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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, 10 December 15
CANADIAN MINER TECK ANNOUNCES LNG HAUL TRUCK PILOT PROJECT
Teck Resources Limited is piloting the use of liquefied natural gas (LNG) as a fuel source in six haul trucks at its Fording River steelmakin ...
Thursday, 10 December 15
FOB RICHARDS BAY COAL Q3' 16 DELIVERY SWAP WAS CLOSED 7.27% PER TON LOWER COMPARED TO AVERAGE Q1' 16 DELIVERY PRICE
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q1’ 2016 decline month over month and week over week.
The Q1’ 2016 &nbs ...
Wednesday, 09 December 15
U.S. COAL EXPORTS DECLINE IN 2015 DUE TO SLOWER GROWTH IN WORLD COAL DEMAND AND LOWER INTERNATIONAL COAL PRICES - EIA
COALspot.com: The slower growth in world coal demand and lower international coal prices have contributed to a decline in U.S. coal exports in 2015 ...
Wednesday, 09 December 15
DRY BULK EXPERIENCES THE PERFECT STORM - PANOS TSILINGIRIS
Dry bulk experiences the perfect storm as the slowing of demand predominantly because of China sat atop the exaggerated oversupply. The BDI broke t ...
Tuesday, 08 December 15
OPEC'S DECISION BODES WELL FOR THE TANKER MARKET: STRONG MIDDLE EAST CRUDE EXPORTS WILL CONTINUE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
OPEC’s latest decision to keep up oil production is seen by shipbrokers as a further boost for the tanker market. At the end of last year OPE ...
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- Kideco Jaya Agung - Indonesia
- Metalloyd Limited - United Kingdom
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Sojitz Corporation - Japan
- Uttam Galva Steels Limited - India
- Indian Energy Exchange, India
- Kapuas Tunggal Persada - Indonesia
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Pipit Mutiara Jaya. PT, Indonesia
- Savvy Resources Ltd - HongKong
- Aboitiz Power Corporation - Philippines
- Georgia Ports Authority, United States
- Central Electricity Authority - India
- Sarangani Energy Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- Commonwealth Bank - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Deloitte Consulting - India
- Edison Trading Spa - Italy
- Karbindo Abesyapradhi - Indoneisa
- PNOC Exploration Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- CIMB Investment Bank - Malaysia
- Goldman Sachs - Singapore
- Tata Chemicals Ltd - India
- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- Tamil Nadu electricity Board
- PetroVietnam Power Coal Import and Supply Company
- Africa Commodities Group - South Africa
- Borneo Indobara - Indonesia
- ICICI Bank Limited - India
- Miang Besar Coal Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Madhucon Powers Ltd - India
- Coalindo Energy - Indonesia
- Energy Link Ltd, New Zealand
- Binh Thuan Hamico - Vietnam
- Global Green Power PLC Corporation, Philippines
- Vizag Seaport Private Limited - India
- Larsen & Toubro Limited - India
- Billiton Holdings Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Carbofer General Trading SA - India
- Baramulti Group, Indonesia
- Agrawal Coal Company - India
- Semirara Mining and Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Cement Manufacturers Association - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Latin American Coal - Colombia
- Ministry of Transport, Egypt
- Orica Mining Services - Indonesia
- Posco Energy - South Korea
- Formosa Plastics Group - Taiwan
- The University of Queensland
- Oldendorff Carriers - Singapore
- Riau Bara Harum - Indonesia
- Samtan Co., Ltd - South Korea
- CNBM International Corporation - China
- White Energy Company Limited
- ASAPP Information Group - India
- European Bulk Services B.V. - Netherlands
- Kaltim Prima Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- TeaM Sual Corporation - Philippines
- Bhushan Steel Limited - India
- SMC Global Power, Philippines
- Iligan Light & Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Bulk Trading Sa - Switzerland
- Indika Energy - Indonesia
- Australian Coal Association
- GN Power Mariveles Coal Plant, Philippines
- Eastern Coal Council - USA
- Minerals Council of Australia
- Bayan Resources Tbk. - Indonesia
