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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, 02 November 20
PHILIPPINES GOVERNMENT SAYS NO TO NEW COAL PLANT PROPOSALS - IEEFA | 24 PILIPINAS
The Duterte administration will no longer accept proposals to construct new coal power plants, a dramatic shift in energy policy that counts on dec ...
Sunday, 01 November 20
GRADUAL RECOVERY FOR INDONESIAN COAL FROM 4Q20; RISKS REMAIN - FITCH RATINGS
Fitch Ratings expects the credit metrics of Indonesian coal miners and coal contractors to improve from 4Q20 with the recovery in volumes and price ...
Wednesday, 28 October 20
BIODIESEL - NEW FUELS, NEW CHALLENGES - GARD | DNV GL
KNOWLEDGE TO ELEVATE
One of numerous possible ways to comply with the IMO’s strategy on the reduction of greenhouse gas (GHG) emissions ...
Wednesday, 28 October 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.35 PCT - XINHUA
China Taiyuan coal transaction price index stood at 127.94 points Monday, up 0.35 percent week on week.
The index, released by China ...
Wednesday, 28 October 20
MARKET INSIGHT - INTERMODAL
The global strive towards eco-friendliness and environmental sustainability in the shipping industry is mounting. There are currently almost 200 co ...
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- Kapuas Tunggal Persada - Indonesia
- Altura Mining Limited, Indonesia
- Kobexindo Tractors - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- GMR Energy Limited - India
- PTC India Limited - India
- Rashtriya Ispat Nigam Limited - India
- Eastern Coal Council - USA
- Wilmar Investment Holdings
- Madhucon Powers Ltd - India
- Tamil Nadu electricity Board
- Parry Sugars Refinery, India
- Barasentosa Lestari - Indonesia
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- Kepco SPC Power Corporation, Philippines
- Indian Oil Corporation Limited
- Miang Besar Coal Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ambuja Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Baramulti Group, Indonesia
- Karaikal Port Pvt Ltd - India
- Independent Power Producers Association of India
- Sakthi Sugars Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Sindya Power Generating Company Private Ltd
- Jindal Steel & Power Ltd - India
- Bukit Makmur.PT - Indonesia
- Minerals Council of Australia
- Lanco Infratech Ltd - India
- Sical Logistics Limited - India
- Australian Coal Association
- Krishnapatnam Port Company Ltd. - India
- The University of Queensland
- Coalindo Energy - Indonesia
- Marubeni Corporation - India
- Anglo American - United Kingdom
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Mercuria Energy - Indonesia
- ASAPP Information Group - India
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- Petron Corporation, Philippines
- SMG Consultants - Indonesia
- Attock Cement Pakistan Limited
- Asmin Koalindo Tuhup - Indonesia
- Medco Energi Mining Internasional
- Bhatia International Limited - India
- McConnell Dowell - Australia
- Carbofer General Trading SA - India
- Gujarat Mineral Development Corp Ltd - India
- Binh Thuan Hamico - Vietnam
- Xindia Steels Limited - India
- Commonwealth Bank - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Kaltim Prima Coal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Goldman Sachs - Singapore
- Siam City Cement - Thailand
- Globalindo Alam Lestari - Indonesia
- Indonesian Coal Mining Association
- New Zealand Coal & Carbon
- Sojitz Corporation - Japan
- Ind-Barath Power Infra Limited - India
- Ministry of Transport, Egypt
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- Bangladesh Power Developement Board
- Directorate Of Revenue Intelligence - India
- Straits Asia Resources Limited - Singapore
- Savvy Resources Ltd - HongKong
- Rio Tinto Coal - Australia
- Sree Jayajothi Cements Limited - India
- Singapore Mercantile Exchange
- Jorong Barutama Greston.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Dalmia Cement Bharat India
- Sinarmas Energy and Mining - Indonesia
- Mercator Lines Limited - India
- SMC Global Power, Philippines
- Gujarat Sidhee Cement - India
- Coastal Gujarat Power Limited - India
- Vedanta Resources Plc - India
- Videocon Industries ltd - India
- Planning Commission, India
