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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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Monday, 04 January 21
U.S. RENEWABLE ENERGY CONSUMPTION SURPASSES COAL FOR THE FIRST TIME IN OVER 130 YEARS - EIA
In 2019, U.S. annual energy consumption from renewable sources exceeded coal consumption for the first time since before 1885, according to the U.S ...
Monday, 04 January 21
BLISS FOR SHIPOWNERS! DAMAGES MAY BE CLAIMED IN ADDITION TO DEMURRAGE FOR VOYAGE CHARTERPARTY DELAY - WFW
KNOWLEDGE TO ELEVATE
In a significant decision for the maritime sector, The Eternal Bliss[1], the English Commercial Court has resol ...
Sunday, 03 January 21
INDIA: COMMERCE MINISTRY LAUNCHES COAL IMPORT MONITORING SYSTEM - PTI
CIMS shall require importers to submit advance information in an online system for imports of items and obtain an automatic registration number by ...
Wednesday, 30 December 20
A LOOK BACK INTO 2020: THE HEADWINDS, THE TAILWINDS AND EVERYTHING IN BETWEEN - SIGNAL
There is no doubt that 2020 has been a turbulent year for commercial shipping. The coronavirus pandemic has shaken the global maritime transport. T ...
Tuesday, 29 December 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.66 PCT - XINHUA
China Taiyuan coal transaction price index stood at 134.78 points Monday, up 0.66 percent week on week.
The index, released by China ...
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- CIMB Investment Bank - Malaysia
- VISA Power Limited - India
- European Bulk Services B.V. - Netherlands
- Orica Australia Pty. Ltd.
- Planning Commission, India
- Standard Chartered Bank - UAE
- Pendopo Energi Batubara - Indonesia
- London Commodity Brokers - England
- Eastern Coal Council - USA
- IEA Clean Coal Centre - UK
- Globalindo Alam Lestari - Indonesia
- Energy Development Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Africa Commodities Group - South Africa
- Australian Commodity Traders Exchange
- Wood Mackenzie - Singapore
- GAC Shipping (India) Pvt Ltd
- Directorate General of MIneral and Coal - Indonesia
- Lanco Infratech Ltd - India
- Star Paper Mills Limited - India
- Alfred C Toepfer International GmbH - Germany
- Georgia Ports Authority, United States
- Indo Tambangraya Megah - Indonesia
- Siam City Cement PLC, Thailand
- Wilmar Investment Holdings
- Bhoruka Overseas - Indonesia
- ICICI Bank Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Sakthi Sugars Limited - India
- Maharashtra Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- PowerSource Philippines DevCo
- Posco Energy - South Korea
- Barasentosa Lestari - Indonesia
- Cement Manufacturers Association - India
- The State Trading Corporation of India Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Baramulti Group, Indonesia
- Economic Council, Georgia
- Binh Thuan Hamico - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Merrill Lynch Commodities Europe
- Kapuas Tunggal Persada - Indonesia
- McConnell Dowell - Australia
- Jindal Steel & Power Ltd - India
- Meralco Power Generation, Philippines
- Metalloyd Limited - United Kingdom
- Heidelberg Cement - Germany
- Sarangani Energy Corporation, Philippines
- Australian Coal Association
- Bukit Asam (Persero) Tbk - Indonesia
- Tamil Nadu electricity Board
- Malabar Cements Ltd - India
- Bhushan Steel Limited - India
- Bangladesh Power Developement Board
- Cigading International Bulk Terminal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Thai Mozambique Logistica
- Interocean Group of Companies - India
- Bayan Resources Tbk. - Indonesia
- The Treasury - Australian Government
- Electricity Authority, New Zealand
- Sojitz Corporation - Japan
- PNOC Exploration Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Neyveli Lignite Corporation Ltd, - India
- Holcim Trading Pte Ltd - Singapore
- Price Waterhouse Coopers - Russia
- IHS Mccloskey Coal Group - USA
- Kepco SPC Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Generating Authority of Thailand
- Rio Tinto Coal - Australia
- Singapore Mercantile Exchange
- Gujarat Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Indian Energy Exchange, India
- Meenaskhi Energy Private Limited - India
