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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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Monday, 15 January 18
QUEENSLAND SHIPPED 210.8 MT OF COAL IN 2017, DOWN 5% YOY QUEENSLAND RESOURCES COUNCIL
Queensland's coal exports over the 12 months reached 210.8 mt which is down 10 mt or 5 per cent from the previous year’s record of 220.8 ...
Thursday, 11 January 18
SUPRAMAX: INDO TO CHINA COAL ROUNDS FIXING AT AROUND $10K - FEARNLEYS
Supramax
USG rates improved both for backhaul and fronthaul, Ultras from USG to Japan receiving around $26k daily while supras 1-2k less for same ...
Wednesday, 10 January 18
2018: IT IS PROJECTED, THE SHIPBUILDERS WILL DELIVER FOUR HUNDRED FORTY NEW VESSELS IN 2018
Headlines from IMF's 2017 – World Economic Outlook:
January 2017 - “After a lacklustre outturn in 2016, economic activity is p ...
Tuesday, 09 January 18
INDONESIAN GOVERNMENT DECLARED COAL REFERENCE PRICE UP IN JANUARY
COALspot.com: the Indonesian Coal Price Reference ( HBA) rose 1.60 per cent in January 2018, the latest ministerial decree showed.
The benchma ...
Friday, 05 January 18
U.S. WEEKLY COAL OUTPUT FELL 32.4% PER CENT WEEK OVER WEEK, SAYS EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 10.5 million short tons ...
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- Electricity Authority, New Zealand
- Sree Jayajothi Cements Limited - India
- Timah Investasi Mineral - Indoneisa
- Semirara Mining Corp, Philippines
- Riau Bara Harum - Indonesia
- Pendopo Energi Batubara - Indonesia
- PTC India Limited - India
- Indika Energy - Indonesia
- Chamber of Mines of South Africa
- Ceylon Electricity Board - Sri Lanka
- Price Waterhouse Coopers - Russia
- The State Trading Corporation of India Ltd
- Latin American Coal - Colombia
- Rashtriya Ispat Nigam Limited - India
- Bulk Trading Sa - Switzerland
- Global Coal Blending Company Limited - Australia
- Kumho Petrochemical, South Korea
- Aboitiz Power Corporation - Philippines
- Agrawal Coal Company - India
- Deloitte Consulting - India
- Thai Mozambique Logistica
- Madhucon Powers Ltd - India
- Tata Chemicals Ltd - India
- Sical Logistics Limited - India
- Energy Development Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- Heidelberg Cement - Germany
- Ministry of Transport, Egypt
- Central Java Power - Indonesia
- PowerSource Philippines DevCo
- Kobexindo Tractors - Indoneisa
- Intertek Mineral Services - Indonesia
- VISA Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Makarim & Taira - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMG Consultants - Indonesia
- Binh Thuan Hamico - Vietnam
- Therma Luzon, Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Carbofer General Trading SA - India
- GMR Energy Limited - India
- Bhoruka Overseas - Indonesia
- Edison Trading Spa - Italy
- Toyota Tsusho Corporation, Japan
- Kideco Jaya Agung - Indonesia
- Coal and Oil Company - UAE
- Karaikal Port Pvt Ltd - India
- Malabar Cements Ltd - India
- Mercator Lines Limited - India
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Sojitz Corporation - Japan
- White Energy Company Limited
- SN Aboitiz Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Grasim Industreis Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Kalimantan Lumbung Energi - Indonesia
- Mercuria Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Minerals Council of Australia
- Bangladesh Power Developement Board
- Semirara Mining and Power Corporation, Philippines
- Goldman Sachs - Singapore
- Indonesian Coal Mining Association
- PetroVietnam Power Coal Import and Supply Company
- Energy Link Ltd, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Kaltim Prima Coal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- Australian Commodity Traders Exchange
- Aditya Birla Group - India
- Independent Power Producers Association of India
- Bukit Baiduri Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Petron Corporation, Philippines
- Eastern Coal Council - USA
- Miang Besar Coal Terminal - Indonesia
- Planning Commission, India
- London Commodity Brokers - England
- Gujarat Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Sakthi Sugars Limited - India
- Commonwealth Bank - Australia
- McConnell Dowell - Australia
- Holcim Trading Pte Ltd - Singapore
- New Zealand Coal & Carbon
- TeaM Sual Corporation - Philippines
- Parry Sugars Refinery, India
- TNB Fuel Sdn Bhd - Malaysia
- Mintek Dendrill Indonesia
- Global Business Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Coalindo Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Indo Tambangraya Megah - Indonesia
- PNOC Exploration Corporation - Philippines
- Electricity Generating Authority of Thailand
- Larsen & Toubro Limited - India
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
- Cement Manufacturers Association - India
- Manunggal Multi Energi - Indonesia
- Antam Resourcindo - Indonesia
- Romanian Commodities Exchange
- Central Electricity Authority - India
- The Treasury - Australian Government
- ASAPP Information Group - India
- Siam City Cement - Thailand
- Wilmar Investment Holdings
- Pipit Mutiara Jaya. PT, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- MS Steel International - UAE
- South Luzon Thermal Energy Corporation
- Essar Steel Hazira Ltd - India
- The University of Queensland
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Lanco Infratech Ltd - India
- Jaiprakash Power Ventures ltd
- Tamil Nadu electricity Board
- Africa Commodities Group - South Africa
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
- Sindya Power Generating Company Private Ltd
- GVK Power & Infra Limited - India
- Iligan Light & Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Anglo American - United Kingdom
- Ind-Barath Power Infra Limited - India
- Rio Tinto Coal - Australia
- Eastern Energy - Thailand
- Gujarat Sidhee Cement - India
- Chettinad Cement Corporation Ltd - India
- Power Finance Corporation Ltd., India
- Asmin Koalindo Tuhup - Indonesia
- Interocean Group of Companies - India
- Marubeni Corporation - India
- Bhatia International Limited - India
- Indogreen Group - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Coal Association
- Port Waratah Coal Services - Australia
- Indian Energy Exchange, India
- Barasentosa Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Renaissance Capital - South Africa
- Videocon Industries ltd - India
- Samtan Co., Ltd - South Korea
- Sarangani Energy Corporation, Philippines
- Baramulti Group, Indonesia
- Bharathi Cement Corporation - India
- Xindia Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Trasteel International SA, Italy
- Vijayanagar Sugar Pvt Ltd - India
- Thiess Contractors Indonesia
- Oldendorff Carriers - Singapore
- San Jose City I Power Corp, Philippines
- Economic Council, Georgia
- Mjunction Services Limited - India
- LBH Netherlands Bv - Netherlands
- CNBM International Corporation - China
- Dalmia Cement Bharat India
- Siam City Cement PLC, Thailand
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- Banpu Public Company Limited - Thailand
- Merrill Lynch Commodities Europe
- Altura Mining Limited, Indonesia
- Coastal Gujarat Power Limited - India
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- India Bulls Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Vedanta Resources Plc - India
- Simpson Spence & Young - Indonesia
- Bhushan Steel Limited - India
- Global Green Power PLC Corporation, Philippines
- IEA Clean Coal Centre - UK
- Krishnapatnam Port Company Ltd. - India
- European Bulk Services B.V. - Netherlands
- ICICI Bank Limited - India
- CIMB Investment Bank - Malaysia
- Savvy Resources Ltd - HongKong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Georgia Ports Authority, United States
- Indian Oil Corporation Limited
- Singapore Mercantile Exchange
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- Medco Energi Mining Internasional
- Borneo Indobara - Indonesia
- Posco Energy - South Korea
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