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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, 17 February 16
TAP ON OPPORTUNITIES IN GROWING ELECTRICITY DEMAND AND NEW COAL POWER PROJECT DEVELOPMENTS IN THE PHILIPPINES - IBC
Tap on Opportunities in Growing Electricity Demand and New Coal Power Project Developments in the Philippines
Coal Power Generation 2016
19- ...
Wednesday, 17 February 16
THE OWNERS FACING HISTORICAL LOW DRY BULK RATES; COAL IMPORTS TO CHINA IS STILL POINTING TO A STRONG TREND OF DECLINING CONSUMPTION
The sharp fall in dry bulk rates that has been taking place since the end of last year and has left owners facing historical low rates for a substa ...
Monday, 15 February 16
CALL THE DOCTOR! SHIPPING'S MEDICAL DRAMA UNFOLDS......- CLARKSONS
The recycling market has started 2016 with a bang, with a huge volume of tonnage heading to demolition facilities. Many of the key shipping markets ...
Monday, 15 February 16
CS 42 COAL INDEX ROSE 0.07% WEEK OVER WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 0.15 percent week over week to averaging $38.96 per ton on this past Friday, ...
Monday, 15 February 16
BALTIC INDEX MARGINALLY ROSE BY A POINT D-D; CAPESIZE INDEX DOWN 13 POINTS W-W; PANAMAX INDEX UP 29 POINTS W-W
COALspot.com: The freight markets continued to fall this past week.
The BDI, The Baltic Dry Index (BDI) of dry-bulk shipping freights, a measu ...
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Finance - Indonesia
- CIMB Investment Bank - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kaltim Prima Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Port Waratah Coal Services - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- The Treasury - Australian Government
- Bhushan Steel Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Savvy Resources Ltd - HongKong
- Bharathi Cement Corporation - India
- The State Trading Corporation of India Ltd
- Commonwealth Bank - Australia
- Salva Resources Pvt Ltd - India
- Marubeni Corporation - India
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- Indo Tambangraya Megah - Indonesia
- Madhucon Powers Ltd - India
- Simpson Spence & Young - Indonesia
- Orica Australia Pty. Ltd.
- Semirara Mining Corp, Philippines
- Parry Sugars Refinery, India
- Sindya Power Generating Company Private Ltd
- Minerals Council of Australia
- Antam Resourcindo - Indonesia
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- Vedanta Resources Plc - India
- Maharashtra Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Chamber of Mines of South Africa
- Rio Tinto Coal - Australia
- Eastern Energy - Thailand
- Sree Jayajothi Cements Limited - India
- Metalloyd Limited - United Kingdom
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
- Essar Steel Hazira Ltd - India
- Coastal Gujarat Power Limited - India
- Ministry of Transport, Egypt
- Kumho Petrochemical, South Korea
- Bangladesh Power Developement Board
- Romanian Commodities Exchange
- Makarim & Taira - Indonesia
- Riau Bara Harum - Indonesia
- Edison Trading Spa - Italy
- Thiess Contractors Indonesia
- New Zealand Coal & Carbon
- Maheswari Brothers Coal Limited - India
- PNOC Exploration Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Sical Logistics Limited - India
- Grasim Industreis Ltd - India
- Lanco Infratech Ltd - India
- GAC Shipping (India) Pvt Ltd
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- Star Paper Mills Limited - India
- Dalmia Cement Bharat India
- Australian Coal Association
- Economic Council, Georgia
- Ministry of Mines - Canada
- Energy Development Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Trasteel International SA, Italy
- Borneo Indobara - Indonesia
- Goldman Sachs - Singapore
- Directorate Of Revenue Intelligence - India
- Binh Thuan Hamico - Vietnam
- Central Electricity Authority - India
- Kepco SPC Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Globalindo Alam Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Sidhee Cement - India
- Xindia Steels Limited - India
- Jindal Steel & Power Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Wilmar Investment Holdings
- Malabar Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sojitz Corporation - Japan
- Independent Power Producers Association of India
- GMR Energy Limited - India
- CNBM International Corporation - China
- Gujarat Mineral Development Corp Ltd - India
- Tata Chemicals Ltd - India
- Merrill Lynch Commodities Europe
- PTC India Limited - India
- Alfred C Toepfer International GmbH - Germany
- Orica Mining Services - Indonesia
- Power Finance Corporation Ltd., India
- ICICI Bank Limited - India
- Indika Energy - Indonesia
- Indian Energy Exchange, India
- Thai Mozambique Logistica
- Asmin Koalindo Tuhup - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Planning Commission, India
- Mercator Lines Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Deloitte Consulting - India
- India Bulls Power Limited - India
- South Luzon Thermal Energy Corporation
- Bukit Baiduri Energy - Indonesia
- Coal and Oil Company - UAE
- Oldendorff Carriers - Singapore
- Kapuas Tunggal Persada - Indonesia
- Electricity Authority, New Zealand
- Posco Energy - South Korea
- Carbofer General Trading SA - India
- International Coal Ventures Pvt Ltd - India
- Altura Mining Limited, Indonesia
- The University of Queensland
- Bhoruka Overseas - Indonesia
- Mercuria Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- ASAPP Information Group - India
- Manunggal Multi Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- PowerSource Philippines DevCo
- Central Java Power - Indonesia
- Bulk Trading Sa - Switzerland
- Barasentosa Lestari - Indonesia
- Videocon Industries ltd - India
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- Iligan Light & Power Inc, Philippines
- Anglo American - United Kingdom
- IHS Mccloskey Coal Group - USA
- Aditya Birla Group - India
- TeaM Sual Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Attock Cement Pakistan Limited
- Intertek Mineral Services - Indonesia
- Ambuja Cements Ltd - India
- Renaissance Capital - South Africa
- LBH Netherlands Bv - Netherlands
- Kobexindo Tractors - Indoneisa
- Larsen & Toubro Limited - India
- Karaikal Port Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Cement Manufacturers Association - India
- Cigading International Bulk Terminal - Indonesia
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- Sarangani Energy Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Interocean Group of Companies - India
- Kideco Jaya Agung - Indonesia
- SMG Consultants - Indonesia
- Banpu Public Company Limited - Thailand
- San Jose City I Power Corp, Philippines
- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- MS Steel International - UAE
- PetroVietnam Power Coal Import and Supply Company
- Rashtriya Ispat Nigam Limited - India
- Straits Asia Resources Limited - Singapore
- Sinarmas Energy and Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Agrawal Coal Company - India
- Sakthi Sugars Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Georgia Ports Authority, United States
- Meralco Power Generation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Chettinad Cement Corporation Ltd - India
- White Energy Company Limited
- Formosa Plastics Group - Taiwan
- Aboitiz Power Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Heidelberg Cement - Germany
- Mjunction Services Limited - India
- Pendopo Energi Batubara - Indonesia
- Indogreen Group - Indonesia
- Vizag Seaport Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Therma Luzon, Inc, Philippines
- Standard Chartered Bank - UAE
- Siam City Cement PLC, Thailand
- Karbindo Abesyapradhi - Indoneisa
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- Bhatia International Limited - India
- SMC Global Power, Philippines
- Australian Commodity Traders Exchange
- GVK Power & Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Parliament of New Zealand
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