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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, 17 July 15
DO CANCELLATION RIGHTS UNDER VOYAGE CHARTERPARTY SURVIVE RE-NOMINATION OF LOAD PORT? - INCE&CO
KNOWLEDGE TO ELEVATE
Do cancellation rights under voyage charterparty survive re-nomination of load port?
St Shipping & Transport Inc ...
Thursday, 16 July 15
INDONESIA'S HBA HITS ALL-TIME LOW OF $59.16 PER METRIC TON IN JULY 2015
COALspot.com - The Director General of Mineral and Coal of Indonesia revised down Indonesian coal benchmark price once again to US$ 59.16 pe ...
Thursday, 16 July 15
FOB RICHARDS BAY COAL SWAPS DECLINE W-O-W, M-O-M
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q3' 2015 declined month over month and week over week.
The Q3 swap was down US$ ...
Wednesday, 15 July 15
WEEKLY SHIPPING MARKET INSIGHT - INTERMODAL
The last few weeks have been rather strenuous for Greece and China, each for their own reasons, affecting most markets around the world. In Greece ...
Wednesday, 15 July 15
IRAN OIL RECOVERY TO TAKE YEARS, BUT COULD START IN 2016 - FITCH
Iranian crude oil production is likely to increase in 2016 but will take a number of years to reach its previous peak, Fitch Ratings says.
The ...
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- ICICI Bank Limited - India
- Maheswari Brothers Coal Limited - India
- Parry Sugars Refinery, India
- Globalindo Alam Lestari - Indonesia
- Petron Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Larsen & Toubro Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Riau Bara Harum - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Attock Cement Pakistan Limited
- Goldman Sachs - Singapore
- Indian Energy Exchange, India
- Aboitiz Power Corporation - Philippines
- Ministry of Mines - Canada
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Semirara Mining Corp, Philippines
- The Treasury - Australian Government
- CNBM International Corporation - China
- Anglo American - United Kingdom
- IEA Clean Coal Centre - UK
- Commonwealth Bank - Australia
- Cement Manufacturers Association - India
- Georgia Ports Authority, United States
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- Xindia Steels Limited - India
- Mercator Lines Limited - India
- Bukit Baiduri Energy - Indonesia
- Ambuja Cements Ltd - India
- Energy Development Corp, Philippines
- Siam City Cement - Thailand
- Planning Commission, India
- Madhucon Powers Ltd - India
- Vizag Seaport Private Limited - India
- Karaikal Port Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Bhoruka Overseas - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Lanco Infratech Ltd - India
- Agrawal Coal Company - India
- Rio Tinto Coal - Australia
- Aditya Birla Group - India
- Eastern Energy - Thailand
- Edison Trading Spa - Italy
- Indogreen Group - Indonesia
- International Coal Ventures Pvt Ltd - India
- GMR Energy Limited - India
- Intertek Mineral Services - Indonesia
- Metalloyd Limited - United Kingdom
- Global Coal Blending Company Limited - Australia
- Alfred C Toepfer International GmbH - Germany
- Central Electricity Authority - India
- SMC Global Power, Philippines
- Marubeni Corporation - India
- McConnell Dowell - Australia
- OPG Power Generation Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Vijayanagar Sugar Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The University of Queensland
- Siam City Cement PLC, Thailand
- Orica Australia Pty. Ltd.
- Maharashtra Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- Altura Mining Limited, Indonesia
- Coal and Oil Company - UAE
- Global Business Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- Tata Chemicals Ltd - India
- Videocon Industries ltd - India
- Renaissance Capital - South Africa
- Heidelberg Cement - Germany
- Vedanta Resources Plc - India
- Mintek Dendrill Indonesia
- Gujarat Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- TeaM Sual Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Dalmia Cement Bharat India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kartika Selabumi Mining - Indonesia
- Savvy Resources Ltd - HongKong
- Ceylon Electricity Board - Sri Lanka
- Kideco Jaya Agung - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bangladesh Power Developement Board
- Sakthi Sugars Limited - India
- Interocean Group of Companies - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ASAPP Information Group - India
- Jorong Barutama Greston.PT - Indonesia
- GVK Power & Infra Limited - India
- Salva Resources Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Minerals Council of Australia
- Formosa Plastics Group - Taiwan
- Bhushan Steel Limited - India
- Electricity Generating Authority of Thailand
- Gujarat Mineral Development Corp Ltd - India
- Star Paper Mills Limited - India
- Parliament of New Zealand
- Global Green Power PLC Corporation, Philippines
- Trasteel International SA, Italy
- European Bulk Services B.V. - Netherlands
- Barasentosa Lestari - Indonesia
- Singapore Mercantile Exchange
- Simpson Spence & Young - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- LBH Netherlands Bv - Netherlands
- Sarangani Energy Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Thiess Contractors Indonesia
- San Jose City I Power Corp, Philippines
- Chamber of Mines of South Africa
- Port Waratah Coal Services - Australia
- Kaltim Prima Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Sical Logistics Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Coalindo Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- India Bulls Power Limited - India
- Wilmar Investment Holdings
- Bahari Cakrawala Sebuku - Indonesia
- Meenaskhi Energy Private Limited - India
- MS Steel International - UAE
- Medco Energi Mining Internasional
- VISA Power Limited - India
- Romanian Commodities Exchange
- Orica Mining Services - Indonesia
- Deloitte Consulting - India
- Bulk Trading Sa - Switzerland
- Bharathi Cement Corporation - India
- Ind-Barath Power Infra Limited - India
- Gujarat Sidhee Cement - India
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- Holcim Trading Pte Ltd - Singapore
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- Economic Council, Georgia
- Sojitz Corporation - Japan
- Borneo Indobara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Mjunction Services Limited - India
- Posco Energy - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Wood Mackenzie - Singapore
- Makarim & Taira - Indonesia
- Bayan Resources Tbk. - Indonesia
- Indika Energy - Indonesia
- White Energy Company Limited
- The State Trading Corporation of India Ltd
- Baramulti Group, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Jaiprakash Power Ventures ltd
- Ministry of Finance - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- Central Java Power - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Kumho Petrochemical, South Korea
- Straits Asia Resources Limited - Singapore
- Tamil Nadu electricity Board
- Coastal Gujarat Power Limited - India
- Sree Jayajothi Cements Limited - India
- London Commodity Brokers - England
- Merrill Lynch Commodities Europe
- Bhatia International Limited - India
- Uttam Galva Steels Limited - India
- Therma Luzon, Inc, Philippines
- Australian Coal Association
- Mercuria Energy - Indonesia
- SMG Consultants - Indonesia
- Carbofer General Trading SA - India
- Chettinad Cement Corporation Ltd - India
- Ministry of Transport, Egypt
- Indo Tambangraya Megah - Indonesia
- Power Finance Corporation Ltd., India
- Binh Thuan Hamico - Vietnam
- Toyota Tsusho Corporation, Japan
- Pendopo Energi Batubara - Indonesia
- Independent Power Producers Association of India
- Kobexindo Tractors - Indoneisa
- IHS Mccloskey Coal Group - USA
- Standard Chartered Bank - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Meralco Power Generation, Philippines
- Grasim Industreis Ltd - India
- Indian Oil Corporation Limited
- Eastern Coal Council - USA
- Thai Mozambique Logistica
- Iligan Light & Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- Latin American Coal - Colombia
- Africa Commodities Group - South Africa
- Australian Commodity Traders Exchange
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
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