- Malabar Cements Ltd - India
- Electricity Generating Authority of Thailand
- Africa Commodities Group - South Africa
- Gujarat Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- White Energy Company Limited
- Bharathi Cement Corporation - India
- Meenaskhi Energy Private Limited - India
- Cement Manufacturers Association - India
- Australian Commodity Traders Exchange
- Bukit Baiduri Energy - Indonesia
- Tata Chemicals Ltd - India
- Energy Development Corp, Philippines
- Economic Council, Georgia
- Pendopo Energi Batubara - Indonesia
- Thai Mozambique Logistica
- Trasteel International SA, Italy
- Intertek Mineral Services - Indonesia
- Iligan Light & Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Bhushan Steel Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- The Treasury - Australian Government
- Edison Trading Spa - Italy
- Metalloyd Limited - United Kingdom
- MS Steel International - UAE
- Coal and Oil Company - UAE
- Renaissance Capital - South Africa
- Leighton Contractors Pty Ltd - Australia
- Georgia Ports Authority, United States
- Sarangani Energy Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Jaiprakash Power Ventures ltd
- Global Coal Blending Company Limited - Australia
- Star Paper Mills Limited - India
- GAC Shipping (India) Pvt Ltd
- Grasim Industreis Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Romanian Commodities Exchange
- Antam Resourcindo - Indonesia
- Aditya Birla Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Authority, New Zealand
- Interocean Group of Companies - India
- IHS Mccloskey Coal Group - USA
- LBH Netherlands Bv - Netherlands
- Energy Link Ltd, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Essar Steel Hazira Ltd - India
- India Bulls Power Limited - India
- Central Electricity Authority - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kohat Cement Company Ltd. - Pakistan
- Deloitte Consulting - India
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
- Billiton Holdings Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- CNBM International Corporation - China
- Directorate General of MIneral and Coal - Indonesia
- Latin American Coal - Colombia
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement PLC, Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Parliament of New Zealand
- European Bulk Services B.V. - Netherlands
- Borneo Indobara - Indonesia
- Thiess Contractors Indonesia
- Kartika Selabumi Mining - Indonesia
- Chamber of Mines of South Africa
- Banpu Public Company Limited - Thailand
- Mjunction Services Limited - India
- Maheswari Brothers Coal Limited - India
- Toyota Tsusho Corporation, Japan
- Wood Mackenzie - Singapore
- Riau Bara Harum - Indonesia
- Indika Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- VISA Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Manunggal Multi Energi - Indonesia
- Central Java Power - Indonesia
- Bhoruka Overseas - Indonesia
- Samtan Co., Ltd - South Korea
- Salva Resources Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Formosa Plastics Group - Taiwan
- Meralco Power Generation, Philippines
- Ministry of Finance - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- London Commodity Brokers - England
- Mintek Dendrill Indonesia
- Global Green Power PLC Corporation, Philippines
- Indian Energy Exchange, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GVK Power & Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Power Finance Corporation Ltd., India
- Standard Chartered Bank - UAE
- Neyveli Lignite Corporation Ltd, - India
- Eastern Energy - Thailand
- Kideco Jaya Agung - Indonesia
- South Luzon Thermal Energy Corporation
- Simpson Spence & Young - Indonesia
- Vizag Seaport Private Limited - India
- OPG Power Generation Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Merrill Lynch Commodities Europe
- Posco Energy - South Korea
- Price Waterhouse Coopers - Russia
- Oldendorff Carriers - Singapore
- ICICI Bank Limited - India
- Makarim & Taira - Indonesia
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Indogreen Group - Indonesia
- TeaM Sual Corporation - Philippines
- Global Business Power Corporation, Philippines
- Ministry of Mines - Canada
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