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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, 17 October 18
SHIPPING MARKET INSIGHT - TIMOS PAPADIMITRIOU
In the last three months approximately 72 tankers changed hands involving ships larger than 33kdwt up to VLCC. 43 of those vessels had to do ...
Tuesday, 16 October 18
A PRACTICAL OVERVIEW OF THE IMO 2020 SULPHUR CAP - CLYDE&CO
KNOWLEDGE TO ELEVATE
With less than eighteen months before Regulation 14.1.3 of Annex VI of the MARPOL Convention comes into effect, there are ...
Saturday, 13 October 18
SUPRAMAX: SIGNIFICANT ACTIVITY IN THE INDIAN OCEAN WAS EVIDENT AND RATES JUMPED - BALTIC BRIEFING
Capesize
A sharp reversal of fortunes for the big ships as the week closed after a depressed beginning. To start with drops were sudden, with t ...
Wednesday, 10 October 18
SHIPPING MARKET INSIGHT - ILIAS M. LALAOUNIS
During the end of last month the BHSI was hovering around 630 points, while the last observed sale on a 10-yr old Japanese Handy was the M/V Van Im ...
Monday, 08 October 18
INDONESIAN THERMAL COAL PRICE REFERENCE FELL 3.74% IN OCTOBER 2018
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
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- Uttam Galva Steels Limited - India
- Posco Energy - South Korea
- Intertek Mineral Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PTC India Limited - India
- Indian Energy Exchange, India
- Simpson Spence & Young - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kapuas Tunggal Persada - Indonesia
- LBH Netherlands Bv - Netherlands
- Iligan Light & Power Inc, Philippines
- VISA Power Limited - India
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- Xindia Steels Limited - India
- Kumho Petrochemical, South Korea
- CNBM International Corporation - China
- Eastern Energy - Thailand
- Aboitiz Power Corporation - Philippines
- Economic Council, Georgia
- Ministry of Mines - Canada
- Indian Oil Corporation Limited
- Borneo Indobara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercator Lines Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Coal and Oil Company - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Makmur.PT - Indonesia
- Semirara Mining Corp, Philippines
- Altura Mining Limited, Indonesia
- The Treasury - Australian Government
- PetroVietnam Power Coal Import and Supply Company
- Offshore Bulk Terminal Pte Ltd, Singapore
- Larsen & Toubro Limited - India
- Parliament of New Zealand
- Anglo American - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Kobexindo Tractors - Indoneisa
- Petron Corporation, Philippines
- Videocon Industries ltd - India
- Interocean Group of Companies - India
- Holcim Trading Pte Ltd - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Planning Commission, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Globalindo Alam Lestari - Indonesia
- Africa Commodities Group - South Africa
- Madhucon Powers Ltd - India
- McConnell Dowell - Australia
- Neyveli Lignite Corporation Ltd, - India
- Standard Chartered Bank - UAE
- Lanco Infratech Ltd - India
- Savvy Resources Ltd - HongKong
- Commonwealth Bank - Australia
- Salva Resources Pvt Ltd - India
- Independent Power Producers Association of India
- Meenaskhi Energy Private Limited - India
- IEA Clean Coal Centre - UK
- Tamil Nadu electricity Board
- Jindal Steel & Power Ltd - India
- Meralco Power Generation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Electricity Authority, New Zealand
- Indogreen Group - Indonesia
- Chamber of Mines of South Africa
- Thai Mozambique Logistica
- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- Maharashtra Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Central Electricity Authority - India
- Cement Manufacturers Association - India
- Pendopo Energi Batubara - Indonesia
- ICICI Bank Limited - India
- Sakthi Sugars Limited - India
- Bharathi Cement Corporation - India
- Maheswari Brothers Coal Limited - India
- Mintek Dendrill Indonesia
- International Coal Ventures Pvt Ltd - India
- SMC Global Power, Philippines
- Medco Energi Mining Internasional
- Renaissance Capital - South Africa
- South Luzon Thermal Energy Corporation
- SN Aboitiz Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Malabar Cements Ltd - India
- Metalloyd Limited - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parry Sugars Refinery, India
- MS Steel International - UAE
- Mercuria Energy - Indonesia
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- Petrochimia International Co. Ltd.- Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Thiess Contractors Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Rio Tinto Coal - Australia
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Port Waratah Coal Services - Australia
- Marubeni Corporation - India
- Orica Australia Pty. Ltd.
