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