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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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Thursday, 22 November 18
SHUT OUT OF CHINA, U.S. COAL EXPORTERS FIND FAVOUR IN INDIA, FOR NOW - REUTERS
U.S. coal exporters have effectively lost a promising market in China since the imposition of tariffs as part of the ongoing trade dispute, but so ...
Wednesday, 21 November 18
SHIPPING MARKET INSIGHT - DIMITRIS KOURTESIS
Halfway through the fourth and last quarter of the year, we spot a significant change in freight rates for tankers trading dirty, as well as on the ...
Tuesday, 20 November 18
FREIGHT RATES IN THE CRUDE OIL MARKET HAVE ALREADY PICKED UP OVER THE PAST COUPLE OF WEEKS - YIANNIS VAMVAKAS
Current geopolitical developments between Iran and the US, which have led the latter to re-impose its sanctions, have significantly affected oil pr ...
Tuesday, 20 November 18
GOLDEN ENERGY AND RESOURCES LEADS A$249M BID FOR AUSTRALIA-LISTED STANMORE COAL - THE STRAITS TIMES
Singapore-listed Golden Energy and Resources (GEAR) is leading deals worth up to A$249 million (S$250 million) to acquire Australia-listed Stanmore ...
Monday, 19 November 18
INDONESIA'S LEADING EIGHT COAL MINER'S COAL MINING CONTRACTS ARE EXPECTED TO EXPIRE BETWEEN YEAR 2019 - 2025
The Ministry of Energy and Mineral Resources (ESDM) said, eight Coal Contract of Works (CCoW) will expected to expire between 2019 to 2026, Liputan ...
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- Jorong Barutama Greston.PT - Indonesia
- Marubeni Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Indo Tambangraya Megah - Indonesia
- Dalmia Cement Bharat India
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- SMC Global Power, Philippines
- IEA Clean Coal Centre - UK
- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- London Commodity Brokers - England
- South Luzon Thermal Energy Corporation
- Madhucon Powers Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Tamil Nadu electricity Board
- VISA Power Limited - India
- Essar Steel Hazira Ltd - India
- Petron Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Samtan Co., Ltd - South Korea
- Wood Mackenzie - Singapore
- Central Electricity Authority - India
- Orica Australia Pty. Ltd.
- Manunggal Multi Energi - Indonesia
- Australian Commodity Traders Exchange
- Bharathi Cement Corporation - India
- Borneo Indobara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Mines - Canada
- Energy Development Corp, Philippines
- Electricity Authority, New Zealand
- Coal and Oil Company - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- Sical Logistics Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- Goldman Sachs - Singapore
- ICICI Bank Limited - India
- ASAPP Information Group - India
- Sinarmas Energy and Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- Power Finance Corporation Ltd., India
- MS Steel International - UAE
- Bhushan Steel Limited - India
- Jaiprakash Power Ventures ltd
- Xindia Steels Limited - India
- Sakthi Sugars Limited - India
- Kaltim Prima Coal - Indonesia
- Meralco Power Generation, Philippines
- Binh Thuan Hamico - Vietnam
- LBH Netherlands Bv - Netherlands
- Bhatia International Limited - India
- Gujarat Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Orica Mining Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Parry Sugars Refinery, India
- Sarangani Energy Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Thiess Contractors Indonesia
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- Siam City Cement PLC, Thailand
- Cement Manufacturers Association - India
- OPG Power Generation Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Mercator Lines Limited - India
- PowerSource Philippines DevCo
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate Of Revenue Intelligence - India
- PTC India Limited - India
- Sree Jayajothi Cements Limited - India
- Medco Energi Mining Internasional
- European Bulk Services B.V. - Netherlands
- Ambuja Cements Ltd - India
- SMG Consultants - Indonesia
- Rio Tinto Coal - Australia
- Global Business Power Corporation, Philippines
- Singapore Mercantile Exchange
- Antam Resourcindo - Indonesia
- Commonwealth Bank - Australia
- Ministry of Finance - Indonesia
