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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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Tuesday, 29 December 20
CORROSION-RESISTANT STEELS FOR CARGO OIL TANKS - DNV GL
KNOWLEDGE TO ELEVATE
Crude oil is a complex mixture of substances at varying ratios and in most cases contains at least some salt water. ...
Tuesday, 29 December 20
CHINA COKING COAL FUTURES RISE FOR THIRD DAY ON SUPPLY WORRIES - REUTERS
Chinese coking coal futures extended gains into a third session on Monday, jumping as much as 6.2% as lower imports, sliding inventories and mines ...
Wednesday, 23 December 20
COKING COAL'S DECLINE LIKELY TO FOLLOW THE PATH OF THERMAL COAL’S PROGRESSIVE DEMISE - IEEFA
Technology disruption the likely theme of global energy markets in 2021
There has been a growing tsunami of climate commitment annou ...
Wednesday, 23 December 20
MARKET INSIGHT - INTERMODAL
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Tuesday, 22 December 20
2021 DRY BULK OUTLOOK - SUPPLY GROWTH - TORVALD KLAVENESS
In the first article in the series we mentioned that dry bulk freight was in a super cycle between 2001 and 2008. The growth in global yard capacit ...
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- Pipit Mutiara Jaya. PT, Indonesia
- Lanco Infratech Ltd - India
- Eastern Energy - Thailand
- Riau Bara Harum - Indonesia
- Antam Resourcindo - Indonesia
- Formosa Plastics Group - Taiwan
- Metalloyd Limited - United Kingdom
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- Bhushan Steel Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Coal Blending Company Limited - Australia
- OPG Power Generation Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Aditya Birla Group - India
- Renaissance Capital - South Africa
- Jindal Steel & Power Ltd - India
- Indian Oil Corporation Limited
- Rashtriya Ispat Nigam Limited - India
- Cigading International Bulk Terminal - Indonesia
- Indika Energy - Indonesia
- Sical Logistics Limited - India
- Bukit Makmur.PT - Indonesia
- Carbofer General Trading SA - India
- Gujarat Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Trasteel International SA, Italy
- Madhucon Powers Ltd - India
- Manunggal Multi Energi - Indonesia
- Edison Trading Spa - Italy
- Kalimantan Lumbung Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Mjunction Services Limited - India
- Ambuja Cements Ltd - India
- Medco Energi Mining Internasional
- Globalindo Alam Lestari - Indonesia
- Planning Commission, India
- Merrill Lynch Commodities Europe
- Krishnapatnam Port Company Ltd. - India
- GN Power Mariveles Coal Plant, Philippines
- New Zealand Coal & Carbon
- Vizag Seaport Private Limited - India
- Coastal Gujarat Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Orica Mining Services - Indonesia
- Oldendorff Carriers - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Iligan Light & Power Inc, Philippines
- Videocon Industries ltd - India
- Kartika Selabumi Mining - Indonesia
- Baramulti Group, Indonesia
- Thiess Contractors Indonesia
- Agrawal Coal Company - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- McConnell Dowell - Australia
- PTC India Limited - India
- Sarangani Energy Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- South Luzon Thermal Energy Corporation
- Kumho Petrochemical, South Korea
- Cement Manufacturers Association - India
- Sinarmas Energy and Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Eastern Coal Council - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Salva Resources Pvt Ltd - India
- Interocean Group of Companies - India
- White Energy Company Limited
- Simpson Spence & Young - Indonesia
- Tata Chemicals Ltd - India
- Port Waratah Coal Services - Australia
- Siam City Cement - Thailand
- Standard Chartered Bank - UAE
- Sojitz Corporation - Japan
- Asmin Koalindo Tuhup - Indonesia
- Meralco Power Generation, Philippines
- ICICI Bank Limited - India
- Mercator Lines Limited - India
- Minerals Council of Australia
- Bharathi Cement Corporation - India
- Tamil Nadu electricity Board
- Makarim & Taira - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Finance - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Electricity Authority, New Zealand
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- London Commodity Brokers - England
- Barasentosa Lestari - Indonesia
- Grasim Industreis Ltd - India
- Essar Steel Hazira Ltd - India
- IEA Clean Coal Centre - UK
- Directorate Of Revenue Intelligence - India
- Indonesian Coal Mining Association
- Toyota Tsusho Corporation, Japan
- Karbindo Abesyapradhi - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Gujarat Sidhee Cement - India
- Central Electricity Authority - India
- Latin American Coal - Colombia
- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
- Bukit Baiduri Energy - Indonesia
- Energy Link Ltd, New Zealand
- Marubeni Corporation - India
- Kobexindo Tractors - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sakthi Sugars Limited - India
- Therma Luzon, Inc, Philippines
- Georgia Ports Authority, United States
- LBH Netherlands Bv - Netherlands
- Siam City Cement PLC, Thailand
- Independent Power Producers Association of India
- Romanian Commodities Exchange
- Bayan Resources Tbk. - Indonesia
- The University of Queensland
- Petrochimia International Co. Ltd.- Taiwan
- Deloitte Consulting - India
- Malabar Cements Ltd - India
- Orica Australia Pty. Ltd.
- Chamber of Mines of South Africa
- San Jose City I Power Corp, Philippines
- Wood Mackenzie - Singapore
- ASAPP Information Group - India
- Savvy Resources Ltd - HongKong
- Vijayanagar Sugar Pvt Ltd - India
- Heidelberg Cement - Germany
- Xindia Steels Limited - India
- Africa Commodities Group - South Africa
- Anglo American - United Kingdom
- Sree Jayajothi Cements Limited - India
- India Bulls Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Star Paper Mills Limited - India
- SN Aboitiz Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Larsen & Toubro Limited - India
- MS Steel International - UAE
- Meenaskhi Energy Private Limited - India
- Energy Development Corp, Philippines
- Indian Energy Exchange, India
- Borneo Indobara - Indonesia
- European Bulk Services B.V. - Netherlands
- Goldman Sachs - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Dalmia Cement Bharat India
- Coal and Oil Company - UAE
- The State Trading Corporation of India Ltd
- Chettinad Cement Corporation Ltd - India
- VISA Power Limited - India
- Vedanta Resources Plc - India
- GMR Energy Limited - India
- Altura Mining Limited, Indonesia
- Global Business Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Economic Council, Georgia
- Posco Energy - South Korea
- Maheswari Brothers Coal Limited - India
- Binh Thuan Hamico - Vietnam
- SMC Global Power, Philippines
- Aboitiz Power Corporation - Philippines
- Australian Commodity Traders Exchange
- Karaikal Port Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Indogreen Group - Indonesia
- Semirara Mining and Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Central Java Power - Indonesia
- Mintek Dendrill Indonesia
- Parliament of New Zealand
- Ceylon Electricity Board - Sri Lanka
- Holcim Trading Pte Ltd - Singapore
- Singapore Mercantile Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- Commonwealth Bank - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Rio Tinto Coal - Australia
- Uttam Galva Steels Limited - India
- Power Finance Corporation Ltd., India
- Bangladesh Power Developement Board
- Global Green Power PLC Corporation, Philippines
- CNBM International Corporation - China
- IHS Mccloskey Coal Group - USA
- Australian Coal Association
- Timah Investasi Mineral - Indoneisa
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- Kideco Jaya Agung - Indonesia
- PNOC Exploration Corporation - Philippines
- Parry Sugars Refinery, India
- Attock Cement Pakistan Limited
- Wilmar Investment Holdings
- Jaiprakash Power Ventures ltd
- The Treasury - Australian Government
- Ministry of Mines - Canada
- Bhatia International Limited - India
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