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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, 05 September 18
ASIAN DEMAND COULD CREATE DEFICIT IN GLOBAL LNG MARKET - FITCH RATINGS
Growing gas demand from Asia, particularly from China, could swing the liquefied natural gas (LNG) market into a deficit by 2022-2025, Fitch Rating ...
Tuesday, 04 September 18
SUPRAMAX: THE ASIAN SECTOR REMAINED ACTIVE WITH RATES STILL FIRM ESPECIALLY IN SE ASIA - BALTIC BRIEFING
Capesize
A turnaround in fortunes for the big ships, with a few slower days in the market. A build-up of tonnage and a lack of Brazil cargoes r ...
Thursday, 30 August 18
SUPRAMAX: CIS COAL TO FAR EAST WENT AT MID TENS AND TO SE ASIA AT CA USD 8000 - FEARNLEYS
Capesize
There was a slow start this week with holiday in UK on Monday. The index has been slowly coming off since then; The C5 route has seen ...
Wednesday, 29 August 18
MID-YEAR FY19 POWER OUTLOOK: IMPORTED COAL REQUIREMENT TO INCREASE DURING REMAINING FY19: IND-RA
India Ratings and Research (Ind-Ra) has maintained a stable-to-negative outlook on the Indian power sector for the remaining FY19, despite a rise i ...
Wednesday, 29 August 18
IMPACT ON CHARTERPARTIES - TIME TO ACT NOW : NORTH P&I CLUB
KNOWLEDGE TO ELEVATE
The challenges introduced by the global sulphur cap are not exclusively technical. The new limits are likely to impact co ...
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- Orica Mining Services - Indonesia
- South Luzon Thermal Energy Corporation
- Bhoruka Overseas - Indonesia
- Oldendorff Carriers - Singapore
- Riau Bara Harum - Indonesia
- Sree Jayajothi Cements Limited - India
- Ministry of Mines - Canada
- Wilmar Investment Holdings
- The Treasury - Australian Government
- Georgia Ports Authority, United States
- Central Java Power - Indonesia
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- Videocon Industries ltd - India
- Aboitiz Power Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Kobexindo Tractors - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Energy Link Ltd, New Zealand
- Standard Chartered Bank - UAE
- Binh Thuan Hamico - Vietnam
- Global Coal Blending Company Limited - Australia
- VISA Power Limited - India
- Energy Development Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Grasim Industreis Ltd - India
- Singapore Mercantile Exchange
- SMG Consultants - Indonesia
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- Bukit Baiduri Energy - Indonesia
- Medco Energi Mining Internasional
- Eastern Coal Council - USA
- Karbindo Abesyapradhi - Indoneisa
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Chamber of Mines of South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- SMC Global Power, Philippines
- Australian Commodity Traders Exchange
- Gujarat Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Karaikal Port Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Indian Oil Corporation Limited
- Gujarat Mineral Development Corp Ltd - India
- Coal and Oil Company - UAE
- Krishnapatnam Port Company Ltd. - India
- Mercator Lines Limited - India
- Miang Besar Coal Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Siam City Cement PLC, Thailand
- Billiton Holdings Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Finance - Indonesia
- Mjunction Services Limited - India
- Planning Commission, India
- Samtan Co., Ltd - South Korea
- GVK Power & Infra Limited - India
- Independent Power Producers Association of India
- Marubeni Corporation - India
- Agrawal Coal Company - India
- Meenaskhi Energy Private Limited - India
- Power Finance Corporation Ltd., India
- Sojitz Corporation - Japan
- Kalimantan Lumbung Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- IEA Clean Coal Centre - UK
- Ceylon Electricity Board - Sri Lanka
- Bhushan Steel Limited - India
- MS Steel International - UAE
- Formosa Plastics Group - Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parliament of New Zealand
- Jindal Steel & Power Ltd - India
- The State Trading Corporation of India Ltd
- Ministry of Transport, Egypt
- Ambuja Cements Ltd - India
- Sical Logistics Limited - India
- Semirara Mining and Power Corporation, Philippines
