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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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- Straits Asia Resources Limited - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- GVK Power & Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Thai Mozambique Logistica
- Posco Energy - South Korea
- Global Business Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Thiess Contractors Indonesia
- Maheswari Brothers Coal Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- Bhoruka Overseas - Indonesia
- Medco Energi Mining Internasional
- Meralco Power Generation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Xindia Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Renaissance Capital - South Africa
- Metalloyd Limited - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Indogreen Group - Indonesia
- Krishnapatnam Port Company Ltd. - India
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- Simpson Spence & Young - Indonesia
- Bhatia International Limited - India
- Interocean Group of Companies - India
- Aboitiz Power Corporation - Philippines
- Sical Logistics Limited - India
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- Essar Steel Hazira Ltd - India
- Bharathi Cement Corporation - India
- SMG Consultants - Indonesia
- Karaikal Port Pvt Ltd - India
- Mintek Dendrill Indonesia
- Siam City Cement - Thailand
- Petron Corporation, Philippines
- GMR Energy Limited - India
- Bukit Makmur.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Edison Trading Spa - Italy
- Chettinad Cement Corporation Ltd - India
- Minerals Council of Australia
- Standard Chartered Bank - UAE
- Electricity Generating Authority of Thailand
- PetroVietnam Power Coal Import and Supply Company
- Bukit Baiduri Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Central Java Power - Indonesia
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
- Orica Mining Services - Indonesia
- Kobexindo Tractors - Indoneisa
- New Zealand Coal & Carbon
- Bulk Trading Sa - Switzerland
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- LBH Netherlands Bv - Netherlands
- Ministry of Mines - Canada
- Petrochimia International Co. Ltd.- Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Asmin Koalindo Tuhup - Indonesia
- Commonwealth Bank - Australia
- Trasteel International SA, Italy
- Aditya Birla Group - India
- Indika Energy - Indonesia
- ICICI Bank Limited - India
- India Bulls Power Limited - India
- Larsen & Toubro Limited - India
- Banpu Public Company Limited - Thailand
- Altura Mining Limited, Indonesia
- Barasentosa Lestari - Indonesia
- Coalindo Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Energy - Thailand
- Riau Bara Harum - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Deloitte Consulting - India
- Tamil Nadu electricity Board
- Parliament of New Zealand
- Manunggal Multi Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Ambuja Cements Ltd - India
- Cement Manufacturers Association - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- Heidelberg Cement - Germany
- Oldendorff Carriers - Singapore
- Savvy Resources Ltd - HongKong
- Jorong Barutama Greston.PT - Indonesia
- Singapore Mercantile Exchange
- Sindya Power Generating Company Private Ltd
- Ministry of Transport, Egypt
- Australian Coal Association
- Ceylon Electricity Board - Sri Lanka
- Wood Mackenzie - Singapore
- Independent Power Producers Association of India
- Orica Australia Pty. Ltd.
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Star Paper Mills Limited - India
- Power Finance Corporation Ltd., India
- Indonesian Coal Mining Association
- Semirara Mining and Power Corporation, Philippines
- Sojitz Corporation - Japan
- Samtan Co., Ltd - South Korea
- Bangladesh Power Developement Board
- Goldman Sachs - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Latin American Coal - Colombia
- Formosa Plastics Group - Taiwan
- Gujarat Electricity Regulatory Commission - India
- White Energy Company Limited
- Marubeni Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Uttam Galva Steels Limited - India
- Carbofer General Trading SA - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kalimantan Lumbung Energi - Indonesia
- Chamber of Mines of South Africa
- Romanian Commodities Exchange
- Mercator Lines Limited - India
- Kideco Jaya Agung - Indonesia
- ASAPP Information Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- PowerSource Philippines DevCo
- Kapuas Tunggal Persada - Indonesia
- Baramulti Group, Indonesia
- Energy Link Ltd, New Zealand
- Intertek Mineral Services - Indonesia
- SMC Global Power, Philippines
- Wilmar Investment Holdings
- Billiton Holdings Pty Ltd - Australia
- PTC India Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Central Electricity Authority - India
- Energy Development Corp, Philippines
- The Treasury - Australian Government
- Kaltim Prima Coal - Indonesia
- Tata Chemicals Ltd - India
- The State Trading Corporation of India Ltd
- VISA Power Limited - India
- Economic Council, Georgia
- Salva Resources Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Makarim & Taira - Indonesia
- IEA Clean Coal Centre - UK
- MS Steel International - UAE
- Coastal Gujarat Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Agrawal Coal Company - India
- Port Waratah Coal Services - Australia
- Alfred C Toepfer International GmbH - Germany
- Indo Tambangraya Megah - Indonesia
- Merrill Lynch Commodities Europe
- Grasim Industreis Ltd - India
- Africa Commodities Group - South Africa
- Borneo Indobara - Indonesia
- Siam City Cement PLC, Thailand
- Toyota Tsusho Corporation, Japan
- Rio Tinto Coal - Australia
- CNBM International Corporation - China
- Price Waterhouse Coopers - Russia
- Iligan Light & Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Mjunction Services Limited - India
- OPG Power Generation Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Binh Thuan Hamico - Vietnam
- Vedanta Resources Plc - India
- Parry Sugars Refinery, India
- Madhucon Powers Ltd - India
- TeaM Sual Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Antam Resourcindo - Indonesia
- Therma Luzon, Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Attock Cement Pakistan Limited
- Vizag Seaport Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Dalmia Cement Bharat India
- Coal and Oil Company - UAE
- Kumho Petrochemical, South Korea
- GN Power Mariveles Coal Plant, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- San Jose City I Power Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Mercuria Energy - Indonesia
- Georgia Ports Authority, United States
- The University of Queensland
- Bhushan Steel Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Sree Jayajothi Cements Limited - India
- European Bulk Services B.V. - Netherlands
- Ministry of Finance - Indonesia
- Miang Besar Coal Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Electricity Authority, New Zealand
- Anglo American - United Kingdom
- PNOC Exploration Corporation - Philippines
- Gujarat Sidhee Cement - India
- Global Coal Blending Company Limited - Australia
- Globalindo Alam Lestari - Indonesia
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