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