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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, 15 July 20
CHINA'S JUNE COAL IMPORTS FALL 6.7% Y/Y ON PORT CURBS - REUTERS
China’s coal imports dropped 6.7% in June from the same period last year, as stringent import restrictions at ports impeded purchases by trad ...
Wednesday, 15 July 20
MARKET INSIGHT - INTERMODAL
The Covid-19 virus spread around the world has obviously impacted the global oil demand while the situation remains fluid. The overall constraint ...
Tuesday, 14 July 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.75 PCT - XINHUA
China Taiyuan coal transaction price index stood at 126.01 points Monday, up 0.75 percent week on week.
The index, released by China ...
Tuesday, 14 July 20
TURKEY - A CASE OF UNDECLARED BUNKER - GARD
KNOWLEDGE TO ELEVATE
Undeclared/excess bunkers can be considered a criminal act by Turkish customs officials with the ship's crew being ac ...
Monday, 13 July 20
PANAMAX: A TUMULTUOUS WEEK IN THE PANAMAX MARKET ENSURED ALL MARKETS GAINED VALUE ON THE WEEK - BALTIC BRIEFING
Capesize
This week witnessed the dreaded correction in the Capesize market, with the time charter average shedding almost 18 per cent to close ...
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- Rashtriya Ispat Nigam Limited - India
- VISA Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Sidhee Cement - India
- Sinarmas Energy and Mining - Indonesia
- PTC India Limited - India
- Binh Thuan Hamico - Vietnam
- Ministry of Mines - Canada
- Bangladesh Power Developement Board
- OPG Power Generation Pvt Ltd - India
- Tamil Nadu electricity Board
- Heidelberg Cement - Germany
- Videocon Industries ltd - India
- Meenaskhi Energy Private Limited - India
- CNBM International Corporation - China
- Thai Mozambique Logistica
- Agrawal Coal Company - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
- Sree Jayajothi Cements Limited - India
- Kepco SPC Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Holcim Trading Pte Ltd - Singapore
- Electricity Generating Authority of Thailand
- Interocean Group of Companies - India
- South Luzon Thermal Energy Corporation
- Kartika Selabumi Mining - Indonesia
- Electricity Authority, New Zealand
- Uttam Galva Steels Limited - India
- Aditya Birla Group - India
- Independent Power Producers Association of India
- Global Coal Blending Company Limited - Australia
- Kobexindo Tractors - Indoneisa
- PNOC Exploration Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Attock Cement Pakistan Limited
- Petrochimia International Co. Ltd.- Taiwan
- Trasteel International SA, Italy
- Sojitz Corporation - Japan
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Xindia Steels Limited - India
- MS Steel International - UAE
- Australian Coal Association
- Siam City Cement - Thailand
- Baramulti Group, Indonesia
- Parliament of New Zealand
- Global Business Power Corporation, Philippines
- Standard Chartered Bank - UAE
- GAC Shipping (India) Pvt Ltd
- IEA Clean Coal Centre - UK
- SN Aboitiz Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- European Bulk Services B.V. - Netherlands
- AsiaOL BioFuels Corp., Philippines
- The Treasury - Australian Government
- Therma Luzon, Inc, Philippines
- Ambuja Cements Ltd - India
- Siam City Cement PLC, Thailand
- Wilmar Investment Holdings
- Madhucon Powers Ltd - India
- White Energy Company Limited
- Jindal Steel & Power Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Romanian Commodities Exchange
- San Jose City I Power Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Kumho Petrochemical, South Korea
- Kapuas Tunggal Persada - Indonesia
- Mercuria Energy - Indonesia
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- New Zealand Coal & Carbon
- Krishnapatnam Port Company Ltd. - India
- Bhushan Steel Limited - India
- Grasim Industreis Ltd - India
- Iligan Light & Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Georgia Ports Authority, United States
- Eastern Coal Council - USA
- Pendopo Energi Batubara - Indonesia
- Sical Logistics Limited - India
- Indogreen Group - Indonesia
- GMR Energy Limited - India
- Simpson Spence & Young - Indonesia
- Thiess Contractors Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Toyota Tsusho Corporation, Japan
- Antam Resourcindo - Indonesia
- Port Waratah Coal Services - Australia
- Barasentosa Lestari - Indonesia
- Wood Mackenzie - Singapore
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Link Ltd, New Zealand
- The University of Queensland
- The State Trading Corporation of India Ltd
- Directorate Of Revenue Intelligence - India
- Merrill Lynch Commodities Europe
- Coal and Oil Company - UAE
- Bayan Resources Tbk. - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Lanco Infratech Ltd - India
- Edison Trading Spa - Italy
- SMC Global Power, Philippines
- Latin American Coal - Colombia
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Sakthi Sugars Limited - India
- Timah Investasi Mineral - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Malabar Cements Ltd - India
- Parry Sugars Refinery, India
- Anglo American - United Kingdom
- Economic Council, Georgia
- Semirara Mining Corp, Philippines
- Formosa Plastics Group - Taiwan
- Bukit Baiduri Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Ministry of Transport, Egypt
- India Bulls Power Limited - India
- Energy Development Corp, Philippines
- Jaiprakash Power Ventures ltd
- Savvy Resources Ltd - HongKong
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- Central Java Power - Indonesia
- Marubeni Corporation - India
- Africa Commodities Group - South Africa
- Chamber of Mines of South Africa
- TeaM Sual Corporation - Philippines
- Borneo Indobara - Indonesia
- Larsen & Toubro Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Star Paper Mills Limited - India
- Metalloyd Limited - United Kingdom
- Sindya Power Generating Company Private Ltd
- Leighton Contractors Pty Ltd - Australia
- Eastern Energy - Thailand
- Mercator Lines Limited - India
- Australian Commodity Traders Exchange
- Bharathi Cement Corporation - India
- Bulk Trading Sa - Switzerland
- Billiton Holdings Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Salva Resources Pvt Ltd - India
- Commonwealth Bank - Australia
- Cement Manufacturers Association - India
- Kaltim Prima Coal - Indonesia
- London Commodity Brokers - England
- PetroVietnam Power Coal Import and Supply Company
- Coalindo Energy - Indonesia
- Medco Energi Mining Internasional
- Bukit Makmur.PT - Indonesia
- Mintek Dendrill Indonesia
- Samtan Co., Ltd - South Korea
- Aboitiz Power Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Orica Mining Services - Indonesia
- Riau Bara Harum - Indonesia
- CIMB Investment Bank - Malaysia
- ICICI Bank Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- Singapore Mercantile Exchange
- Price Waterhouse Coopers - Russia
- Intertek Mineral Services - Indonesia
- Minerals Council of Australia
- SMG Consultants - Indonesia
- Manunggal Multi Energi - Indonesia
- Indian Energy Exchange, India
- Oldendorff Carriers - Singapore
- Vizag Seaport Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- GVK Power & Infra Limited - India
- Ministry of Finance - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Power Finance Corporation Ltd., India
- Meralco Power Generation, Philippines
- Indian Oil Corporation Limited
- Straits Asia Resources Limited - Singapore
- Rio Tinto Coal - Australia
- IHS Mccloskey Coal Group - USA
- Indo Tambangraya Megah - Indonesia
- Planning Commission, India
- Indika Energy - Indonesia
- Carbofer General Trading SA - India
- Gujarat Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Essar Steel Hazira Ltd - India
- Posco Energy - South Korea
- Central Electricity Authority - India
- Pipit Mutiara Jaya. PT, Indonesia
- LBH Netherlands Bv - Netherlands
- Petron Corporation, Philippines
- Bhatia International Limited - India
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