- Bukit Makmur.PT - Indonesia
- Riau Bara Harum - Indonesia
- Iligan Light & Power Inc, Philippines
- McConnell Dowell - Australia
- Kalimantan Lumbung Energi - Indonesia
- Edison Trading Spa - Italy
- Central Java Power - Indonesia
- Metalloyd Limited - United Kingdom
- Posco Energy - South Korea
- Semirara Mining and Power Corporation, Philippines
- CNBM International Corporation - China
- Malabar Cements Ltd - India
- Australian Coal Association
- Banpu Public Company Limited - Thailand
- GVK Power & Infra Limited - India
- Interocean Group of Companies - India
- Mjunction Services Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Mintek Dendrill Indonesia
- Indonesian Coal Mining Association
- Bangladesh Power Developement Board
- San Jose City I Power Corp, Philippines
- Baramulti Group, Indonesia
- Minerals Council of Australia
- Neyveli Lignite Corporation Ltd, - India
- Mercuria Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Planning Commission, India
- Renaissance Capital - South Africa
- Kepco SPC Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Larsen & Toubro Limited - India
- Indogreen Group - Indonesia
- Savvy Resources Ltd - HongKong
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- Chamber of Mines of South Africa
- Heidelberg Cement - Germany
- Jindal Steel & Power Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Formosa Plastics Group - Taiwan
- Ministry of Transport, Egypt
- Videocon Industries ltd - India
- Georgia Ports Authority, United States
- Port Waratah Coal Services - Australia
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Coal Council - USA
- The Treasury - Australian Government
- Siam City Cement - Thailand
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- Bayan Resources Tbk. - Indonesia
- GMR Energy Limited - India
- Romanian Commodities Exchange
- Thai Mozambique Logistica
- Petrochimia International Co. Ltd.- Taiwan
- White Energy Company Limited
- Deloitte Consulting - India
- New Zealand Coal & Carbon
- Gujarat Mineral Development Corp Ltd - India
- Intertek Mineral Services - Indonesia
- Electricity Generating Authority of Thailand
- Merrill Lynch Commodities Europe
- Anglo American - United Kingdom
- Toyota Tsusho Corporation, Japan
- Star Paper Mills Limited - India
- Aboitiz Power Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Economic Council, Georgia
- Krishnapatnam Port Company Ltd. - India
- Maharashtra Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Therma Luzon, Inc, Philippines
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Pipit Mutiara Jaya. PT, Indonesia
- Globalindo Alam Lestari - Indonesia
- Oldendorff Carriers - Singapore
- Kideco Jaya Agung - Indonesia
- Makarim & Taira - Indonesia
- Bhoruka Overseas - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- TeaM Sual Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Standard Chartered Bank - UAE
- Ceylon Electricity Board - Sri Lanka
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- Indian Energy Exchange, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coalindo Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Price Waterhouse Coopers - Russia
- Bukit Baiduri Energy - Indonesia
- Lanco Infratech Ltd - India
- Indika Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Meenaskhi Energy Private Limited - India
- The University of Queensland
- Parliament of New Zealand
- Grasim Industreis Ltd - India
- Africa Commodities Group - South Africa
- SN Aboitiz Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Asmin Koalindo Tuhup - Indonesia
- Tata Chemicals Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining Corp, Philippines
- Gujarat Sidhee Cement - India
- Global Green Power PLC Corporation, Philippines
- Independent Power Producers Association of India
- Vijayanagar Sugar Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Uttam Galva Steels Limited - India
- Kobexindo Tractors - Indoneisa
- Ind-Barath Power Infra Limited - India
- Altura Mining Limited, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kumho Petrochemical, South Korea
- Simpson Spence & Young - Indonesia
- Wilmar Investment Holdings
- Carbofer General Trading SA - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Agrawal Coal Company - India
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