- Straits Asia Resources Limited - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Australian Commodity Traders Exchange
- Global Coal Blending Company Limited - Australia
- Ceylon Electricity Board - Sri Lanka
- San Jose City I Power Corp, Philippines
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- Electricity Generating Authority of Thailand
- Coastal Gujarat Power Limited - India
- Timah Investasi Mineral - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Makarim & Taira - Indonesia
- Heidelberg Cement - Germany
- Billiton Holdings Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Sical Logistics Limited - India
- Bhushan Steel Limited - India
- Siam City Cement - Thailand
- Kaltim Prima Coal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Wood Mackenzie - Singapore
- Indika Energy - Indonesia
- Bhatia International Limited - India
- Binh Thuan Hamico - Vietnam
- Karaikal Port Pvt Ltd - India
- Grasim Industreis Ltd - India
- Edison Trading Spa - Italy
- Goldman Sachs - Singapore
- Manunggal Multi Energi - Indonesia
- SMG Consultants - Indonesia
- Dalmia Cement Bharat India
- Baramulti Group, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Minerals Council of Australia
- Carbofer General Trading SA - India
- Singapore Mercantile Exchange
- Siam City Cement PLC, Thailand
- GVK Power & Infra Limited - India
- CIMB Investment Bank - Malaysia
- Sarangani Energy Corporation, Philippines
- Antam Resourcindo - Indonesia
- ASAPP Information Group - India
- Deloitte Consulting - India
- Romanian Commodities Exchange
- Bhoruka Overseas - Indonesia
- Vedanta Resources Plc - India
- Eastern Coal Council - USA
- Trasteel International SA, Italy
- Energy Development Corp, Philippines
- Ministry of Transport, Egypt
- India Bulls Power Limited - India
- Kideco Jaya Agung - Indonesia
- Global Green Power PLC Corporation, Philippines
- Central Java Power - Indonesia
- Samtan Co., Ltd - South Korea
- Price Waterhouse Coopers - Russia
- Latin American Coal - Colombia
- Barasentosa Lestari - Indonesia
- Ministry of Finance - Indonesia
- Oldendorff Carriers - Singapore
- TeaM Sual Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Aditya Birla Group - India
- White Energy Company Limited
- European Bulk Services B.V. - Netherlands
- Riau Bara Harum - Indonesia
- Bukit Baiduri Energy - Indonesia
- Tata Chemicals Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Indonesian Coal Mining Association
- Merrill Lynch Commodities Europe
- PowerSource Philippines DevCo
- Sinarmas Energy and Mining - Indonesia
- Sojitz Corporation - Japan
- Georgia Ports Authority, United States
- Global Business Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Leighton Contractors Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- Bangladesh Power Developement Board
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- London Commodity Brokers - England
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Mjunction Services Limited - India
- Ind-Barath Power Infra Limited - India
- Formosa Plastics Group - Taiwan
- Orica Mining Services - Indonesia
- Wilmar Investment Holdings
- Vijayanagar Sugar Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Agrawal Coal Company - India
- Ambuja Cements Ltd - India
- Energy Link Ltd, New Zealand
- Gujarat Sidhee Cement - India
- Jaiprakash Power Ventures ltd
- IHS Mccloskey Coal Group - USA
- Bulk Trading Sa - Switzerland
- Australian Coal Association
- Attock Cement Pakistan Limited
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