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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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- MS Steel International - UAE
- Bhoruka Overseas - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Edison Trading Spa - Italy
- Chamber of Mines of South Africa
- Sarangani Energy Corporation, Philippines
- Sical Logistics Limited - India
- Makarim & Taira - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Essar Steel Hazira Ltd - India
- Sinarmas Energy and Mining - Indonesia
- TeaM Sual Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Vizag Seaport Private Limited - India
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- ASAPP Information Group - India
- Salva Resources Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Globalindo Alam Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Directorate General of MIneral and Coal - Indonesia
- Trasteel International SA, Italy
- Bangladesh Power Developement Board
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Makmur.PT - Indonesia
- Carbofer General Trading SA - India
- CNBM International Corporation - China
- Thiess Contractors Indonesia
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- SMG Consultants - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Orica Mining Services - Indonesia
- Australian Commodity Traders Exchange
- Kaltim Prima Coal - Indonesia
- Videocon Industries ltd - India
- Formosa Plastics Group - Taiwan
- Central Java Power - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Wood Mackenzie - Singapore
- Mercuria Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Antam Resourcindo - Indonesia
- Singapore Mercantile Exchange
- Indo Tambangraya Megah - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bharathi Cement Corporation - India
- Metalloyd Limited - United Kingdom
- Indika Energy - Indonesia
- PowerSource Philippines DevCo
- Indogreen Group - Indonesia
- Bayan Resources Tbk. - Indonesia
- IHS Mccloskey Coal Group - USA
- PTC India Limited - India
- Simpson Spence & Young - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Iligan Light & Power Inc, Philippines
- Coal and Oil Company - UAE
- Electricity Generating Authority of Thailand
- South Luzon Thermal Energy Corporation
- Renaissance Capital - South Africa
- GVK Power & Infra Limited - India
- Ministry of Mines - Canada
- Power Finance Corporation Ltd., India
- San Jose City I Power Corp, Philippines
- Dalmia Cement Bharat India
- Ministry of Finance - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Borneo Indobara - Indonesia
- Mintek Dendrill Indonesia
- Indian Energy Exchange, India
- Petrochimia International Co. Ltd.- Taiwan
- VISA Power Limited - India
- Deloitte Consulting - India
- ICICI Bank Limited - India
- Aditya Birla Group - India
- Karaikal Port Pvt Ltd - India
- Larsen & Toubro Limited - India
- Malabar Cements Ltd - India
- Commonwealth Bank - Australia
- Bukit Baiduri Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Parliament of New Zealand
- Uttam Galva Steels Limited - India
- Medco Energi Mining Internasional
- Minerals Council of Australia
- Australian Coal Association
- Kapuas Tunggal Persada - Indonesia
- Port Waratah Coal Services - Australia
- Romanian Commodities Exchange
- Semirara Mining Corp, Philippines
- GMR Energy Limited - India
- Leighton Contractors Pty Ltd - Australia
- Indian Oil Corporation Limited
- Star Paper Mills Limited - India
- Madhucon Powers Ltd - India
- Sakthi Sugars Limited - India
- Bulk Trading Sa - Switzerland
- Bhushan Steel Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Mercator Lines Limited - India
- Agrawal Coal Company - India
- Tata Chemicals Ltd - India
- The University of Queensland
- Interocean Group of Companies - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Coal Council - USA
- Standard Chartered Bank - UAE
- Price Waterhouse Coopers - Russia
- Toyota Tsusho Corporation, Japan
- Heidelberg Cement - Germany
- CIMB Investment Bank - Malaysia
- Sree Jayajothi Cements Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Economic Council, Georgia
- Gujarat Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Latin American Coal - Colombia
- Siam City Cement PLC, Thailand
- Merrill Lynch Commodities Europe
- GAC Shipping (India) Pvt Ltd
- Tamil Nadu electricity Board
- Cement Manufacturers Association - India
- SN Aboitiz Power Inc, Philippines
- Xindia Steels Limited - India
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Global Coal Blending Company Limited - Australia
- Baramulti Group, Indonesia
- Samtan Co., Ltd - South Korea
- Alfred C Toepfer International GmbH - Germany
- New Zealand Coal & Carbon
- Kepco SPC Power Corporation, Philippines
- Central Electricity Authority - India
- Directorate Of Revenue Intelligence - India
- Aboitiz Power Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Siam City Cement - Thailand
- Oldendorff Carriers - Singapore
- The Treasury - Australian Government
- Petron Corporation, Philippines
- The State Trading Corporation of India Ltd
- Marubeni Corporation - India
- Manunggal Multi Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- LBH Netherlands Bv - Netherlands
- Posco Energy - South Korea
- Africa Commodities Group - South Africa
- Eastern Energy - Thailand
- Coalindo Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Binh Thuan Hamico - Vietnam
- Grasim Industreis Ltd - India
- Rio Tinto Coal - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Australia Pty. Ltd.
- Bukit Asam (Persero) Tbk - Indonesia
- India Bulls Power Limited - India
- Coastal Gujarat Power Limited - India
- Anglo American - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- Kumho Petrochemical, South Korea
- AsiaOL BioFuels Corp., Philippines
- Global Business Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Mjunction Services Limited - India
- SMC Global Power, Philippines
- Planning Commission, India
- Cigading International Bulk Terminal - Indonesia
- McConnell Dowell - Australia
- Gujarat Mineral Development Corp Ltd - India
- Meralco Power Generation, Philippines
- Global Green Power PLC Corporation, Philippines
- Thai Mozambique Logistica
- Vedanta Resources Plc - India
- Chettinad Cement Corporation Ltd - India
- Indonesian Coal Mining Association
- Intertek Mineral Services - Indonesia
- Jindal Steel & Power Ltd - India
- Ministry of Transport, Egypt
- White Energy Company Limited
- Energy Development Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Attock Cement Pakistan Limited
- Pendopo Energi Batubara - Indonesia
- Riau Bara Harum - Indonesia
- Goldman Sachs - Singapore
- International Coal Ventures Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Jaiprakash Power Ventures ltd
- IEA Clean Coal Centre - UK
- Wilmar Investment Holdings
- Savvy Resources Ltd - HongKong
- Gujarat Sidhee Cement - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parry Sugars Refinery, India
- Maheswari Brothers Coal Limited - India
- London Commodity Brokers - England
- Electricity Authority, New Zealand
- Kideco Jaya Agung - Indonesia
- Lanco Infratech Ltd - India
- Sojitz Corporation - Japan
- Maharashtra Electricity Regulatory Commission - India
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