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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, 05 April 17
THE AVERAGE SECOND HAND PANAMAXES AND CAPES PRICES FOR A 5-YR OLD VESSEL HAS INCREASED MORE THAN 19% AND 20% RESPECTIVELY M/M - INTERMODAL
With the help of what so far appears to be a very strong grain season together with the fact that imports from China have remained so far robust in ...
Tuesday, 04 April 17
THE IRON ORE HAS BEEN ABLE TO KEEP ITS GROWTH PATH FAIRLY WELL; THERE IS STILL ONE PART OF THE WORLD THAT IS STILL HEAVILY COMMITTED TO COAL
With the close of March having let us with a very positive after taste and having witnessed near the end of the month the Baltic Dry Index at its h ...
Monday, 03 April 17
WORLD COAL TRADE STABLE IN 2016: DEMAND SHIFTS TO SOUTH-EAST ASIA - ASSOCARBONI
ASSOCARBONI: Coal confirmed as the leading fuel for electricity generation, accounting for 40% of overall production in 2016.
World coal trade ...
Monday, 03 April 17
DRY BULK RATES CONTINUING TO FIRMING UP
COALspot.com: The Freight market was continuing to firming up. Baltic Panamax Index rose 12.81 percent week over week.
The Baltic Exchang ...
Friday, 31 March 17
U.S. COAL PRODUCTION INCREASE SLIGHTLY WEEK OVER WEEK
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 14.5 million short tons ...
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- Global Green Power PLC Corporation, Philippines
- Gujarat Sidhee Cement - India
- Power Finance Corporation Ltd., India
- Goldman Sachs - Singapore
- IEA Clean Coal Centre - UK
- Kobexindo Tractors - Indoneisa
- Mercator Lines Limited - India
- Orica Australia Pty. Ltd.
- Petrochimia International Co. Ltd.- Taiwan
- OPG Power Generation Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Manunggal Multi Energi - Indonesia
- Minerals Council of Australia
- Binh Thuan Hamico - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Orica Mining Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Standard Chartered Bank - UAE
- New Zealand Coal & Carbon
- Chamber of Mines of South Africa
- Wood Mackenzie - Singapore
- Banpu Public Company Limited - Thailand
- Mercuria Energy - Indonesia
- Economic Council, Georgia
- San Jose City I Power Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Parliament of New Zealand
- Australian Coal Association
- Ceylon Electricity Board - Sri Lanka
- Jaiprakash Power Ventures ltd
- Aboitiz Power Corporation - Philippines
- GVK Power & Infra Limited - India
- Altura Mining Limited, Indonesia
- Electricity Authority, New Zealand
- South Luzon Thermal Energy Corporation
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- Globalindo Alam Lestari - Indonesia
- Star Paper Mills Limited - India
- Sarangani Energy Corporation, Philippines
- Bhushan Steel Limited - India
- Eastern Energy - Thailand
- VISA Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Samtan Co., Ltd - South Korea
- Vedanta Resources Plc - India
- Barasentosa Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Global Coal Blending Company Limited - Australia
- Semirara Mining Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Bangladesh Power Developement Board
- Energy Development Corp, Philippines
- Ministry of Finance - Indonesia
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Africa Commodities Group - South Africa
- Bulk Trading Sa - Switzerland
- Cigading International Bulk Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- The University of Queensland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Agrawal Coal Company - India
- Georgia Ports Authority, United States
- Posco Energy - South Korea
- Siam City Cement - Thailand
- AsiaOL BioFuels Corp., Philippines
- Kartika Selabumi Mining - Indonesia
- Indika Energy - Indonesia
- Romanian Commodities Exchange
- Directorate Of Revenue Intelligence - India
- Oldendorff Carriers - Singapore
- Sojitz Corporation - Japan
- Indonesian Coal Mining Association
- Aditya Birla Group - India
- Savvy Resources Ltd - HongKong
- Malabar Cements Ltd - India
- Merrill Lynch Commodities Europe
- Intertek Mineral Services - Indonesia
- Heidelberg Cement - Germany
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dalmia Cement Bharat India
- Kumho Petrochemical, South Korea
- Independent Power Producers Association of India
- Indo Tambangraya Megah - Indonesia
- Ministry of Mines - Canada
- Kaltim Prima Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Timah Investasi Mineral - Indoneisa
- Vizag Seaport Private Limited - India
- India Bulls Power Limited - India
- Energy Link Ltd, New Zealand
- Thai Mozambique Logistica
- Eastern Coal Council - USA
- Edison Trading Spa - Italy
- Riau Bara Harum - Indonesia
- Sakthi Sugars Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Larsen & Toubro Limited - India
- Leighton Contractors Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Australian Commodity Traders Exchange
- SN Aboitiz Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Baramulti Group, Indonesia
- Mintek Dendrill Indonesia
- Grasim Industreis Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Coal and Oil Company - UAE
- Pendopo Energi Batubara - Indonesia
- Sindya Power Generating Company Private Ltd
- Maheswari Brothers Coal Limited - India
- Ministry of Transport, Egypt
- Wilmar Investment Holdings
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- Bhoruka Overseas - Indonesia
- Uttam Galva Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Port Waratah Coal Services - Australia
- Central Electricity Authority - India
- Thiess Contractors Indonesia
- Kideco Jaya Agung - Indonesia
- Ambuja Cements Ltd - India
- Coastal Gujarat Power Limited - India
- TeaM Sual Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Planning Commission, India
- Medco Energi Mining Internasional
- PTC India Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- White Energy Company Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Marubeni Corporation - India
- Latin American Coal - Colombia
- Indian Energy Exchange, India
- Commonwealth Bank - Australia
- Miang Besar Coal Terminal - Indonesia
- Meralco Power Generation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- ICICI Bank Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Antam Resourcindo - Indonesia
- London Commodity Brokers - England
- Straits Asia Resources Limited - Singapore
- Simpson Spence & Young - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Metalloyd Limited - United Kingdom
- PNOC Exploration Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- ASAPP Information Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Makmur.PT - Indonesia
- Madhucon Powers Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Electricity Generating Authority of Thailand
- Trasteel International SA, Italy
- Sree Jayajothi Cements Limited - India
- Central Java Power - Indonesia
- Bayan Resources Tbk. - Indonesia
- CIMB Investment Bank - Malaysia
- PowerSource Philippines DevCo
- Kalimantan Lumbung Energi - Indonesia
- Renaissance Capital - South Africa
- The Treasury - Australian Government
- Anglo American - United Kingdom
- IHS Mccloskey Coal Group - USA
- Bukit Baiduri Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Karbindo Abesyapradhi - Indoneisa
- Interocean Group of Companies - India
- Petron Corporation, Philippines
- CNBM International Corporation - China
- Carbofer General Trading SA - India
- Global Business Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Jindal Steel & Power Ltd - India
- Price Waterhouse Coopers - Russia
- SMG Consultants - Indonesia
- The State Trading Corporation of India Ltd
- GAC Shipping (India) Pvt Ltd
- Borneo Indobara - Indonesia
- Siam City Cement PLC, Thailand
- GMR Energy Limited - India
- Sical Logistics Limited - India
- Singapore Mercantile Exchange
- Indian Oil Corporation Limited
- McConnell Dowell - Australia
- Essar Steel Hazira Ltd - India
- Bharathi Cement Corporation - India
- Rio Tinto Coal - Australia
- Iligan Light & Power Inc, Philippines
- Xindia Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Deloitte Consulting - India
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Lanco Infratech Ltd - India
- Parry Sugars Refinery, India
- Kepco SPC Power Corporation, Philippines
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