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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, 12 July 18
SUPRAMAX: INDO/CHINA COAL RV IS BEING FIXED AROUND USD 10500 BSS SINGAPORE - FEARNLEYS
Capesize
Cape market continue to be extremely volatile says Fearnleys in its latst weekly report.
The further noted that, last week ended wi ...
Tuesday, 10 July 18
SHIPPING MARKET ANALYSIS - GEORGE LAZARIDIS
The trade dispute saga continued over the past week, as new tariffs were put into force on Friday in both the U.S. and China and have already taken ...
Tuesday, 10 July 18
SUPPORTING SULPHUR 2020 CONSISTENT IMPLEMENTATION - IMO
An IMO working group is meeting (9-13 July) to develop guidelines to support the consistent implementation of the 0.50% limit for the sulphur conte ...
Monday, 09 July 18
RISING COAL PRICES LIFTING AUSTRALIA'S EXPORT REVENUES BUT INVESTORS STAYING AWAY - NEWCASTLE HERALD
Newcastle coal prices have risen more than 40 per cent in a year to be at their highest levels for seven years but the industry is becoming increas ...
Saturday, 07 July 18
SUPRAMAX: THE ASIAN MARKET STRUGGLED; A 57K-DWT WAS REPORTED FIXED BASIS DELIVERY SINGAPORE FOR A TRIP VIA INDONESIA REDELIVERY INDIA AT $12K
Capesize
A punchy week for the big ships that saw Atlantic rates soar, with the tonnage list tight prompting charterers to split cargoes, thoug ...
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- Standard Chartered Bank - UAE
- Ministry of Transport, Egypt
- Sarangani Energy Corporation, Philippines
- Semirara Mining Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Kaltim Prima Coal - Indonesia
- Singapore Mercantile Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- Mintek Dendrill Indonesia
- CNBM International Corporation - China
- PetroVietnam Power Coal Import and Supply Company
- Star Paper Mills Limited - India
- Baramulti Group, Indonesia
- Global Coal Blending Company Limited - Australia
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- Renaissance Capital - South Africa
- Indika Energy - Indonesia
- Electricity Generating Authority of Thailand
- Aboitiz Power Corporation - Philippines
- Tamil Nadu electricity Board
- Therma Luzon, Inc, Philippines
- PTC India Limited - India
- CIMB Investment Bank - Malaysia
- Riau Bara Harum - Indonesia
- Bhushan Steel Limited - India
- Planning Commission, India
- Sindya Power Generating Company Private Ltd
- Indonesian Coal Mining Association
- Jaiprakash Power Ventures ltd
- IEA Clean Coal Centre - UK
- Australian Commodity Traders Exchange
- Vedanta Resources Plc - India
- Power Finance Corporation Ltd., India
- Makarim & Taira - Indonesia
- Orica Mining Services - Indonesia
- Tata Chemicals Ltd - India
- Globalindo Alam Lestari - Indonesia
- Minerals Council of Australia
- SN Aboitiz Power Inc, Philippines
- Bharathi Cement Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Straits Asia Resources Limited - Singapore
- Gujarat Electricity Regulatory Commission - India
- Parliament of New Zealand
- Thiess Contractors Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Medco Energi Mining Internasional
- The Treasury - Australian Government
- Semirara Mining and Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Oil Corporation Limited
- Uttam Galva Steels Limited - India
- India Bulls Power Limited - India
- GMR Energy Limited - India
- Leighton Contractors Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Directorate Of Revenue Intelligence - India
- Indogreen Group - Indonesia
- San Jose City I Power Corp, Philippines
- Grasim Industreis Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- VISA Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Rio Tinto Coal - Australia
- ICICI Bank Limited - India
- Romanian Commodities Exchange
- Bukit Makmur.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Goldman Sachs - Singapore
- Carbofer General Trading SA - India
- Coal and Oil Company - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Kobexindo Tractors - Indoneisa
- Binh Thuan Hamico - Vietnam
- Central Electricity Authority - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Anglo American - United Kingdom
- Trasteel International SA, Italy
- Coastal Gujarat Power Limited - India
- Bangladesh Power Developement Board