- Thiess Contractors Indonesia
- Edison Trading Spa - Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Uttam Galva Steels Limited - India
- PTC India Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Larsen & Toubro Limited - India
- Straits Asia Resources Limited - Singapore
- Trasteel International SA, Italy
- Carbofer General Trading SA - India
- PetroVietnam Power Coal Import and Supply Company
- Directorate Of Revenue Intelligence - India
- Maheswari Brothers Coal Limited - India
- Energy Link Ltd, New Zealand
- Rashtriya Ispat Nigam Limited - India
- New Zealand Coal & Carbon
- South Luzon Thermal Energy Corporation
- Borneo Indobara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Mjunction Services Limited - India
- Altura Mining Limited, Indonesia
- Port Waratah Coal Services - Australia
- Indika Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- Chettinad Cement Corporation Ltd - India
- Eastern Energy - Thailand
- Iligan Light & Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Coalindo Energy - Indonesia
- Central Java Power - Indonesia
- Central Electricity Authority - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sical Logistics Limited - India
- Manunggal Multi Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Timah Investasi Mineral - Indoneisa
- SMG Consultants - Indonesia
- Minerals Council of Australia
- Agrawal Coal Company - India
- Independent Power Producers Association of India
- Dalmia Cement Bharat India
- Bukit Makmur.PT - Indonesia
- Commonwealth Bank - Australia
- Petron Corporation, Philippines
- Oldendorff Carriers - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Parry Sugars Refinery, India
- Bulk Trading Sa - Switzerland
- Vedanta Resources Plc - India
- Semirara Mining and Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Sindya Power Generating Company Private Ltd
- Bharathi Cement Corporation - India
- Jaiprakash Power Ventures ltd
- Siam City Cement - Thailand
- Ambuja Cements Ltd - India
- ASAPP Information Group - India
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- Salva Resources Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- SN Aboitiz Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- Parliament of New Zealand
- Global Business Power Corporation, Philippines
- Anglo American - United Kingdom
- Kumho Petrochemical, South Korea
- Karbindo Abesyapradhi - Indoneisa
- Kaltim Prima Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Ceylon Electricity Board - Sri Lanka
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
- Samtan Co., Ltd - South Korea
- Attock Cement Pakistan Limited
- AsiaOL BioFuels Corp., Philippines
- Latin American Coal - Colombia
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
- Videocon Industries ltd - India
- Vizag Seaport Private Limited - India
- Essar Steel Hazira Ltd - India
- Mercator Lines Limited - India
- SMC Global Power, Philippines
- GN Power Mariveles Coal Plant, Philippines
- MS Steel International - UAE
- Chamber of Mines of South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhatia International Limited - India
- Ind-Barath Power Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Sree Jayajothi Cements Limited - India
- Renaissance Capital - South Africa
- Deloitte Consulting - India
- Coastal Gujarat Power Limited - India
- White Energy Company Limited
- Karaikal Port Pvt Ltd - India
- Grasim Industreis Ltd - India
- Bukit Baiduri Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Mercuria Energy - Indonesia
- Goldman Sachs - Singapore
- Marubeni Corporation - India
- Indian Oil Corporation Limited
- Madhucon Powers Ltd - India
- Orica Mining Services - Indonesia
- Makarim & Taira - Indonesia
- Coal and Oil Company - UAE
- Ministry of Transport, Egypt
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Indonesian Coal Mining Association
- Aditya Birla Group - India
- The University of Queensland
- GMR Energy Limited - India
- Kartika Selabumi Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Mintek Dendrill Indonesia
- India Bulls Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Romanian Commodities Exchange
- Medco Energi Mining Internasional
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