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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, 06 February 19
FEBRUARY 2019 INDONESIA'S COAL REFERENCE PRICE FELL 8.83 PERCENT YOY
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
Wednesday, 06 February 19
THE BDI HAS EASED BACK TO 645 BP, ITS LOWEST LEVEL SINCE AUGUST 2016 - ALLIED
The dry bulk sector is in the doldrums, with most market participants seemingly left utterly perplexed, and simultaneously, in pursuit of any posit ...
Monday, 04 February 19
COAL STILL IN HIGH DEMAND GLOBALLY
Although the world is switching to renewable energy there is still a big demand for coal around the globe.
This is according to Cany ...
Friday, 01 February 19
ULTRAMAX WAS FIXED DELIVERY KALIMANTAN, FOR TRIP TO WEST COAST INDIA AT $7,000 - BALTIC BRIEFING
Capesize
The Vale dam tragedy sparked a sharp fall in rates across all regions even where tonnage remained tight. The potential loss of product ...
Friday, 01 February 19
SEMBCORP SELECTS NORDEN FOR LONG-TERM INDIAN CONTRACT
NORDEN A/S has signed a 10-year Panamax Contract of Affreightment (COA) with Indian utility firm Sembcorp Energy India Ltd.
From 1 A ...
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- San Jose City I Power Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Interocean Group of Companies - India
- Attock Cement Pakistan Limited
- Borneo Indobara - Indonesia
- Standard Chartered Bank - UAE
- Eastern Energy - Thailand
- Bhushan Steel Limited - India
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- MS Steel International - UAE
- Oldendorff Carriers - Singapore
- Thai Mozambique Logistica
- Aboitiz Power Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- McConnell Dowell - Australia
- Alfred C Toepfer International GmbH - Germany
- Petron Corporation, Philippines
- Meralco Power Generation, Philippines
- Altura Mining Limited, Indonesia
- Metalloyd Limited - United Kingdom
- Australian Commodity Traders Exchange
- Wilmar Investment Holdings
- International Coal Ventures Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Dalmia Cement Bharat India
- Jaiprakash Power Ventures ltd
- Formosa Plastics Group - Taiwan
- Australian Coal Association
- South Luzon Thermal Energy Corporation
- Aditya Birla Group - India
- Salva Resources Pvt Ltd - India
- Goldman Sachs - Singapore
- Romanian Commodities Exchange
- Manunggal Multi Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Link Ltd, New Zealand
- Marubeni Corporation - India
- Siam City Cement PLC, Thailand
- Kaltim Prima Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Timah Investasi Mineral - Indoneisa
- Planning Commission, India
- Rashtriya Ispat Nigam Limited - India
- Leighton Contractors Pty Ltd - Australia
- Anglo American - United Kingdom
- Africa Commodities Group - South Africa
- Sinarmas Energy and Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Latin American Coal - Colombia
- SMC Global Power, Philippines
- PowerSource Philippines DevCo
- Orica Mining Services - Indonesia
- Carbofer General Trading SA - India
- Jindal Steel & Power Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- London Commodity Brokers - England
- OPG Power Generation Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Makarim & Taira - Indonesia
- Barasentosa Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- GAC Shipping (India) Pvt Ltd
- Intertek Mineral Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Trasteel International SA, Italy
- Indian Energy Exchange, India
- Maheswari Brothers Coal Limited - India
- Banpu Public Company Limited - Thailand
- GMR Energy Limited - India
- Indian Oil Corporation Limited
- VISA Power Limited - India
- Toyota Tsusho Corporation, Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indika Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- ICICI Bank Limited - India
- Vizag Seaport Private Limited - India
- GVK Power & Infra Limited - India
- SMG Consultants - Indonesia
- PTC India Limited - India
- Siam City Cement - Thailand
- Georgia Ports Authority, United States
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- Global Green Power PLC Corporation, Philippines
- Sojitz Corporation - Japan
