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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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Tuesday, 06 September 16
INDO GOVT. SETS SEPTEMBER COAL REFERENCE PRICE AT US$ 63.93 PER TON; JUMP 20.17% YTD
COALspot.com: The Indonesia coal benchmark price hits to its highest level since April 2015. The government declared benchmark prices f ...
Tuesday, 06 September 16
CAPESIZE: THE PACIFIC BASIN WAS THE MAIN REGION KEEPING UP WITH THE POSITIVE SUPPORT - ALLIED
Capesize
Despite some mixed feelings being seen early on in the week, we managed to see a positive week-on-week close on Friday with some positiv ...
Monday, 05 September 16
INDIA BECAME ADARO'S SECOND LARGEST MARKET IN 1H' 16
COALspot.com: The Wara Balangan blend product has been well received by customers in China and India - AI
In the second quarter of 2 ...
Monday, 05 September 16
POOR FREIGHT RATES DESPITE STRONG DEMAND GROWTH FROM CHINA - BIMCO
Demand
The dry bulk commodity imports into and exports out of China we have seen in the first half of 2016 are very positive – and nothing ...
Monday, 05 September 16
FREIGHT RATE FROM INDONESIA TO INDIA IS EXPECTED TO BE FLAT TO SOFT THIS WEEK
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities rose and ending in a positive note this past week except ...
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- PNOC Exploration Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Savvy Resources Ltd - HongKong
- Samtan Co., Ltd - South Korea
- South Luzon Thermal Energy Corporation
- Africa Commodities Group - South Africa
- CIMB Investment Bank - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Energy Development Corp, Philippines
- Antam Resourcindo - Indonesia
- Grasim Industreis Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jindal Steel & Power Ltd - India
- Bukit Makmur.PT - Indonesia
- Aditya Birla Group - India
- Posco Energy - South Korea
- Mjunction Services Limited - India
- PTC India Limited - India
- Globalindo Alam Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Ind-Barath Power Infra Limited - India
- Renaissance Capital - South Africa
- Gujarat Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Global Coal Blending Company Limited - Australia
- Riau Bara Harum - Indonesia
- Lanco Infratech Ltd - India
- Parliament of New Zealand
- Mintek Dendrill Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Australian Coal Association
- Altura Mining Limited, Indonesia
- Sindya Power Generating Company Private Ltd
- SMC Global Power, Philippines
- Directorate Of Revenue Intelligence - India
- McConnell Dowell - Australia
- Cement Manufacturers Association - India
- OPG Power Generation Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Makarim & Taira - Indonesia
- Kapuas Tunggal Persada - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Larsen & Toubro Limited - India
- Kumho Petrochemical, South Korea
- GAC Shipping (India) Pvt Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- New Zealand Coal & Carbon
- Kalimantan Lumbung Energi - Indonesia
- Baramulti Group, Indonesia
- Straits Asia Resources Limited - Singapore
- Bhushan Steel Limited - India
- Bayan Resources Tbk. - Indonesia
- Orica Australia Pty. Ltd.