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- Bhatia International Limited - India
- Chamber of Mines of South Africa
- Gujarat Sidhee Cement - India
- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
- Meralco Power Generation, Philippines
- Simpson Spence & Young - Indonesia
- Ministry of Mines - Canada
- Aditya Birla Group - India
- SMC Global Power, Philippines
- Posco Energy - South Korea
- International Coal Ventures Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Manunggal Multi Energi - Indonesia
- Merrill Lynch Commodities Europe
- TeaM Sual Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Latin American Coal - Colombia
- Attock Cement Pakistan Limited
- Parry Sugars Refinery, India
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- McConnell Dowell - Australia
- Coalindo Energy - Indonesia
- Barasentosa Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- MS Steel International - UAE
- AsiaOL BioFuels Corp., Philippines
- Iligan Light & Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Central Java Power - Indonesia
- Metalloyd Limited - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- The University of Queensland
- South Luzon Thermal Energy Corporation
- Vijayanagar Sugar Pvt Ltd - India
- White Energy Company Limited
- PowerSource Philippines DevCo
- Indian Energy Exchange, India
- Mjunction Services Limited - India
- Sinarmas Energy and Mining - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Mercuria Energy - Indonesia
- Madhucon Powers Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Economic Council, Georgia
- Kumho Petrochemical, South Korea
- Altura Mining Limited, Indonesia
- Global Green Power PLC Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Dalmia Cement Bharat India
- Banpu Public Company Limited - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Bulk Trading Sa - Switzerland
- Petron Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Energy Development Corp, Philippines
- Marubeni Corporation - India
- SMG Consultants - Indonesia
- Kideco Jaya Agung - Indonesia
- Bayan Resources Tbk. - Indonesia
- Samtan Co., Ltd - South Korea
- Wood Mackenzie - Singapore
- Deloitte Consulting - India
- Alfred C Toepfer International GmbH - Germany
- Essar Steel Hazira Ltd - India
- Jindal Steel & Power Ltd - India
- Independent Power Producers Association of India
- Rashtriya Ispat Nigam Limited - India
- Sakthi Sugars Limited - India
- The State Trading Corporation of India Ltd
- Pendopo Energi Batubara - Indonesia
- Indo Tambangraya Megah - Indonesia
- Ministry of Finance - Indonesia
- Wilmar Investment Holdings
- Ambuja Cements Ltd - India
- Orica Australia Pty. Ltd.
- Xindia Steels Limited - India
- Formosa Plastics Group - Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Larsen & Toubro Limited - India
- Billiton Holdings Pty Ltd - Australia
- Lanco Infratech Ltd - India
- European Bulk Services B.V. - Netherlands
- Kepco SPC Power Corporation, Philippines
- Commonwealth Bank - Australia
- Price Waterhouse Coopers - Russia
- IHS Mccloskey Coal Group - USA
- Krishnapatnam Port Company Ltd. - India
- GN Power Mariveles Coal Plant, Philippines
- Sical Logistics Limited - India
- Kartika Selabumi Mining - Indonesia
- Vizag Seaport Private Limited - India
- ASAPP Information Group - India
- Meenaskhi Energy Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Business Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Timah Investasi Mineral - Indoneisa
- Africa Commodities Group - South Africa
- Salva Resources Pvt Ltd - India
- New Zealand Coal & Carbon
- Mercator Lines Limited - India
- Agrawal Coal Company - India
- Oldendorff Carriers - Singapore
- London Commodity Brokers - England
- Siam City Cement - Thailand
- Karaikal Port Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Intertek Mineral Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Heidelberg Cement - Germany
- Eastern Energy - Thailand
- Georgia Ports Authority, United States
- Siam City Cement PLC, Thailand
- Australian Coal Association
- Ind-Barath Power Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- Videocon Industries ltd - India
- GVK Power & Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Sojitz Corporation - Japan
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