- Parry Sugars Refinery, India
- ASAPP Information Group - India
- Attock Cement Pakistan Limited
- Jaiprakash Power Ventures ltd
- TeaM Sual Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Globalindo Alam Lestari - Indonesia
- Larsen & Toubro Limited - India
- Sinarmas Energy and Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Xindia Steels Limited - India
- Makarim & Taira - Indonesia
- Interocean Group of Companies - India
- Bangladesh Power Developement Board
- OPG Power Generation Pvt Ltd - India
- Latin American Coal - Colombia
- PTC India Limited - India
- Therma Luzon, Inc, Philippines
- Indonesian Coal Mining Association
- Indogreen Group - Indonesia
- Anglo American - United Kingdom
- White Energy Company Limited
- PetroVietnam Power Coal Import and Supply Company
- Tata Chemicals Ltd - India
- Lanco Infratech Ltd - India
- GMR Energy Limited - India
- Renaissance Capital - South Africa
- Romanian Commodities Exchange
- Savvy Resources Ltd - HongKong
- Minerals Council of Australia
- Eastern Energy - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dalmia Cement Bharat India
- Rio Tinto Coal - Australia
- Thiess Contractors Indonesia
- Wood Mackenzie - Singapore
- Uttam Galva Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Madhucon Powers Ltd - India
- Altura Mining Limited, Indonesia
- Indian Energy Exchange, India
- CIMB Investment Bank - Malaysia
- TNB Fuel Sdn Bhd - Malaysia
- Economic Council, Georgia
- Global Business Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Antam Resourcindo - Indonesia
- Trasteel International SA, Italy
- The University of Queensland
- Sakthi Sugars Limited - India
- Bhatia International Limited - India
- Star Paper Mills Limited - India
- Alfred C Toepfer International GmbH - Germany
- CNBM International Corporation - China
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Authority, New Zealand
- Timah Investasi Mineral - Indoneisa
- LBH Netherlands Bv - Netherlands
- Straits Asia Resources Limited - Singapore
- Australian Coal Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining Corp, Philippines
- London Commodity Brokers - England
- Jorong Barutama Greston.PT - Indonesia
- GAC Shipping (India) Pvt Ltd
- Africa Commodities Group - South Africa
- Mercuria Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Malabar Cements Ltd - India
- Banpu Public Company Limited - Thailand
- San Jose City I Power Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Price Waterhouse Coopers - Russia
- European Bulk Services B.V. - Netherlands
- Deloitte Consulting - India
- Vedanta Resources Plc - India
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Sidhee Cement - India
- Electricity Generating Authority of Thailand
- Sarangani Energy Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Goldman Sachs - Singapore
- Siam City Cement - Thailand
- Coastal Gujarat Power Limited - India
- Kideco Jaya Agung - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kepco SPC Power Corporation, Philippines
- Posco Energy - South Korea
- Bayan Resources Tbk. - Indonesia
- Carbofer General Trading SA - India
- Maheswari Brothers Coal Limited - India
- New Zealand Coal & Carbon
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- Bulk Trading Sa - Switzerland
- Cigading International Bulk Terminal - Indonesia
- Meralco Power Generation, Philippines
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Borneo Indobara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Merrill Lynch Commodities Europe
- Maharashtra Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- ICICI Bank Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sindya Power Generating Company Private Ltd
- Heidelberg Cement - Germany
- Tamil Nadu electricity Board
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Essar Steel Hazira Ltd - India
- Indo Tambangraya Megah - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Commonwealth Bank - Australia
- Central Electricity Authority - India
- Bharathi Cement Corporation - India
- Intertek Mineral Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- Kumho Petrochemical, South Korea
- Barasentosa Lestari - Indonesia
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