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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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Monday, 14 December 15
CFR SOUTH CHINA COAL SWAP IS STILL SLIDING
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery declined US$ 0.93(2.18%) per ton month over month.
A commodity swap ...
Sunday, 13 December 15
THE LOW VESSEL DEMANDS PUSHED DOWN BALTIC DRY INDEX FURTHER DOWN
COALspot.com: The low vessel demand across nearly all vessel sizes pushed the Baltic Exchange’s main sea freight index further down in this F ...
Sunday, 13 December 15
DRY BULK RATES KEEP ON FALLING AS LOW VESSEL DEMAND IS STILL THE NORM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market nowadays is in an endless downward spiral, which as it turns out is unable to recover, at least as long as the current balance ...
Friday, 11 December 15
US COAL PRODUCTION UP 7.7% IN WEEK ENDED DECEMBER 5, 2015
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 16.1 million shor ...
Thursday, 10 December 15
LIENING CARGO - WHICH LIEN CLAUSE APPLIES TO THE BILL OF LADING? : WIKBORG REIN | HELLENIC SHIPPING NEWS
KNOWLEDGE TO ELEVATE
In a dry bulk market where a charterer is not paying freight or hire, its counterparty is often left to consider whether ...
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- Goldman Sachs - Singapore
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Bulk Trading Sa - Switzerland
- Parry Sugars Refinery, India
- Coal and Oil Company - UAE
- Sarangani Energy Corporation, Philippines
- Port Waratah Coal Services - Australia
- SN Aboitiz Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Toyota Tsusho Corporation, Japan
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Oldendorff Carriers - Singapore
- Iligan Light & Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Orica Australia Pty. Ltd.
- Indogreen Group - Indonesia
- Simpson Spence & Young - Indonesia
- Attock Cement Pakistan Limited
- Bhoruka Overseas - Indonesia
- Salva Resources Pvt Ltd - India
- Madhucon Powers Ltd - India
- Marubeni Corporation - India
- Mercuria Energy - Indonesia
- Makarim & Taira - Indonesia
- CNBM International Corporation - China
- Ministry of Transport, Egypt
- Aboitiz Power Corporation - Philippines
- Agrawal Coal Company - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Trasteel International SA, Italy
- Chamber of Mines of South Africa
- Ceylon Electricity Board - Sri Lanka
- PetroVietnam Power Coal Import and Supply Company
- Edison Trading Spa - Italy
- Parliament of New Zealand
- Holcim Trading Pte Ltd - Singapore
- Ind-Barath Power Infra Limited - India
- CIMB Investment Bank - Malaysia
- Anglo American - United Kingdom
- Tamil Nadu electricity Board
- Central Java Power - Indonesia
- Australian Commodity Traders Exchange
- Orica Mining Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Maheswari Brothers Coal Limited - India
- Eastern Energy - Thailand
- Star Paper Mills Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Commonwealth Bank - Australia
- Aditya Birla Group - India
- Ambuja Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Petron Corporation, Philippines
- Energy Development Corp, Philippines
- Economic Council, Georgia
- Timah Investasi Mineral - Indoneisa
- Kaltim Prima Coal - Indonesia
- Tata Chemicals Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- Energy Link Ltd, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Merrill Lynch Commodities Europe
- Global Green Power PLC Corporation, Philippines
- Bangladesh Power Developement Board
- Interocean Group of Companies - India
- Samtan Co., Ltd - South Korea
- Mercator Lines Limited - India
- South Luzon Thermal Energy Corporation
- Leighton Contractors Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Minerals Council of Australia
- Global Coal Blending Company Limited - Australia
- Posco Energy - South Korea
- Eastern Coal Council - USA
- Formosa Plastics Group - Taiwan
- Kepco SPC Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Renaissance Capital - South Africa
- Sojitz Corporation - Japan
- GAC Shipping (India) Pvt Ltd
- Siam City Cement PLC, Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- Antam Resourcindo - Indonesia
- Kartika Selabumi Mining - Indonesia
- ASAPP Information Group - India
- Siam City Cement - Thailand
- The State Trading Corporation of India Ltd
- Bhushan Steel Limited - India
- PNOC Exploration Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- Kideco Jaya Agung - Indonesia
- Meralco Power Generation, Philippines
- Bayan Resources Tbk. - Indonesia
- Wilmar Investment Holdings
- Maharashtra Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Miang Besar Coal Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Australian Coal Association
- Manunggal Multi Energi - Indonesia
- Thai Mozambique Logistica
- Heidelberg Cement - Germany
- Riau Bara Harum - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bukit Makmur.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Rio Tinto Coal - Australia
- Essar Steel Hazira Ltd - India
- Uttam Galva Steels Limited - India
- Price Waterhouse Coopers - Russia
- Karaikal Port Pvt Ltd - India
- Ministry of Mines - Canada
- Deloitte Consulting - India
- Xindia Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Semirara Mining Corp, Philippines
- MS Steel International - UAE
- Sinarmas Energy and Mining - Indonesia
- Romanian Commodities Exchange
- Indika Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Central Electricity Authority - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Coalindo Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- GMR Energy Limited - India
- Singapore Mercantile Exchange
- Banpu Public Company Limited - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMG Consultants - Indonesia
- Indonesian Coal Mining Association
- McConnell Dowell - Australia
- Sakthi Sugars Limited - India
- Bukit Baiduri Energy - Indonesia
- Planning Commission, India
- Indo Tambangraya Megah - Indonesia
- Thiess Contractors Indonesia
- VISA Power Limited - India
- Intertek Mineral Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Independent Power Producers Association of India
- Therma Luzon, Inc, Philippines
- London Commodity Brokers - England
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- Latin American Coal - Colombia
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- IEA Clean Coal Centre - UK
- International Coal Ventures Pvt Ltd - India
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- Africa Commodities Group - South Africa
- Sree Jayajothi Cements Limited - India
- Mjunction Services Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- OPG Power Generation Pvt Ltd - India
- ICICI Bank Limited - India
- San Jose City I Power Corp, Philippines
- The University of Queensland
- GVK Power & Infra Limited - India
- Larsen & Toubro Limited - India
- Directorate Of Revenue Intelligence - India
- Coastal Gujarat Power Limited - India
- Power Finance Corporation Ltd., India
- Bahari Cakrawala Sebuku - Indonesia
- Jindal Steel & Power Ltd - India
- TeaM Sual Corporation - Philippines
- Cement Manufacturers Association - India
- Sical Logistics Limited - India
- Standard Chartered Bank - UAE
- Electricity Generating Authority of Thailand
- Alfred C Toepfer International GmbH - Germany
- White Energy Company Limited
- European Bulk Services B.V. - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- PTC India Limited - India
- IHS Mccloskey Coal Group - USA
- Medco Energi Mining Internasional
- Kobexindo Tractors - Indoneisa
- Barasentosa Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Wood Mackenzie - Singapore
- Borneo Indobara - Indonesia
- Bharathi Cement Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- Global Business Power Corporation, Philippines
- The Treasury - Australian Government
- Savvy Resources Ltd - HongKong
- Indian Oil Corporation Limited
- Videocon Industries ltd - India
- Grasim Industreis Ltd - India
- Lanco Infratech Ltd - India
- Kumho Petrochemical, South Korea
- Bhatia International Limited - India
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