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Independent Power Producers Association of India
- Barasentosa Lestari - Indonesia
- Gujarat Sidhee Cement - India
- San Jose City I Power Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Indonesian Coal Mining Association
- Dalmia Cement Bharat India
- Interocean Group of Companies - India
- Global Business Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- GMR Energy Limited - India
- Kideco Jaya Agung - Indonesia
- Sojitz Corporation - Japan
- Asmin Koalindo Tuhup - Indonesia
- Chamber of Mines of South Africa
- Wilmar Investment Holdings
- Rio Tinto Coal - Australia
- Heidelberg Cement - Germany
- TNB Fuel Sdn Bhd - Malaysia
- Sree Jayajothi Cements Limited - India
- India Bulls Power Limited - India
- Anglo American - United Kingdom
- Georgia Ports Authority, United States
- Borneo Indobara - Indonesia
- Thiess Contractors Indonesia
- Commonwealth Bank - Australia
- Bhoruka Overseas - Indonesia
- Planning Commission, India
- Ministry of Transport, Egypt
- Banpu Public Company Limited - Thailand
- VISA Power Limited - India
- Medco Energi Mining Internasional
- Bulk Trading Sa - Switzerland
- Leighton Contractors Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Holcim Trading Pte Ltd - Singapore
- Central Java Power - Indonesia
- CNBM International Corporation - China
- SN Aboitiz Power Inc, Philippines
- ICICI Bank Limited - India
- IEA Clean Coal Centre - UK
- Intertek Mineral Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Economic Council, Georgia
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- Timah Investasi Mineral - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Marubeni Corporation - India
- Karaikal Port Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- Cigading International Bulk Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Krishnapatnam Port Company Ltd. - India
- Latin American Coal - Colombia
- Minerals Council of Australia
- International Coal Ventures Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Orica Mining Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhatia International Limited - India
- Siam City Cement - Thailand
- Edison Trading Spa - Italy
- Vijayanagar Sugar Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Madhucon Powers Ltd - India
- Romanian Commodities Exchange
- Mercuria Energy - Indonesia
- Ambuja Cements Ltd - India
- White Energy Company Limited
- Price Waterhouse Coopers - Russia
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Sakthi Sugars Limited - India
- Tata Chemicals Ltd - India
- Eastern Energy - Thailand
- Jaiprakash Power Ventures ltd
- London Commodity Brokers - England
- Gujarat Mineral Development Corp Ltd - India
- MS Steel International - UAE
- Uttam Galva Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Mines - Canada
- Coalindo Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IHS Mccloskey Coal Group - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Kepco SPC Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Carbofer General Trading SA - India
- Thai Mozambique Logistica
- Sarangani Energy Corporation, Philippines
- Videocon Industries ltd - India
- Coal and Oil Company - UAE
- Xindia Steels Limited - India
- Power Finance Corporation Ltd., India
- Central Electricity Authority - India
- Tamil Nadu electricity Board
- Bangladesh Power Developement Board
- Australian Commodity Traders Exchange
- Merrill Lynch Commodities Europe
- Iligan Light & Power Inc, Philippines
- Vedanta Resources Plc - India
- Sinarmas Energy and Mining - Indonesia
- PowerSource Philippines DevCo
- Kobexindo Tractors - Indoneisa
- Mercator Lines Limited - India
- ASAPP Information Group - India
- Manunggal Multi Energi - Indonesia
- Indian Oil Corporation Limited
- Rashtriya Ispat Nigam Limited - India
- Standard Chartered Bank - UAE
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- Bukit Baiduri Energy - Indonesia
- GVK Power & Infra Limited - India
- Trasteel International SA, Italy
- Coastal Gujarat Power Limited - India
- Aboitiz Power Corporation - Philippines
- The State Trading Corporation of India Ltd
- LBH Netherlands Bv - Netherlands
- Bharathi Cement Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- Singapore Mercantile Exchange
- Formosa Plastics Group - Taiwan
- Meralco Power Generation, Philippines
- The University of Queensland
- Simpson Spence & Young - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Deloitte Consulting - India
- The Treasury - Australian Government
- Oldendorff Carriers - Singapore
- European Bulk Services B.V. - Netherlands
- Meenaskhi Energy Private Limited - India
- Parry Sugars Refinery, India
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- Ceylon Electricity Board - Sri Lanka
- TeaM Sual Corporation - Philippines
- Star Paper Mills Limited - India
- Salva Resources Pvt Ltd - India
- Agrawal Coal Company - India
- Bahari Cakrawala Sebuku - Indonesia
- Essar Steel Hazira Ltd - India
- Global Green Power PLC Corporation, Philippines
- Siam City Cement PLC, Thailand
- Attock Cement Pakistan Limited
- AsiaOL BioFuels Corp., Philippines
- Petron Corporation, Philippines
- Ministry of Finance - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- SMG Consultants - Indonesia
- Jorong Barutama Greston.PT - Indonesia
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