- Gujarat Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Economic Council, Georgia
- Kideco Jaya Agung - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Indogreen Group - Indonesia
- Samtan Co., Ltd - South Korea
- Ceylon Electricity Board - Sri Lanka
- GN Power Mariveles Coal Plant, Philippines
- The Treasury - Australian Government
- Electricity Generating Authority of Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Globalindo Alam Lestari - Indonesia
- Minerals Council of Australia
- Edison Trading Spa - Italy
- Bhoruka Overseas - Indonesia
- Indonesian Coal Mining Association
- Bhatia International Limited - India
- Kobexindo Tractors - Indoneisa
- Sakthi Sugars Limited - India
- Antam Resourcindo - Indonesia
- Coal and Oil Company - UAE
- Pendopo Energi Batubara - Indonesia
- Power Finance Corporation Ltd., India
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- Posco Energy - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Commonwealth Bank - Australia
- Semirara Mining Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Malabar Cements Ltd - India
- Ministry of Transport, Egypt
- Maharashtra Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Parliament of New Zealand
- Holcim Trading Pte Ltd - Singapore
- Rio Tinto Coal - Australia
- White Energy Company Limited
- Grasim Industreis Ltd - India
- Billiton Holdings Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- Port Waratah Coal Services - Australia
- New Zealand Coal & Carbon
- Singapore Mercantile Exchange
- Kartika Selabumi Mining - Indonesia
- Tamil Nadu electricity Board
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- Global Business Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- India Bulls Power Limited - India
- Medco Energi Mining Internasional
- Straits Asia Resources Limited - Singapore
- IEA Clean Coal Centre - UK
- Vijayanagar Sugar Pvt Ltd - India
- Larsen & Toubro Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bulk Trading Sa - Switzerland
- Chamber of Mines of South Africa
- Uttam Galva Steels Limited - India
- TeaM Sual Corporation - Philippines
- Independent Power Producers Association of India
- Bharathi Cement Corporation - India
- Chettinad Cement Corporation Ltd - India
- Cement Manufacturers Association - India
- Kohat Cement Company Ltd. - Pakistan
- The State Trading Corporation of India Ltd
- Karaikal Port Pvt Ltd - India
- Agrawal Coal Company - India
- Iligan Light & Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Petrochimia International Co. Ltd.- Taiwan
- Central Electricity Authority - India
- Miang Besar Coal Terminal - Indonesia
- Star Paper Mills Limited - India
- Directorate Of Revenue Intelligence - India
- Mercator Lines Limited - India
- Kumho Petrochemical, South Korea
- PetroVietnam Power Coal Import and Supply Company
- Ind-Barath Power Infra Limited - India
- Central Java Power - Indonesia
- Sarangani Energy Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Parry Sugars Refinery, India
- CNBM International Corporation - China
- TNB Fuel Sdn Bhd - Malaysia
- Tata Chemicals Ltd - India
- Mintek Dendrill Indonesia
- Coalindo Energy - Indonesia
- Mercuria Energy - Indonesia
- Ministry of Finance - Indonesia
- Global Coal Blending Company Limited - Australia
- The University of Queensland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- Baramulti Group, Indonesia
- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- Renaissance Capital - South Africa
- Videocon Industries ltd - India
- Wood Mackenzie - Singapore
- Deloitte Consulting - India
- Binh Thuan Hamico - Vietnam
- Mjunction Services Limited - India
- Lanco Infratech Ltd - India
- Simpson Spence & Young - Indonesia
- Energy Development Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Essar Steel Hazira Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Therma Luzon, Inc, Philippines
- Madhucon Powers Ltd - India
- Bangladesh Power Developement Board
- Semirara Mining and Power Corporation, Philippines
- Electricity Authority, New Zealand
- Gujarat Sidhee Cement - India
- Xindia Steels Limited - India
- Vedanta Resources Plc - India
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