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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, 07 February 18
SHIPPING MARKET INSIGHT - KATERINA RESTIS
Crude oil supply has been reported to have grown by approx. 2.5% reaching 40.1m bpd in 2017. However, tanker charter rates have been under pressure ...
Tuesday, 06 February 18
THE FUNDAMENTALS FOR INDIAN COAL IMPORTS CONTINUE TO LOOK PROMISING - TORVALD KLAVENESS
Back in August we reported that the fundamentals impacting Indian coal imports looked more promising.
Trade flow data today implies 17.4Mt of ...
Monday, 05 February 18
SUPRAMAX : INDONESIA TO INDIA PASSING THROUGH SINGAPORE HAS SOFTENED
COALspot.com: The daily average earnings for Supramax, for the route Indonesia to India passing through Singapore has softened, week over week, own ...
Friday, 02 February 18
SUPRAMAX : INDONESIA TO CHINA COAL TRIPS ARE PAYING AROUND MID USD 9000 - FEARNLEYS
Supramax
Rather quiet week within Atl, specially Continent due to lack of cargoes.
According to Fearnleys Weekly - Dry bulk report published ...
Friday, 02 February 18
U.S. YEAR-TO-DATE COAL PRODUCTION TOTALED 54.1 MMST, DOWN 8.8% YOY - EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 15.3 million short tons ...
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Showing 1816 to 1820 news of total 6871 |
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- GVK Power & Infra Limited - India
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
- Maharashtra Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Antam Resourcindo - Indonesia
- Banpu Public Company Limited - Thailand
- Rio Tinto Coal - Australia
- Toyota Tsusho Corporation, Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sojitz Corporation - Japan
- SMC Global Power, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Salva Resources Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thiess Contractors Indonesia
- Mintek Dendrill Indonesia
- Central Java Power - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Renaissance Capital - South Africa
- Gujarat Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- Carbofer General Trading SA - India
- ICICI Bank Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Latin American Coal - Colombia
- McConnell Dowell - Australia
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- The University of Queensland
- Malabar Cements Ltd - India
- Madhucon Powers Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- Coastal Gujarat Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Indogreen Group - Indonesia
- IEA Clean Coal Centre - UK
- PNOC Exploration Corporation - Philippines
- Deloitte Consulting - India
- Bulk Trading Sa - Switzerland
- Larsen & Toubro Limited - India
- GAC Shipping (India) Pvt Ltd
- Miang Besar Coal Terminal - Indonesia
- Tata Chemicals Ltd - India
- Mercuria Energy - Indonesia
- Energy Link Ltd, New Zealand
- Orica Australia Pty. Ltd.
- Dalmia Cement Bharat India
- Indian Energy Exchange, India
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Sindya Power Generating Company Private Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indonesian Coal Mining Association
- Standard Chartered Bank - UAE
- Coal and Oil Company - UAE
- Directorate General of MIneral and Coal - Indonesia
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- Savvy Resources Ltd - HongKong
- Electricity Authority, New Zealand
- Agrawal Coal Company - India
- Bhushan Steel Limited - India
- Oldendorff Carriers - Singapore
- Bhatia International Limited - India
- Cement Manufacturers Association - India
- Gujarat Mineral Development Corp Ltd - India
- PTC India Limited - India
- Essar Steel Hazira Ltd - India
- SMG Consultants - Indonesia
- Electricity Generating Authority of Thailand
- Indian Oil Corporation Limited
- Marubeni Corporation - India
- Kideco Jaya Agung - Indonesia
- Semirara Mining Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- India Bulls Power Limited - India
- Romanian Commodities Exchange
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- CNBM International Corporation - China
- Tamil Nadu electricity Board
- Formosa Plastics Group - Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Minerals Council of Australia
- Semirara Mining and Power Corporation, Philippines
- Chamber of Mines of South Africa
- Bayan Resources Tbk. - Indonesia
- Ministry of Transport, Egypt
- Ceylon Electricity Board - Sri Lanka
- Goldman Sachs - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Jindal Steel & Power Ltd - India
- Alfred C Toepfer International GmbH - Germany
- GMR Energy Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Indika Energy - Indonesia
- Economic Council, Georgia
- Ministry of Mines - Canada
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vizag Seaport Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Manunggal Multi Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Port Waratah Coal Services - Australia
- White Energy Company Limited
- Makarim & Taira - Indonesia
- PowerSource Philippines DevCo
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Edison Trading Spa - Italy
- Samtan Co., Ltd - South Korea
- Uttam Galva Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kumho Petrochemical, South Korea
- Aboitiz Power Corporation - Philippines
- Eastern Energy - Thailand
- Merrill Lynch Commodities Europe
- European Bulk Services B.V. - Netherlands
- Binh Thuan Hamico - Vietnam
- Bangladesh Power Developement Board
- OPG Power Generation Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Bhoruka Overseas - Indonesia
- LBH Netherlands Bv - Netherlands
- Medco Energi Mining Internasional
- Planning Commission, India
- Trasteel International SA, Italy
- International Coal Ventures Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Riau Bara Harum - Indonesia
- Therma Luzon, Inc, Philippines
- Heidelberg Cement - Germany
- Indo Tambangraya Megah - Indonesia
- Borneo Indobara - Indonesia
- Kobexindo Tractors - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TeaM Sual Corporation - Philippines
- Gujarat Sidhee Cement - India
- Coalindo Energy - Indonesia
- Meralco Power Generation, Philippines
- London Commodity Brokers - England
- Global Coal Blending Company Limited - Australia
- Sical Logistics Limited - India
- Kaltim Prima Coal - Indonesia
- Australian Coal Association
- Altura Mining Limited, Indonesia
- Central Electricity Authority - India
- Global Business Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Bukit Makmur.PT - Indonesia
- Eastern Coal Council - USA
- Petron Corporation, Philippines
- Wood Mackenzie - Singapore
- VISA Power Limited - India
- Commonwealth Bank - Australia
- South Luzon Thermal Energy Corporation
- Posco Energy - South Korea
- Orica Mining Services - Indonesia
- Lanco Infratech Ltd - India
- MS Steel International - UAE
- Jorong Barutama Greston.PT - Indonesia
- Georgia Ports Authority, United States
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement PLC, Thailand
- Timah Investasi Mineral - Indoneisa
- CIMB Investment Bank - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Thai Mozambique Logistica
- Mercator Lines Limited - India
- Africa Commodities Group - South Africa
- The State Trading Corporation of India Ltd
- Ministry of Finance - Indonesia
- Kepco SPC Power Corporation, Philippines
- ASAPP Information Group - India
- Ambuja Cements Ltd - India
- Independent Power Producers Association of India
- Energy Development Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Attock Cement Pakistan Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jaiprakash Power Ventures ltd
- Pendopo Energi Batubara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Sakthi Sugars Limited - India
- Ind-Barath Power Infra Limited - India
- Parliament of New Zealand
- Bharathi Cement Corporation - India
- Singapore Mercantile Exchange
- Grasim Industreis Ltd - India
- New Zealand Coal & Carbon
- Power Finance Corporation Ltd., India
- Baramulti Group, Indonesia
- Karaikal Port Pvt Ltd - India
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- Price Waterhouse Coopers - Russia
- Aditya Birla Group - India
- Bukit Baiduri Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- San Jose City I Power Corp, Philippines
- Xindia Steels Limited - India
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