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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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Friday, 28 April 17
U.S PRODUCED LESS COAL THIS PAST WEEK COMPARED TO THE PREVIOUS WEEK - EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 14 million short tons ( ...
Friday, 28 April 17
DELTA DUNIA RECORDED $24 MILLION NET PROFIT FOR FIRST QUARTER OF 2017; UP 700% Y/Y
COALspot.com: PT Delta Dunia Makmur Tbk. has announced its financial results for the first quarter of 2017 yesterday. According to the ...
Thursday, 27 April 17
PACIFIC IS SOFTENING WITH MORE TONNAGE OPENING AND LESS COAL ORDERS AROUND - FEARNLEYS
Supramax
Relatively slow week, with both basins showing signs of cooling down. Although grain cargoes out ECSA and ECCA on Ultras still delivered ...
Wednesday, 26 April 17
IRON ORE PRICES HAVE BEEN ON A ROLLERCOASTER RIDE OVER THE LAST MONTH - CHRISTOPHER WHITTY
Iron ore prices have been on a rollercoaster ride over the last month. Prices started the year on a very positive note, surging up to their highest ...
Tuesday, 25 April 17
FIONA POUNDS: VALID TENDER OF NOTICE OF READINESS
KNOWLEDGE TO ELEVATE
In the recent English High Court case of MV Arundel Castle1, the Judge ruled that a vessel, that could not immediately pr ...
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- Globalindo Alam Lestari - Indonesia
- Tata Chemicals Ltd - India
- Africa Commodities Group - South Africa
- Sakthi Sugars Limited - India
- Kideco Jaya Agung - Indonesia
- Timah Investasi Mineral - Indoneisa
- PNOC Exploration Corporation - Philippines
- Uttam Galva Steels Limited - India
- Indian Oil Corporation Limited
- Tamil Nadu electricity Board
- Xindia Steels Limited - India
- Samtan Co., Ltd - South Korea
- PowerSource Philippines DevCo
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- GVK Power & Infra Limited - India
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
- Jindal Steel & Power Ltd - India
- Rio Tinto Coal - Australia
- Georgia Ports Authority, United States
- Indonesian Coal Mining Association
- Kaltim Prima Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Goldman Sachs - Singapore
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Agrawal Coal Company - India
- Wilmar Investment Holdings
- Karaikal Port Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- TeaM Sual Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Commodity Traders Exchange
- The University of Queensland
- Bukit Makmur.PT - Indonesia
- Anglo American - United Kingdom
- Meralco Power Generation, Philippines
- Altura Mining Limited, Indonesia
- Antam Resourcindo - Indonesia
- Sical Logistics Limited - India
- Energy Link Ltd, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Medco Energi Mining Internasional
- LBH Netherlands Bv - Netherlands
- Port Waratah Coal Services - Australia
- Kartika Selabumi Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Orica Australia Pty. Ltd.
- Vizag Seaport Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Rashtriya Ispat Nigam Limited - India
- Madhucon Powers Ltd - India
- SN Aboitiz Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GMR Energy Limited - India
- Ind-Barath Power Infra Limited - India
- Vedanta Resources Plc - India
- Jaiprakash Power Ventures ltd
- Economic Council, Georgia
- Power Finance Corporation Ltd., India
- Cement Manufacturers Association - India
- Gujarat Sidhee Cement - India
- Parliament of New Zealand
- Straits Asia Resources Limited - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Savvy Resources Ltd - HongKong
- Directorate Of Revenue Intelligence - India
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- OPG Power Generation Pvt Ltd - India
- Mercuria Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Videocon Industries ltd - India
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- Carbofer General Trading SA - India
- Aboitiz Power Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Heidelberg Cement - Germany
- Ministry of Mines - Canada
- Deloitte Consulting - India
- CNBM International Corporation - China
- Merrill Lynch Commodities Europe
- Coastal Gujarat Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Central Electricity Authority - India
- Renaissance Capital - South Africa
- Minerals Council of Australia
- Thiess Contractors Indonesia
- CIMB Investment Bank - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Indian Energy Exchange, India
- GN Power Mariveles Coal Plant, Philippines
- Banpu Public Company Limited - Thailand
- Orica Mining Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Ministry of Transport, Egypt
- Directorate General of MIneral and Coal - Indonesia
- Star Paper Mills Limited - India
- Ambuja Cements Ltd - India
- Oldendorff Carriers - Singapore
- Bayan Resources Tbk. - Indonesia
- Bukit Baiduri Energy - Indonesia
- Electricity Authority, New Zealand
- Parry Sugars Refinery, India
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- Mintek Dendrill Indonesia
- Sinarmas Energy and Mining - Indonesia
- Indogreen Group - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Planning Commission, India
- Kohat Cement Company Ltd. - Pakistan
- Central Java Power - Indonesia
- Manunggal Multi Energi - Indonesia
- Sojitz Corporation - Japan
- Electricity Generating Authority of Thailand
- Energy Development Corp, Philippines
- Barasentosa Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Dalmia Cement Bharat India
- Kumho Petrochemical, South Korea
- Indika Energy - Indonesia
- Bhushan Steel Limited - India
- Meenaskhi Energy Private Limited - India
- Maheswari Brothers Coal Limited - India
- Holcim Trading Pte Ltd - Singapore
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- Ministry of Finance - Indonesia
- Binh Thuan Hamico - Vietnam
- Thai Mozambique Logistica
- South Luzon Thermal Energy Corporation
- Eastern Energy - Thailand
- Coal and Oil Company - UAE
- Aditya Birla Group - India
- Sree Jayajothi Cements Limited - India
- India Bulls Power Limited - India
- Petron Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- The Treasury - Australian Government
- London Commodity Brokers - England
- Siam City Cement PLC, Thailand
- Leighton Contractors Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- ASAPP Information Group - India
- Latin American Coal - Colombia
- International Coal Ventures Pvt Ltd - India
- Malabar Cements Ltd - India
- Metalloyd Limited - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Bhoruka Overseas - Indonesia
- Bharathi Cement Corporation - India
- Interocean Group of Companies - India
- Kepco SPC Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- The State Trading Corporation of India Ltd
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- Eastern Coal Council - USA
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining Corp, Philippines
- SMC Global Power, Philippines
- Bulk Trading Sa - Switzerland
- Coalindo Energy - Indonesia
- Mercator Lines Limited - India
- Jorong Barutama Greston.PT - Indonesia
- PTC India Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Larsen & Toubro Limited - India
- Formosa Plastics Group - Taiwan
- Simpson Spence & Young - Indonesia
- Kobexindo Tractors - Indoneisa
- McConnell Dowell - Australia
- New Zealand Coal & Carbon
- San Jose City I Power Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Riau Bara Harum - Indonesia
- Edison Trading Spa - Italy
- Iligan Light & Power Inc, Philippines
- Australian Coal Association
- Krishnapatnam Port Company Ltd. - India
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- Borneo Indobara - Indonesia
- Singapore Mercantile Exchange
- Marubeni Corporation - India
- IHS Mccloskey Coal Group - USA
- Chettinad Cement Corporation Ltd - India
- Global Business Power Corporation, Philippines
- MS Steel International - UAE
- Mjunction Services Limited - India
- Independent Power Producers Association of India
- Romanian Commodities Exchange
- Trasteel International SA, Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- Bhatia International Limited - India
- Lanco Infratech Ltd - India
- GAC Shipping (India) Pvt Ltd
- European Bulk Services B.V. - Netherlands
- Commonwealth Bank - Australia
- Bangladesh Power Developement Board
- Baramulti Group, Indonesia
- Toyota Tsusho Corporation, Japan
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