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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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Wednesday, 26 May 21
NEW POWER AND ENERGY MASTER PLAN MUST BE DESIGNED IN BANGLADESH'S BEST INTERESTS, NOT JAPAN'S - IEEFA
JICA must deliver a low or zero emissions plan as promised, not fund Matarbari 2 coal plant
Clear understandings from the Bangladesh ...
Tuesday, 25 May 21
KOREA SOUTHERN POWER INVITED BIDS FOR 870,000 MT OF MIN 5300 NCV COAL FOR 2021 TO 2023.
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for total 870,000 MT of Min 5,300 kcal/kg NCV coal for Augu ...
Tuesday, 25 May 21
CHINA’S COAL OUTPUT RISES IN FIRST FOUR MONTHS - XINHUA
China’s raw coal output rose 11.1 percent year on year to 1.29 billion tonnes in the first four months of 2021, official data showed.
&nb ...
Tuesday, 25 May 21
MARINE SHIPPERS BULK UP: ANOTHER GAME OF CHICKEN IN THE WORKS? - THE KOREA TIMES
Global shipping companies have been placing orders for large ships, with many anticipating further increased competition within the next three year ...
Friday, 21 May 21
MARKET INSIGHT - INTERMODAL
The dry bulk market’s counter seasonal surge so far into the first half of the year -in a sort of 2010 manner - and Capesize’s recent r ...
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- Formosa Plastics Group - Taiwan
- PowerSource Philippines DevCo
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement PLC, Thailand
- Standard Chartered Bank - UAE
- The Treasury - Australian Government
- Ministry of Transport, Egypt
- Tata Chemicals Ltd - India
- IEA Clean Coal Centre - UK
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kepco SPC Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Power Finance Corporation Ltd., India
- Australian Commodity Traders Exchange
- Gujarat Sidhee Cement - India
- Planning Commission, India
- European Bulk Services B.V. - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- The University of Queensland
- Global Coal Blending Company Limited - Australia
- Grasim Industreis Ltd - India
- Sojitz Corporation - Japan
- Vijayanagar Sugar Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- New Zealand Coal & Carbon
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- PNOC Exploration Corporation - Philippines
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- Romanian Commodities Exchange
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- Makarim & Taira - Indonesia
- Bharathi Cement Corporation - India
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Deloitte Consulting - India
- Price Waterhouse Coopers - Russia
- Bhushan Steel Limited - India
- Riau Bara Harum - Indonesia
- Videocon Industries ltd - India
- Vedanta Resources Plc - India
- Indian Energy Exchange, India
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
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- Kobexindo Tractors - Indoneisa
- IHS Mccloskey Coal Group - USA
- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Aboitiz Power Corporation - Philippines
- Posco Energy - South Korea
- Georgia Ports Authority, United States
- Straits Asia Resources Limited - Singapore
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Eastern Energy - Thailand
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- Parry Sugars Refinery, India
- Aditya Birla Group - India
- Coal and Oil Company - UAE
- Mercator Lines Limited - India
- Marubeni Corporation - India
- MS Steel International - UAE
- Tamil Nadu electricity Board
- Rashtriya Ispat Nigam Limited - India
- Heidelberg Cement - Germany
- Barasentosa Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
- India Bulls Power Limited - India
- Ministry of Finance - Indonesia
- GVK Power & Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- San Jose City I Power Corp, Philippines
- Energy Link Ltd, New Zealand
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- LBH Netherlands Bv - Netherlands
- Indogreen Group - Indonesia
- VISA Power Limited - India
- Australian Coal Association
- Electricity Generating Authority of Thailand
- Vizag Seaport Private Limited - India
- Jaiprakash Power Ventures ltd
- Indonesian Coal Mining Association
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Dalmia Cement Bharat India
- Kideco Jaya Agung - Indonesia
- Salva Resources Pvt Ltd - India
- Energy Development Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Karaikal Port Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- Sarangani Energy Corporation, Philippines
- Eastern Coal Council - USA
- Meralco Power Generation, Philippines
- Global Business Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- OPG Power Generation Pvt Ltd - India
- Mjunction Services Limited - India
- Petron Corporation, Philippines
- Larsen & Toubro Limited - India
- Sinarmas Energy and Mining - Indonesia
- Singapore Mercantile Exchange
- Mintek Dendrill Indonesia
- Bulk Trading Sa - Switzerland
- Bank of Tokyo Mitsubishi UFJ Ltd
- London Commodity Brokers - England
- Karbindo Abesyapradhi - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Thai Mozambique Logistica
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- Globalindo Alam Lestari - Indonesia
- White Energy Company Limited
- Anglo American - United Kingdom
- Bukit Makmur.PT - Indonesia
- Chamber of Mines of South Africa
- Attock Cement Pakistan Limited
- Sindya Power Generating Company Private Ltd
- Bukit Baiduri Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- GMR Energy Limited - India
- Port Waratah Coal Services - Australia
- International Coal Ventures Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Indo Tambangraya Megah - Indonesia
- Parliament of New Zealand
- Bayan Resources Tbk. - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bhoruka Overseas - Indonesia
- Mercuria Energy - Indonesia
- Minerals Council of Australia
- Carbofer General Trading SA - India
- Essar Steel Hazira Ltd - India
- Central Electricity Authority - India
- Ceylon Electricity Board - Sri Lanka
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Merrill Lynch Commodities Europe
- GAC Shipping (India) Pvt Ltd
- Altura Mining Limited, Indonesia
- SN Aboitiz Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Orica Australia Pty. Ltd.
- Ind-Barath Power Infra Limited - India
- Cement Manufacturers Association - India
- Malabar Cements Ltd - India
- Indian Oil Corporation Limited
- Renaissance Capital - South Africa
- Africa Commodities Group - South Africa
- McConnell Dowell - Australia
- PTC India Limited - India
- Latin American Coal - Colombia
- Bhatia International Limited - India
- PetroVietnam Power Coal Import and Supply Company
- GN Power Mariveles Coal Plant, Philippines
- Coastal Gujarat Power Limited - India
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- Global Green Power PLC Corporation, Philippines
- Interocean Group of Companies - India
- Timah Investasi Mineral - Indoneisa
- Therma Luzon, Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Orica Mining Services - Indonesia
- Intertek Mineral Services - Indonesia
- Madhucon Powers Ltd - India
- Siam City Cement - Thailand
- Chettinad Cement Corporation Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Kalimantan Lumbung Energi - Indonesia
- Sakthi Sugars Limited - India
- The State Trading Corporation of India Ltd
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- Economic Council, Georgia
- Bangladesh Power Developement Board
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
- ICICI Bank Limited - India
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- Edison Trading Spa - Italy
- Medco Energi Mining Internasional
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- Goldman Sachs - Singapore
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