- Star Paper Mills Limited - India
- Videocon Industries ltd - India
- Independent Power Producers Association of India
- Power Finance Corporation Ltd., India
- Petrochimia International Co. Ltd.- Taiwan
- Attock Cement Pakistan Limited
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- IEA Clean Coal Centre - UK
- Parry Sugars Refinery, India
- Singapore Mercantile Exchange
- Essar Steel Hazira Ltd - India
- Maheswari Brothers Coal Limited - India
- Ceylon Electricity Board - Sri Lanka
- McConnell Dowell - Australia
- Standard Chartered Bank - UAE
- Vedanta Resources Plc - India
- Romanian Commodities Exchange
- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asmin Koalindo Tuhup - Indonesia
- Jaiprakash Power Ventures ltd
- Altura Mining Limited, Indonesia
- Dalmia Cement Bharat India
- Xindia Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Manunggal Multi Energi - Indonesia
- India Bulls Power Limited - India
- Aditya Birla Group - India
- Bangladesh Power Developement Board
- LBH Netherlands Bv - Netherlands
- Directorate Of Revenue Intelligence - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- The Treasury - Australian Government
- Gujarat Sidhee Cement - India
- Cigading International Bulk Terminal - Indonesia
- Indogreen Group - Indonesia
- PTC India Limited - India
- Central Java Power - Indonesia
- Banpu Public Company Limited - Thailand
- Price Waterhouse Coopers - Russia
- Rashtriya Ispat Nigam Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sakthi Sugars Limited - India
- Petron Corporation, Philippines
- The State Trading Corporation of India Ltd
- Kumho Petrochemical, South Korea
- Bukit Baiduri Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Mercuria Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Ministry of Finance - Indonesia
- Malabar Cements Ltd - India
- Electricity Generating Authority of Thailand
- IHS Mccloskey Coal Group - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Straits Asia Resources Limited - Singapore
- Ambuja Cements Ltd - India
- Parliament of New Zealand
- Semirara Mining Corp, Philippines
- Thai Mozambique Logistica
- Bhatia International Limited - India
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- VISA Power Limited - India
- Salva Resources Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Marubeni Corporation - India
- Medco Energi Mining Internasional
- MS Steel International - UAE
- Australian Commodity Traders Exchange
- Therma Luzon, Inc, Philippines
- London Commodity Brokers - England
- Mercator Lines Limited - India
- Indonesian Coal Mining Association
- TNB Fuel Sdn Bhd - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- New Zealand Coal & Carbon
- Globalindo Alam Lestari - Indonesia
- Sical Logistics Limited - India
- Siam City Cement PLC, Thailand
- Global Business Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Orica Australia Pty. Ltd.
- Makarim & Taira - Indonesia
- PowerSource Philippines DevCo
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Mineral Development Corp Ltd - India
- Energy Development Corp, Philippines
- Coastal Gujarat Power Limited - India
- Sree Jayajothi Cements Limited - India
- Barasentosa Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Rio Tinto Coal - Australia
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- Lanco Infratech Ltd - India
- Siam City Cement - Thailand
- Heidelberg Cement - Germany
- Kobexindo Tractors - Indoneisa
- Coal and Oil Company - UAE
- SMG Consultants - Indonesia
- Anglo American - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Thiess Contractors Indonesia
- Wood Mackenzie - Singapore
- Chettinad Cement Corporation Ltd - India
- Bharathi Cement Corporation - India
- Antam Resourcindo - Indonesia
- GAC Shipping (India) Pvt Ltd
- Electricity Authority, New Zealand
- Interocean Group of Companies - India
- Renaissance Capital - South Africa
- Pendopo Energi Batubara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Sinarmas Energy and Mining - Indonesia
- Mjunction Services Limited - India
- Mintek Dendrill Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- Wilmar Investment Holdings
- Economic Council, Georgia
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