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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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Saturday, 18 January 20
BIMCO: LOW-SULPHUR FUEL SALE JUMPS TO A 70% SHARE IN SINGAPORE, AS THE IMO 2020 SULPHUR CAP KICKS IN
The final quarter of 2019 marked a massive decline of HSFO sales, as the industry transitioned into compliance of the IMO 2020 Sulphur Cap (IMO2020 ...
Saturday, 18 January 20
GERMAN STEAM COAL IMPORTS IN 2019 PLUMMETED BY 17 % - COAL IMPORTERS ASSOCIATION
Press Release: According to preliminary calculations by the German Coal Importers Association (Verein der Kohlenimporteure e. V.), world trade in h ...
Saturday, 18 January 20
A 61,400 DWT FIXED FROM SOUTH EAST ASIA DELIVERY EAST KALIMANTAN REDELIVERY WEST COAST INDIA IN THE LOW $7,000S - BALTIC BRIEFING
Capesize
The market was relatively stable over this past week putting an end to the past months of more extreme declines. While the Capesize 5T ...
Friday, 17 January 20
EIA ESTIMATES THAT U.S. COAL PRODUCTION DECLINED BY 65 MMST (9%) TO 690 MMST IN 2019. IN 2020, COAL PRODUCTION WILL DECLINE BY A FURTHER 14% TO 597 MMST
U.S. Coal Supply.
EIA estimates that U.S. coal production declined by 65 million short tons (MMst) (9%) to 690 MMst in 2019. In 2020, EIA ...
Friday, 17 January 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index, a gauge of coal p ...
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- Xindia Steels Limited - India
- Chamber of Mines of South Africa
- Kideco Jaya Agung - Indonesia
- Cement Manufacturers Association - India
- Simpson Spence & Young - Indonesia
- Tata Chemicals Ltd - India
- International Coal Ventures Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bharathi Cement Corporation - India
- Indogreen Group - Indonesia
- Binh Thuan Hamico - Vietnam
- Coastal Gujarat Power Limited - India
- Power Finance Corporation Ltd., India
- South Luzon Thermal Energy Corporation
- Borneo Indobara - Indonesia
- ASAPP Information Group - India
- The University of Queensland
- GN Power Mariveles Coal Plant, Philippines
- Heidelberg Cement - Germany
- Australian Commodity Traders Exchange
- Kepco SPC Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Thiess Contractors Indonesia
- SN Aboitiz Power Inc, Philippines
- Attock Cement Pakistan Limited
- Samtan Co., Ltd - South Korea
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- Bukit Asam (Persero) Tbk - Indonesia
- Baramulti Group, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- TeaM Sual Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Sree Jayajothi Cements Limited - India
- CNBM International Corporation - China
- Renaissance Capital - South Africa
- Marubeni Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- Karaikal Port Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Parliament of New Zealand
- Videocon Industries ltd - India
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- Singapore Mercantile Exchange
- Sarangani Energy Corporation, Philippines
- Gujarat Sidhee Cement - India
- Siam City Cement PLC, Thailand
- Rio Tinto Coal - Australia
- Oldendorff Carriers - Singapore
- Maheswari Brothers Coal Limited - India
- Semirara Mining and Power Corporation, Philippines
- Sojitz Corporation - Japan
- Central Electricity Authority - India
- Meralco Power Generation, Philippines
- SMG Consultants - Indonesia
- Star Paper Mills Limited - India
- Metalloyd Limited - United Kingdom
- Anglo American - United Kingdom
- Romanian Commodities Exchange
- Ind-Barath Power Infra Limited - India
- Vizag Seaport Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Indian Oil Corporation Limited
- Maharashtra Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Kobexindo Tractors - Indoneisa
- GMR Energy Limited - India
- Aboitiz Power Corporation - Philippines
- Energy Link Ltd, New Zealand
- LBH Netherlands Bv - Netherlands
- GAC Shipping (India) Pvt Ltd
- Kumho Petrochemical, South Korea
- Semirara Mining Corp, Philippines
- Petron Corporation, Philippines
- Mercuria Energy - Indonesia
- Standard Chartered Bank - UAE
- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
- Deloitte Consulting - India
- Billiton Holdings Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- Formosa Plastics Group - Taiwan
