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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, 09 September 19
ULTRAMAX: ASIA A 58,000-TONNER FIXED DELIVERY FUZHOU, VIA INDONESIA, REDELIVERY CHINA, AT $12,800
Capesize
0px The market reached new heights this week as the 5TC topped $38,014, a level not seen in the sector since 2013. Fridays 5TC closed ...
Wednesday, 04 September 19
SHIPPING MARKET INSIGHT - INTERMODAL
For yet another time, the market seems to have its own drivers. After a very disappointing first half, the recent recovery in the shipping market i ...
Tuesday, 20 August 19
NORDEN HAS BEEN AWARDED A 3-YEAR CONTRACT FOR THE TRANSPORTATION OF COAL FROM INDONESIA TO HONG KONG
NORDEN has been awarded a 3-year contract with a power company in Hong Kong for the transportation of coal from Indonesia to Hong Kong.
...
Tuesday, 20 August 19
THE AUGUST 2019 INDONESIAN COAL PRICE REFERENCE POSTS THE FIRST MONTHLY GAIN SINCE AUGUST 2018
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised up the benchmark price of Indonesian thermal co ...
Monday, 19 August 19
INDONESIAN COAL RUNS, A 82,000DWT SHIP WAS FIXED DELIVERY CHINA VIA INDONESIA, REDELIVERY JAPAN, IN THE MID $16,000S - BALTIC BRIEFING
Capesize
The Capesize market was buoyant in both basins this week, posting gains across the board. After bottoming out the previous week, rates ...
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- McConnell Dowell - Australia
- CIMB Investment Bank - Malaysia
- Attock Cement Pakistan Limited
- Posco Energy - South Korea
- Cement Manufacturers Association - India
- MS Steel International - UAE
- Standard Chartered Bank - UAE
- Globalindo Alam Lestari - Indonesia
- Semirara Mining Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Cigading International Bulk Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- Merrill Lynch Commodities Europe
- San Jose City I Power Corp, Philippines
- Gujarat Sidhee Cement - India
- Central Java Power - Indonesia
- Aditya Birla Group - India
- Manunggal Multi Energi - Indonesia
- Wilmar Investment Holdings
- Oldendorff Carriers - Singapore
- Kideco Jaya Agung - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Global Coal Blending Company Limited - Australia
- Makarim & Taira - Indonesia
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- Toyota Tsusho Corporation, Japan
- Goldman Sachs - Singapore
- Karaikal Port Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Larsen & Toubro Limited - India
- Star Paper Mills Limited - India
- Orica Australia Pty. Ltd.
- Georgia Ports Authority, United States
- Marubeni Corporation - India
- Chamber of Mines of South Africa
- Planning Commission, India
- Economic Council, Georgia
- Malabar Cements Ltd - India
- Videocon Industries ltd - India
- Agrawal Coal Company - India
- VISA Power Limited - India
- Thai Mozambique Logistica
- Renaissance Capital - South Africa
- Bukit Makmur.PT - Indonesia
- SMG Consultants - Indonesia
- Therma Luzon, Inc, Philippines
- Mjunction Services Limited - India
- Wood Mackenzie - Singapore
- Ministry of Transport, Egypt
- Ambuja Cements Ltd - India
- Vedanta Resources Plc - India
- Parliament of New Zealand
- India Bulls Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Meenaskhi Energy Private Limited - India
- ASAPP Information Group - India
- White Energy Company Limited
- Eastern Energy - Thailand
- PNOC Exploration Corporation - Philippines
- Tata Chemicals Ltd - India
- Australian Commodity Traders Exchange
- Kepco SPC Power Corporation, Philippines
- Bhatia International Limited - India
- Kartika Selabumi Mining - Indonesia
- Indian Energy Exchange, India
- Uttam Galva Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Samtan Co., Ltd - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhushan Steel Limited - India
- Energy Development Corp, Philippines
- Sojitz Corporation - Japan
- Interocean Group of Companies - India
- Power Finance Corporation Ltd., India
- Antam Resourcindo - Indonesia
- Romanian Commodities Exchange
- Karbindo Abesyapradhi - Indoneisa
- Electricity Authority, New Zealand
- Lanco Infratech Ltd - India
- PowerSource Philippines DevCo
- Medco Energi Mining Internasional
- Coal and Oil Company - UAE
- Mercator Lines Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- PTC India Limited - India
- Formosa Plastics Group - Taiwan
- South Luzon Thermal Energy Corporation
- Vizag Seaport Private Limited - India
- Sakthi Sugars Limited - India
- Baramulti Group, Indonesia
- Global Business Power Corporation, Philippines
- Bangladesh Power Developement Board
- Borneo Indobara - Indonesia
- Commonwealth Bank - Australia
- Jaiprakash Power Ventures ltd
- Bayan Resources Tbk. - Indonesia
- Iligan Light & Power Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Australian Coal Association
- Anglo American - United Kingdom
- Petron Corporation, Philippines
- Indonesian Coal Mining Association
- Bharathi Cement Corporation - India
- OPG Power Generation Pvt Ltd - India
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- Central Electricity Authority - India
- Indika Energy - Indonesia
- Carbofer General Trading SA - India
- Kobexindo Tractors - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Intertek Mineral Services - Indonesia
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Timah Investasi Mineral - Indoneisa
- Bulk Trading Sa - Switzerland
- Simpson Spence & Young - Indonesia
- Sinarmas Energy and Mining - Indonesia
- IEA Clean Coal Centre - UK
- GAC Shipping (India) Pvt Ltd
- Minerals Council of Australia
- Kohat Cement Company Ltd. - Pakistan
- The Treasury - Australian Government
- Sindya Power Generating Company Private Ltd
- The University of Queensland
- Alfred C Toepfer International GmbH - Germany
- Global Green Power PLC Corporation, Philippines
- Mintek Dendrill Indonesia
- Latin American Coal - Colombia
- Coastal Gujarat Power Limited - India
- Binh Thuan Hamico - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Mines - Canada
- LBH Netherlands Bv - Netherlands
- Edison Trading Spa - Italy
- CNBM International Corporation - China
- Straits Asia Resources Limited - Singapore
- Salva Resources Pvt Ltd - India
- SMC Global Power, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Xindia Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Trasteel International SA, Italy
- Chettinad Cement Corporation Ltd - India
- ICICI Bank Limited - India
- Semirara Mining and Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Oil Corporation Limited
- Indogreen Group - Indonesia
- Bukit Baiduri Energy - Indonesia
- Parry Sugars Refinery, India
- London Commodity Brokers - England
- Jorong Barutama Greston.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Banpu Public Company Limited - Thailand
- Billiton Holdings Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- The State Trading Corporation of India Ltd
- Metalloyd Limited - United Kingdom
- Tamil Nadu electricity Board
- Essar Steel Hazira Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Singapore Mercantile Exchange
- Siam City Cement PLC, Thailand
- Orica Mining Services - Indonesia
- Deloitte Consulting - India
- Price Waterhouse Coopers - Russia
- Mercuria Energy - Indonesia
- Kumho Petrochemical, South Korea
- Altura Mining Limited, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Africa Commodities Group - South Africa
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- Independent Power Producers Association of India
- Coalindo Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Port Waratah Coal Services - Australia
- Sree Jayajothi Cements Limited - India
- International Coal Ventures Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Rio Tinto Coal - Australia
- Ministry of Finance - Indonesia
- Thiess Contractors Indonesia
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- Heidelberg Cement - Germany
- Grasim Industreis Ltd - India
- GN Power Mariveles Coal Plant, Philippines
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