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