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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, 27 November 18
PANAMAX AND SUPRAMAX INDICES WITNESSED A DECLINE OF JUST BELOW 14% IN THEIR MEAN ON A MONTH-ON-MONTH COMPARISON - ALLIED SHIPPING
A month of sharp corrections and great asymmetries for the dry bulk sector, with the overall overview of the market shipping rapidly from a state o ...
Monday, 26 November 18
SUPRAMAX: THE ASIAN MARKET STALLED THIS WEEK WITH A BUILD-UP OF TONNAGE - BALTIC BRIEFING
Capesize
It was a positive end to the week, with West Australia/China making significant gains and firing owners’ resolve. There was talk ...
Friday, 23 November 18
GOLDEN ENERGY'S POTENTIAL ACQUISITION OF STANMORE CREDIT POSITIVE - FITCH RATINGS
Golden Energy and Resources Limited's (GEAR, B+/Positive) potential acquisition of Stanmore Coal will help the company diversify its coal opera ...
Friday, 23 November 18
ASSOCIATION CALLS FOR REVISION OF DMO SCHEME FOR COAL - JP
The Indonesian Coal Mining Association (APBI) has called on the government to revise the domestic market obligation (DMO) scheme for coal, which re ...
Friday, 23 November 18
INDONESIA'S REVENUES FROM MINERAL AND COAL INCREASE TO US$ 2.858 BILLION - ANTARA
Indonesia`s non-tax state revenues from the mineral and coal sub-sector reached Rp 41.77 trillion (approximately US$ 2.858 Billion) as of Nov 16, 2 ...
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- TNB Fuel Sdn Bhd - Malaysia
- Altura Mining Limited, Indonesia
- Binh Thuan Hamico - Vietnam
- Energy Development Corp, Philippines
- New Zealand Coal & Carbon
- The Treasury - Australian Government
- IEA Clean Coal Centre - UK
- Chamber of Mines of South Africa
- Thai Mozambique Logistica
- Karbindo Abesyapradhi - Indoneisa
- The State Trading Corporation of India Ltd
- Heidelberg Cement - Germany
- Tata Chemicals Ltd - India
- VISA Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- Siam City Cement - Thailand
- Miang Besar Coal Terminal - Indonesia
- Port Waratah Coal Services - Australia
- OPG Power Generation Pvt Ltd - India
- GMR Energy Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Barasentosa Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- Parliament of New Zealand
- Bukit Makmur.PT - Indonesia
- Sical Logistics Limited - India
- Trasteel International SA, Italy
- Lanco Infratech Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Larsen & Toubro Limited - India
- Power Finance Corporation Ltd., India
- Agrawal Coal Company - India
- Petrochimia International Co. Ltd.- Taiwan
- ICICI Bank Limited - India
- Bangladesh Power Developement Board
- Meenaskhi Energy Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Global Coal Blending Company Limited - Australia
- McConnell Dowell - Australia
- ASAPP Information Group - India
- Edison Trading Spa - Italy
- Karaikal Port Pvt Ltd - India
- Indonesian Coal Mining Association
- Orica Australia Pty. Ltd.
- PTC India Limited - India
- Wood Mackenzie - Singapore
- Aboitiz Power Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Vedanta Resources Plc - India
- Straits Asia Resources Limited - Singapore
- Central Electricity Authority - India
- Ministry of Finance - Indonesia
- Formosa Plastics Group - Taiwan
- Timah Investasi Mineral - Indoneisa
- Price Waterhouse Coopers - Russia
- San Jose City I Power Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Chettinad Cement Corporation Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Salva Resources Pvt Ltd - India
- Indogreen Group - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- Medco Energi Mining Internasional
- LBH Netherlands Bv - Netherlands
- PNOC Exploration Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Mercator Lines Limited - India
- Romanian Commodities Exchange
- Marubeni Corporation - India
- Eastern Coal Council - USA
- Holcim Trading Pte Ltd - Singapore
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- Kaltim Prima Coal - Indonesia
- Jindal Steel & Power Ltd - India
- Malabar Cements Ltd - India
- Simpson Spence & Young - Indonesia
- Bhoruka Overseas - Indonesia
- Latin American Coal - Colombia
- Kobexindo Tractors - Indoneisa
- Parry Sugars Refinery, India
- Kumho Petrochemical, South Korea
- Bhatia International Limited - India
- SMC Global Power, Philippines
- Eastern Energy - Thailand
- Krishnapatnam Port Company Ltd. - India
- White Energy Company Limited
- Thiess Contractors Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- GN Power Mariveles Coal Plant, Philippines
- Planning Commission, India
- Kartika Selabumi Mining - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Makarim & Taira - Indonesia
- CNBM International Corporation - China
- MS Steel International - UAE
- Ambuja Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Deloitte Consulting - India
- Global Business Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- London Commodity Brokers - England
- Minerals Council of Australia
- Sree Jayajothi Cements Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Intertek Mineral Services - Indonesia
- Madhucon Powers Ltd - India
- Cement Manufacturers Association - India
- Therma Luzon, Inc, Philippines
- Banpu Public Company Limited - Thailand
- Commonwealth Bank - Australia
- Jaiprakash Power Ventures ltd
- Kideco Jaya Agung - Indonesia
- Wilmar Investment Holdings
- Mintek Dendrill Indonesia
- Semirara Mining Corp, Philippines
- Borneo Indobara - Indonesia
- Sojitz Corporation - Japan
- Ceylon Electricity Board - Sri Lanka
- GAC Shipping (India) Pvt Ltd
- Electricity Generating Authority of Thailand
- Indika Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Gujarat Sidhee Cement - India
- Bukit Asam (Persero) Tbk - Indonesia
- Aditya Birla Group - India
- Rashtriya Ispat Nigam Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Georgia Ports Authority, United States
- Metalloyd Limited - United Kingdom
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Anglo American - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kapuas Tunggal Persada - Indonesia
- Global Green Power PLC Corporation, Philippines
- Australian Commodity Traders Exchange
- Directorate General of MIneral and Coal - Indonesia
- Energy Link Ltd, New Zealand
- European Bulk Services B.V. - Netherlands
- Carbofer General Trading SA - India
- Oldendorff Carriers - Singapore
- Renaissance Capital - South Africa
- Globalindo Alam Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Mercuria Energy - Indonesia
- Orica Mining Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- Electricity Authority, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Bhushan Steel Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMG Consultants - Indonesia
- Petron Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Singapore Mercantile Exchange
- Ministry of Mines - Canada
- CIMB Investment Bank - Malaysia
- GVK Power & Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- Antam Resourcindo - Indonesia
- Australian Coal Association
- Uttam Galva Steels Limited - India
- The University of Queensland
- Riau Bara Harum - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Billiton Holdings Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Coal and Oil Company - UAE
- Ministry of Transport, Egypt
- Xindia Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mjunction Services Limited - India
- Sakthi Sugars Limited - India
- Attock Cement Pakistan Limited
- Indian Energy Exchange, India
- Pipit Mutiara Jaya. PT, Indonesia
- India Bulls Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Star Paper Mills Limited - India
- TeaM Sual Corporation - Philippines
- Baramulti Group, Indonesia
- PowerSource Philippines DevCo
- Goldman Sachs - Singapore
- Independent Power Producers Association of India
- Grasim Industreis Ltd - India
- Vizag Seaport Private Limited - India
- Interocean Group of Companies - India
- Posco Energy - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- Coalindo Energy - Indonesia
- Rio Tinto Coal - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Economic Council, Georgia
- Essar Steel Hazira Ltd - India
- South Luzon Thermal Energy Corporation
- Central Java Power - Indonesia
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