa
- Kapuas Tunggal Persada - Indonesia
- Sree Jayajothi Cements Limited - India
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
- Bukit Makmur.PT - Indonesia
- Price Waterhouse Coopers - Russia
- PNOC Exploration Corporation - Philippines
- Global Business Power Corporation, Philippines
- Renaissance Capital - South Africa
- Antam Resourcindo - Indonesia
- Siam City Cement - Thailand
- Manunggal Multi Energi - Indonesia
- Power Finance Corporation Ltd., India
- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
- Bangladesh Power Developement Board
- Gujarat Sidhee Cement - India
- Eastern Coal Council - USA
- Kideco Jaya Agung - Indonesia
- Independent Power Producers Association of India
- IEA Clean Coal Centre - UK
- Bukit Baiduri Energy - Indonesia
- Chamber of Mines of South Africa
- Malabar Cements Ltd - India
- Indogreen Group - Indonesia
- Singapore Mercantile Exchange
- Central Java Power - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Transport, Egypt
- Xindia Steels Limited - India
- South Luzon Thermal Energy Corporation
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Madhucon Powers Ltd - India
- Binh Thuan Hamico - Vietnam
- SMG Consultants - Indonesia
- Rio Tinto Coal - Australia
- Thai Mozambique Logistica
- Borneo Indobara - Indonesia
- London Commodity Brokers - England
- Miang Besar Coal Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Eastern Energy - Thailand
- New Zealand Coal & Carbon
- Attock Cement Pakistan Limited
- Therma Luzon, Inc, Philippines
- Altura Mining Limited, Indonesia
- Straits Asia Resources Limited - Singapore
- Savvy Resources Ltd - HongKong
- Star Paper Mills Limited - India
- Ministry of Mines - Canada
- Cigading International Bulk Terminal - Indonesia
- PTC India Limited - India
- Anglo American - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vizag Seaport Private Limited - India
- Carbofer General Trading SA - India
- Parliament of New Zealand
- Marubeni Corporation - India
- Ind-Barath Power Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Indian Energy Exchange, India
- Toyota Tsusho Corporation, Japan
- Electricity Authority, New Zealand
- Pendopo Energi Batubara - Indonesia
- Latin American Coal - Colombia
- The Treasury - Australian Government
- Indika Energy - Indonesia
- Romanian Commodities Exchange
- ASAPP Information Group - India
- Intertek Mineral Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Thiess Contractors Indonesia
- Indian Oil Corporation Limited
- Riau Bara Harum - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Parry Sugars Refinery, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhushan Steel Limited - India
- Aditya Birla Group - India
- Holcim Trading Pte Ltd - Singapore
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