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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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- San Jose City I Power Corp, Philippines
- Vizag Seaport Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- ICICI Bank Limited - India
- Georgia Ports Authority, United States
- CIMB Investment Bank - Malaysia
- Samtan Co., Ltd - South Korea
- The Treasury - Australian Government
- Bukit Baiduri Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- Lanco Infratech Ltd - India
- Minerals Council of Australia
- Chettinad Cement Corporation Ltd - India
- Star Paper Mills Limited - India
- Marubeni Corporation - India
- Manunggal Multi Energi - Indonesia
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- PowerSource Philippines DevCo
- Deloitte Consulting - India
- Energy Link Ltd, New Zealand
- Malabar Cements Ltd - India
- Wilmar Investment Holdings
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Ambuja Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Pendopo Energi Batubara - Indonesia
- Mjunction Services Limited - India
- Ceylon Electricity Board - Sri Lanka
- Videocon Industries ltd - India
- Singapore Mercantile Exchange
- Billiton Holdings Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Essar Steel Hazira Ltd - India
- Central Java Power - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- Romanian Commodities Exchange
- Straits Asia Resources Limited - Singapore
- Dalmia Cement Bharat India
- Ministry of Finance - Indonesia
- LBH Netherlands Bv - Netherlands
- Iligan Light & Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- London Commodity Brokers - England
- Jorong Barutama Greston.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- Parliament of New Zealand
- Interocean Group of Companies - India
- Kumho Petrochemical, South Korea
- Mercuria Energy - Indonesia
- Baramulti Group, Indonesia
- Port Waratah Coal Services - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Tata Chemicals Ltd - India
- Attock Cement Pakistan Limited
- Directorate General of MIneral and Coal - Indonesia
- New Zealand Coal & Carbon
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Electricity Generating Authority of Thailand
- Tamil Nadu electricity Board
- Ministry of Transport, Egypt
- AsiaOL BioFuels Corp., Philippines
- Meenaskhi Energy Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Indian Oil Corporation Limited
- Kideco Jaya Agung - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Coal Council - USA
- Eastern Energy - Thailand
- Ministry of Mines - Canada
- Planning Commission, India
- Chamber of Mines of South Africa
- PTC India Limited - India
- Bulk Trading Sa - Switzerland
- Central Electricity Authority - India
- Global Green Power PLC Corporation, Philippines
- Independent Power Producers Association of India
- Rio Tinto Coal - Australia
- Standard Chartered Bank - UAE
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Bhatia International Limited - India
- Semirara Mining and Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Petron Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Barasentosa Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Indogreen Group - Indonesia
- Grasim Industreis Ltd - India
- Riau Bara Harum - Indonesia
- Aditya Birla Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- SMC Global Power, Philippines
- Mercator Lines Limited - India
- The University of Queensland
- VISA Power Limited - India
- Larsen & Toubro Limited - India
- Goldman Sachs - Singapore
- SMG Consultants - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Timah Investasi Mineral - Indoneisa
- MS Steel International - UAE
- GVK Power & Infra Limited - India
- Coal and Oil Company - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IEA Clean Coal Centre - UK
- Maharashtra Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Bangladesh Power Developement Board
- Leighton Contractors Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- White Energy Company Limited
- Mintek Dendrill Indonesia
- Siam City Cement - Thailand
- International Coal Ventures Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Karaikal Port Pvt Ltd - India
- Posco Energy - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- Economic Council, Georgia
- IHS Mccloskey Coal Group - USA
- Madhucon Powers Ltd - India
- India Bulls Power Limited - India
- Australian Coal Association
- Africa Commodities Group - South Africa
- Sakthi Sugars Limited - India
- Thiess Contractors Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Borneo Indobara - Indonesia
- Kobexindo Tractors - Indoneisa
- Latin American Coal - Colombia
- Coalindo Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Cement Manufacturers Association - India
- Orica Mining Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Bayan Resources Tbk. - Indonesia
- Indika Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Antam Resourcindo - Indonesia
- Edison Trading Spa - Italy
- ASAPP Information Group - India
- Therma Luzon, Inc, Philippines
- Jindal Steel & Power Ltd - India
- McConnell Dowell - Australia
- Bukit Makmur.PT - Indonesia
- Medco Energi Mining Internasional
- Kapuas Tunggal Persada - Indonesia
- Metalloyd Limited - United Kingdom
- Vedanta Resources Plc - India
- Gujarat Mineral Development Corp Ltd - India
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- Global Business Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Anglo American - United Kingdom
- Carbofer General Trading SA - India
- Merrill Lynch Commodities Europe
- Formosa Plastics Group - Taiwan
- Altura Mining Limited, Indonesia
- Coastal Gujarat Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Sree Jayajothi Cements Limited - India
- Salva Resources Pvt Ltd - India
- Wood Mackenzie - Singapore
- Australian Commodity Traders Exchange
- Agrawal Coal Company - India
- Uttam Galva Steels Limited - India
- Banpu Public Company Limited - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Aboitiz Power Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Sinarmas Energy and Mining - Indonesia
- Energy Development Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Orica Australia Pty. Ltd.
- Commonwealth Bank - Australia
- Vijayanagar Sugar Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Xindia Steels Limited - India
- Sical Logistics Limited - India
- Bhushan Steel Limited - India
- Oldendorff Carriers - Singapore
- Alfred C Toepfer International GmbH - Germany
- OPG Power Generation Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- PNOC Exploration Corporation - Philippines
- Makarim & Taira - Indonesia
- Power Finance Corporation Ltd., India
- CNBM International Corporation - China
- Trasteel International SA, Italy
- Heidelberg Cement - Germany
- TeaM Sual Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Siam City Cement PLC, Thailand
- GMR Energy Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Savvy Resources Ltd - HongKong
- Sojitz Corporation - Japan
- Kaltim Prima Coal - Indonesia
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