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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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Tuesday, 11 December 18
SHIPPING MARKET ANALYSIS - ALLIED
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Tuesday, 11 December 18
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Thursday, 06 December 18
IN THE EAST, BIGGER SUPRA WAS FIXED CA US$ 10K FOR INDO-CHINA COAL ROUND - FEARNLEYS
Capesize
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Thursday, 06 December 18
U.S. COAL CONSUMPTION IN 2018 EXPECTED TO BE THE LOWEST IN 39 YEARS - EIA
EIA expects total U.S. coal consumption in 2018 to fall to 691 million short tons (MMst), a 4% decline from 2017 and the lowest level since 1979. U ...
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DEMAND RISKS WEIGH ON GLOBAL SHIPPING SECTOR OUTLOOK - FITCH RATINGS
The global shipping sector outlook remains negative reflecting the demand-side risks of protectionism and slower economic growth, Fitch Ratings say ...
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- Gujarat Sidhee Cement - India
- White Energy Company Limited
- Maheswari Brothers Coal Limited - India
- Bangladesh Power Developement Board
- Star Paper Mills Limited - India
- Ministry of Mines - Canada
- Kaltim Prima Coal - Indonesia
- Intertek Mineral Services - Indonesia
- PTC India Limited - India
- Central Java Power - Indonesia
- Romanian Commodities Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercuria Energy - Indonesia
- Parry Sugars Refinery, India
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- Ministry of Finance - Indonesia
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Interocean Group of Companies - India
- Agrawal Coal Company - India
- Kohat Cement Company Ltd. - Pakistan
- Pendopo Energi Batubara - Indonesia
- Indo Tambangraya Megah - Indonesia
- Cement Manufacturers Association - India
- Aboitiz Power Corporation - Philippines
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Straits Asia Resources Limited - Singapore
- Holcim Trading Pte Ltd - Singapore
- Wood Mackenzie - Singapore
- Petron Corporation, Philippines
- Bhoruka Overseas - Indonesia
- International Coal Ventures Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- Posco Energy - South Korea
- Rashtriya Ispat Nigam Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thai Mozambique Logistica
- Rio Tinto Coal - Australia
- New Zealand Coal & Carbon
- LBH Netherlands Bv - Netherlands
- Chettinad Cement Corporation Ltd - India
- Commonwealth Bank - Australia
- Sinarmas Energy and Mining - Indonesia
- Tata Chemicals Ltd - India
- Jindal Steel & Power Ltd - India
- Singapore Mercantile Exchange
- Tamil Nadu electricity Board
- Anglo American - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- Dalmia Cement Bharat India
- Bukit Baiduri Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Power Finance Corporation Ltd., India
- OPG Power Generation Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Savvy Resources Ltd - HongKong
- Directorate General of MIneral and Coal - Indonesia
- Mintek Dendrill Indonesia
- Orica Australia Pty. Ltd.
- Medco Energi Mining Internasional
- Indian Energy Exchange, India
- Heidelberg Cement - Germany
- Miang Besar Coal Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- Xindia Steels Limited - India
- Marubeni Corporation - India
- Chamber of Mines of South Africa
- TeaM Sual Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Videocon Industries ltd - India
- Africa Commodities Group - South Africa
- Carbofer General Trading SA - India
- Orica Mining Services - Indonesia
- Deloitte Consulting - India
- Jaiprakash Power Ventures ltd
- Makarim & Taira - Indonesia
- Attock Cement Pakistan Limited
- Timah Investasi Mineral - Indoneisa
- SMC Global Power, Philippines
- Energy Link Ltd, New Zealand
- Ambuja Cements Ltd - India
- Australian Coal Association
- Parliament of New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Sical Logistics Limited - India
- Sakthi Sugars Limited - India
- Indogreen Group - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kepco SPC Power Corporation, Philippines
- Indonesian Coal Mining Association
- Energy Development Corp, Philippines
- London Commodity Brokers - England
- Kartika Selabumi Mining - Indonesia
- Indian Oil Corporation Limited
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- Eastern Energy - Thailand
- Meralco Power Generation, Philippines
- Siam City Cement - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Independent Power Producers Association of India
- European Bulk Services B.V. - Netherlands
- Renaissance Capital - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Authority, New Zealand
- Madhucon Powers Ltd - India
- Bhushan Steel Limited - India
- Samtan Co., Ltd - South Korea
- Merrill Lynch Commodities Europe
- Economic Council, Georgia
- GMR Energy Limited - India
- Mjunction Services Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Electricity Generating Authority of Thailand
- Aditya Birla Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Sree Jayajothi Cements Limited - India
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Indika Energy - Indonesia
- Global Business Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Vedanta Resources Plc - India
- Australian Commodity Traders Exchange
- Leighton Contractors Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Kapuas Tunggal Persada - Indonesia
- Mercator Lines Limited - India
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- Manunggal Multi Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Simpson Spence & Young - Indonesia
- Lanco Infratech Ltd - India
- Bayan Resources Tbk. - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Planning Commission, India
- Vizag Seaport Private Limited - India
- Price Waterhouse Coopers - Russia
- Coastal Gujarat Power Limited - India
- Meenaskhi Energy Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Iligan Light & Power Inc, Philippines
- Thiess Contractors Indonesia
- Malabar Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Semirara Mining Corp, Philippines
- Bharathi Cement Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- The State Trading Corporation of India Ltd
- MS Steel International - UAE
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Coalindo Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Kumho Petrochemical, South Korea
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- Bulk Trading Sa - Switzerland
- Bahari Cakrawala Sebuku - Indonesia
- CNBM International Corporation - China
- SN Aboitiz Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Karaikal Port Pvt Ltd - India
- Minerals Council of Australia
- Uttam Galva Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Formosa Plastics Group - Taiwan
- Coal and Oil Company - UAE
- Kobexindo Tractors - Indoneisa
- Edison Trading Spa - Italy
- Bukit Makmur.PT - Indonesia
- Siam City Cement PLC, Thailand
- Grasim Industreis Ltd - India
- Barasentosa Lestari - Indonesia
- The Treasury - Australian Government
- Jorong Barutama Greston.PT - Indonesia
- Central Electricity Authority - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Riau Bara Harum - Indonesia
- Latin American Coal - Colombia
- Trasteel International SA, Italy
- South Luzon Thermal Energy Corporation
- Binh Thuan Hamico - Vietnam
- Antam Resourcindo - Indonesia
- VISA Power Limited - India
- McConnell Dowell - Australia
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- Goldman Sachs - Singapore
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- SMG Consultants - Indonesia
- PowerSource Philippines DevCo
- Wilmar Investment Holdings
- Sojitz Corporation - Japan
- The University of Queensland
- Oldendorff Carriers - Singapore
- Standard Chartered Bank - UAE
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