- Indika Energy - Indonesia
- Central Java Power - Indonesia
- Bhoruka Overseas - Indonesia
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- Indonesian Coal Mining Association
- TNB Fuel Sdn Bhd - Malaysia
- ICICI Bank Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Intertek Mineral Services - Indonesia
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Mercator Lines Limited - India
- Lanco Infratech Ltd - India
- Madhucon Powers Ltd - India
- Price Waterhouse Coopers - Russia
- Bank of Tokyo Mitsubishi UFJ Ltd
- The Treasury - Australian Government
- London Commodity Brokers - England
- Economic Council, Georgia
- Essar Steel Hazira Ltd - India
- Bhatia International Limited - India
- Electricity Authority, New Zealand
- Pendopo Energi Batubara - Indonesia
- Riau Bara Harum - Indonesia
- Goldman Sachs - Singapore
- Port Waratah Coal Services - Australia
- CIMB Investment Bank - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Larsen & Toubro Limited - India
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- Directorate Of Revenue Intelligence - India
- Neyveli Lignite Corporation Ltd, - India
- Orica Mining Services - Indonesia
- White Energy Company Limited
- Wood Mackenzie - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wilmar Investment Holdings
- Bangladesh Power Developement Board
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- Directorate General of MIneral and Coal - Indonesia
- IEA Clean Coal Centre - UK
- Tamil Nadu electricity Board
- Globalindo Alam Lestari - Indonesia
- PowerSource Philippines DevCo
- Alfred C Toepfer International GmbH - Germany
- Altura Mining Limited, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Barasentosa Lestari - Indonesia
- Posco Energy - South Korea
- Medco Energi Mining Internasional
- Salva Resources Pvt Ltd - India
- Mjunction Services Limited - India
- Eastern Coal Council - USA
- Bhushan Steel Limited - India
- Africa Commodities Group - South Africa
- Rashtriya Ispat Nigam Limited - India
- Jindal Steel & Power Ltd - India
- Therma Luzon, Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Mintek Dendrill Indonesia
- Ministry of Finance - Indonesia
- MS Steel International - UAE
- Antam Resourcindo - Indonesia
- Trasteel International SA, Italy
- Kaltim Prima Coal - Indonesia
- Sakthi Sugars Limited - India
- Independent Power Producers Association of India
- Indo Tambangraya Megah - Indonesia
- Makarim & Taira - Indonesia
- PNOC Exploration Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Timah Investasi Mineral - Indoneisa
- Global Coal Blending Company Limited - Australia
- Ambuja Cements Ltd - India
- India Bulls Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Ministry of Mines - Canada
- GVK Power & Infra Limited - India
- Uttam Galva Steels Limited - India
- Planning Commission, India
- Kartika Selabumi Mining - Indonesia
- Commonwealth Bank - Australia
- Coalindo Energy - Indonesia
- Thai Mozambique Logistica
- Eastern Energy - Thailand
- Aditya Birla Group - India
- AsiaOL BioFuels Corp., Philippines
- PetroVietnam Power Coal Import and Supply Company
- Minerals Council of Australia
- Indian Energy Exchange, India
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
- PTC India Limited - India
- Savvy Resources Ltd - HongKong
- Karbindo Abesyapradhi - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Global Green Power PLC Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Jorong Barutama Greston.PT - Indonesia
- Electricity Generating Authority of Thailand
- The State Trading Corporation of India Ltd
- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- Carbofer General Trading SA - India
- Grasim Industreis Ltd - India
- Toyota Tsusho Corporation, Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Malabar Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- Energy Development Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kalimantan Lumbung Energi - Indonesia
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- SMC Global Power, Philippines
- Sical Logistics Limited - India
- Edison Trading Spa - Italy
- Iligan Light & Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- Gujarat Mineral Development Corp Ltd - India
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