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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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Friday, 05 August 16
CAPESIZE : RATES ARE REMAINING AT DEPRESSING LEVELS DUE TO LACK OF FRESH CARGOES - FEARNLEYS
Supramax
Last week has been one of the slowest for some time with rates under pressure in most areas.
In its latest weekly report, shipbroke ...
Thursday, 04 August 16
INDONESIAN COAL PRICES ARE STARTING TO ZOOM HIGHER; HBA ROSE 10.13% TO US$ 58.37 PER TON
COALspot.com: The Indonesia coal benchmark price hits to its highest level since August 2015.
The Director General of Mineral and Coa ...
Thursday, 04 August 16
BREXIT: IMPLICATIONS FOR GLOBAL SHIPPING AND SEA TRADE - EVERSHEDS
The buzzword for the post-Brexit landscape both in Europe and further afield is ‘uncertainty’. No-one really knows the long term effect ...
Wednesday, 03 August 16
RECAAP INFORMATION SHARING CENTRE ISSUES SPECIAL REPORT ON THE ABDUCTING OF CREW FROM SHIPS IN WATERS OFF EASTERN SABAH AND SOUTHERN PHILIPPINES - THE STANDARD CLUB
KNOWLEDGE TO ELEVATE
In the light of three incidents where the crew of tug boats were abducted in the waters off Eastern Sabah and Southern Ph ...
Wednesday, 03 August 16
SHIPPING MARKET INSIGHT - EVA TZIMA
The Good…
Demand. Amidst all the unprecedented geopolitical turmoil and shifts in the likes of Brexit, the IMF lowered last month its glob ...
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- Larsen & Toubro Limited - India
- Energy Link Ltd, New Zealand
- Wilmar Investment Holdings
- Bhushan Steel Limited - India
- India Bulls Power Limited - India
- GVK Power & Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Standard Chartered Bank - UAE
- Electricity Generating Authority of Thailand
- Mintek Dendrill Indonesia
- Global Business Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
- Thai Mozambique Logistica
- Timah Investasi Mineral - Indoneisa
- Parliament of New Zealand
- Miang Besar Coal Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Baramulti Group, Indonesia
- Chettinad Cement Corporation Ltd - India
- Deloitte Consulting - India
- Asmin Koalindo Tuhup - Indonesia
- Intertek Mineral Services - Indonesia
- Coastal Gujarat Power Limited - India
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- Grasim Industreis Ltd - India
- Global Green Power PLC Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Commonwealth Bank - Australia
- Straits Asia Resources Limited - Singapore
- The University of Queensland
- Borneo Indobara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Formosa Plastics Group - Taiwan
- Kaltim Prima Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Semirara Mining Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Mercator Lines Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Energy Development Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Videocon Industries ltd - India
- ICICI Bank Limited - India
- Bukit Baiduri Energy - Indonesia
- Orica Mining Services - Indonesia
- Kumho Petrochemical, South Korea
- Ministry of Transport, Egypt
- Independent Power Producers Association of India
- Karaikal Port Pvt Ltd - India
- Anglo American - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Kepco SPC Power Corporation, Philippines
- Eastern Energy - Thailand
- International Coal Ventures Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Simpson Spence & Young - Indonesia
- Tata Chemicals Ltd - India
- Power Finance Corporation Ltd., India
- Siam City Cement PLC, Thailand
- Australian Commodity Traders Exchange
- SMG Consultants - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Minerals Council of Australia
- PTC India Limited - India
- Agrawal Coal Company - India
- Madhucon Powers Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- IHS Mccloskey Coal Group - USA
- Central Electricity Authority - India
- Coalindo Energy - Indonesia
- Sical Logistics Limited - India
- London Commodity Brokers - England
- GAC Shipping (India) Pvt Ltd
- Rio Tinto Coal - Australia
- GN Power Mariveles Coal Plant, Philippines
- VISA Power Limited - India
- Orica Australia Pty. Ltd.
- Bukit Makmur.PT - Indonesia
- Romanian Commodities Exchange
- Bhatia International Limited - India
- Semirara Mining and Power Corporation, Philippines
- Economic Council, Georgia
- Bayan Resources Tbk. - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Rashtriya Ispat Nigam Limited - India
- White Energy Company Limited
- Binh Thuan Hamico - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Renaissance Capital - South Africa
- Samtan Co., Ltd - South Korea
- Cement Manufacturers Association - India
- LBH Netherlands Bv - Netherlands
- Marubeni Corporation - India
- Latin American Coal - Colombia
- Jindal Steel & Power Ltd - India
- Aditya Birla Group - India
- Singapore Mercantile Exchange
- Indo Tambangraya Megah - Indonesia
- Tamil Nadu electricity Board
- Indian Energy Exchange, India
- Kalimantan Lumbung Energi - Indonesia
- Attock Cement Pakistan Limited
- PowerSource Philippines DevCo
- The Treasury - Australian Government
- Maharashtra Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Vijayanagar Sugar Pvt Ltd - India
- GMR Energy Limited - India
- Electricity Authority, New Zealand
- Petron Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Trasteel International SA, Italy
- Therma Luzon, Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Interocean Group of Companies - India
- SMC Global Power, Philippines
- Planning Commission, India
- Directorate Of Revenue Intelligence - India
- Cigading International Bulk Terminal - Indonesia
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- Eastern Coal Council - USA
- Australian Coal Association
- Vizag Seaport Private Limited - India
- Merrill Lynch Commodities Europe
- Star Paper Mills Limited - India
- Ind-Barath Power Infra Limited - India
- Sindya Power Generating Company Private Ltd
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- South Luzon Thermal Energy Corporation
- Gujarat Mineral Development Corp Ltd - India
- Jaiprakash Power Ventures ltd
- Uttam Galva Steels Limited - India
- Indogreen Group - Indonesia
- Parry Sugars Refinery, India
- Chamber of Mines of South Africa
- Bulk Trading Sa - Switzerland
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- Edison Trading Spa - Italy
- Essar Steel Hazira Ltd - India
- ASAPP Information Group - India
- Georgia Ports Authority, United States
- Salva Resources Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- CIMB Investment Bank - Malaysia
- Maheswari Brothers Coal Limited - India
- Indika Energy - Indonesia
- Heidelberg Cement - Germany
- OPG Power Generation Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- Carbofer General Trading SA - India
- Holcim Trading Pte Ltd - Singapore
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Riau Bara Harum - Indonesia
- Kideco Jaya Agung - Indonesia
- Kartika Selabumi Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- TeaM Sual Corporation - Philippines
- Bharathi Cement Corporation - India
- European Bulk Services B.V. - Netherlands
- Meralco Power Generation, Philippines
- Price Waterhouse Coopers - Russia
- Malabar Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- MS Steel International - UAE
- Sojitz Corporation - Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thiess Contractors Indonesia
- Mjunction Services Limited - India
- Vedanta Resources Plc - India
- Lanco Infratech Ltd - India
- Wood Mackenzie - Singapore
- SN Aboitiz Power Inc, Philippines
- Indian Oil Corporation Limited
- Xindia Steels Limited - India
- Bhoruka Overseas - Indonesia
- McConnell Dowell - Australia
- Port Waratah Coal Services - Australia
- Banpu Public Company Limited - Thailand
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- Ambuja Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ceylon Electricity Board - Sri Lanka
- Karbindo Abesyapradhi - Indoneisa
- Antam Resourcindo - Indonesia
- Siam City Cement - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Medco Energi Mining Internasional
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Gujarat Sidhee Cement - India
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Goldman Sachs - Singapore
- Coal and Oil Company - UAE
- Ministry of Mines - Canada
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