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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, 12 April 17
SHIPPING MARKET INSIGHT - VASSILIS VASSILIOU
The first quarter of 2017 started relatively busy for the ship repair sector, with most of the repair facilities being nearly fully occupied till t ...
Monday, 10 April 17
THE CAPE INDEX WAS DOWN BY 16.32% WEEK OVER WEEK
COALspot.com: The Freight market was steady week over a week except for Cape. The cape index was down 16.32 percent week over week.
The Baltic ...
Friday, 07 April 17
INDONESIAN GOVERNMENT DECLARED SPOT COAL PRICES STAGE FIRST INCREASE OF THE YEAR
COALspot.com: Indonesian government declared coal benchmark price rose slightly in April, government data showed.
The benchmark price of Indon ...
Friday, 07 April 17
U.S WEEKLY COAL OUTPUT ALMOST FLAT WEEK OVER WEEK - EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 14.5 million short tons ...
Thursday, 06 April 17
PANAMAX: THE MARKET HAS CONTINUED THE FIRM SENTIMENT FROM LAST WEEK IN BOTH HEMISPHERES - FEARNLEYS
Supramax
With holidays in Asia, the week has started very slow in Pacific. Some fixtures have still been done and levels have remained quite stab ...
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- Borneo Indobara - Indonesia
- MS Steel International - UAE
- Jindal Steel & Power Ltd - India
- The Treasury - Australian Government
- Ind-Barath Power Infra Limited - India
- Larsen & Toubro Limited - India
- Kumho Petrochemical, South Korea
- Star Paper Mills Limited - India
- Aboitiz Power Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining and Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Binh Thuan Hamico - Vietnam
- Australian Commodity Traders Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Videocon Industries ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Economic Council, Georgia
- International Coal Ventures Pvt Ltd - India
- Coal and Oil Company - UAE
- Anglo American - United Kingdom
- Marubeni Corporation - India
- Xindia Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Indika Energy - Indonesia
- Lanco Infratech Ltd - India
- Latin American Coal - Colombia
- GMR Energy Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tamil Nadu electricity Board
- Kartika Selabumi Mining - Indonesia
- Tata Chemicals Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karbindo Abesyapradhi - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Finance - Indonesia
- Kobexindo Tractors - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- IHS Mccloskey Coal Group - USA
- Planning Commission, India
- Wilmar Investment Holdings
- Africa Commodities Group - South Africa
- Banpu Public Company Limited - Thailand
- Formosa Plastics Group - Taiwan
- ICICI Bank Limited - India
- Semirara Mining Corp, Philippines
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Ambuja Cements Ltd - India
- India Bulls Power Limited - India
- Bhoruka Overseas - Indonesia
- Parry Sugars Refinery, India
- GAC Shipping (India) Pvt Ltd
- Uttam Galva Steels Limited - India
- Sakthi Sugars Limited - India
- Mjunction Services Limited - India
- Port Waratah Coal Services - Australia
- The University of Queensland
- Malabar Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Medco Energi Mining Internasional
- Grasim Industreis Ltd - India
- Straits Asia Resources Limited - Singapore
- Timah Investasi Mineral - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Toyota Tsusho Corporation, Japan
- Trasteel International SA, Italy
- Siam City Cement PLC, Thailand
- VISA Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Indonesian Coal Mining Association
- Savvy Resources Ltd - HongKong
- Vedanta Resources Plc - India
- CNBM International Corporation - China
- Deloitte Consulting - India
- Global Business Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Central Electricity Authority - India
- The State Trading Corporation of India Ltd
- Edison Trading Spa - Italy
- Ministry of Mines - Canada
- Ministry of Transport, Egypt
- Wood Mackenzie - Singapore
- GVK Power & Infra Limited - India
- Chamber of Mines of South Africa
- Meralco Power Generation, Philippines
- Dalmia Cement Bharat India
- Kaltim Prima Coal - Indonesia
- ASAPP Information Group - India
- Siam City Cement - Thailand
- Sical Logistics Limited - India
- McConnell Dowell - Australia
- Alfred C Toepfer International GmbH - Germany
- Manunggal Multi Energi - Indonesia
- Attock Cement Pakistan Limited
- Rashtriya Ispat Nigam Limited - India
- Altura Mining Limited, Indonesia
- SN Aboitiz Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Indogreen Group - Indonesia
- Makarim & Taira - Indonesia
- LBH Netherlands Bv - Netherlands
- Vizag Seaport Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Agrawal Coal Company - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Georgia Ports Authority, United States
- PNOC Exploration Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Vijayanagar Sugar Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Eastern Coal Council - USA
- Australian Coal Association
- TNB Fuel Sdn Bhd - Malaysia
- Iligan Light & Power Inc, Philippines
- Goldman Sachs - Singapore
- Central Java Power - Indonesia
- Singapore Mercantile Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Antam Resourcindo - Indonesia
- Madhucon Powers Ltd - India
- Energy Link Ltd, New Zealand
- Sree Jayajothi Cements Limited - India
- Sinarmas Energy and Mining - Indonesia
- Minerals Council of Australia
- Kohat Cement Company Ltd. - Pakistan
- Bahari Cakrawala Sebuku - Indonesia
- Sarangani Energy Corporation, Philippines
- SMC Global Power, Philippines
- Petron Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Bharathi Cement Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Mercuria Energy - Indonesia
- Indian Oil Corporation Limited
- Thiess Contractors Indonesia
- Electricity Generating Authority of Thailand
- Bukit Baiduri Energy - Indonesia
- Riau Bara Harum - Indonesia
- OPG Power Generation Pvt Ltd - India
- White Energy Company Limited
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- Posco Energy - South Korea
- Indo Tambangraya Megah - Indonesia
- Therma Luzon, Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Price Waterhouse Coopers - Russia
- Global Coal Blending Company Limited - Australia
- South Luzon Thermal Energy Corporation
- SMG Consultants - Indonesia
- Intertek Mineral Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Romanian Commodities Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TeaM Sual Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Bayan Resources Tbk. - Indonesia
- Heidelberg Cement - Germany
- Merrill Lynch Commodities Europe
- Thai Mozambique Logistica
- Maharashtra Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Energy - Thailand
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Power Finance Corporation Ltd., India
- Maheswari Brothers Coal Limited - India
- Baramulti Group, Indonesia
- Bhushan Steel Limited - India
- Bhatia International Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Cement Manufacturers Association - India
- Essar Steel Hazira Ltd - India
- Coalindo Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Oldendorff Carriers - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Aditya Birla Group - India
- Gujarat Sidhee Cement - India
- Rio Tinto Coal - Australia
- Standard Chartered Bank - UAE
- Carbofer General Trading SA - India
- San Jose City I Power Corp, Philippines
- Independent Power Producers Association of India
- PowerSource Philippines DevCo
- Kideco Jaya Agung - Indonesia
- Commonwealth Bank - Australia
- PTC India Limited - India
- Mintek Dendrill Indonesia
- Leighton Contractors Pty Ltd - Australia
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Jaiprakash Power Ventures ltd
- Electricity Authority, New Zealand
- Energy Development Corp, Philippines
- London Commodity Brokers - England
- CIMB Investment Bank - Malaysia
- Renaissance Capital - South Africa
- Krishnapatnam Port Company Ltd. - India
- Bangladesh Power Developement Board
- Parliament of New Zealand
- Gujarat Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- New Zealand Coal & Carbon
- Karaikal Port Pvt Ltd - India
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