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