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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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Wednesday, 07 October 20
U.S. COAL PRODUCTION TO DECREASE BY 26 PERCENT IN 2020 COMPARED TO 2019 - EIA
EIA expects total U.S. coal production in 2020 to be 525 million short tons (MMst), compared with 705 MMst in 2019, a 26% decrease.
COVID-19 a ...
Wednesday, 07 October 20
MARKET INSIGHT - INTERMODAL
The challenges brought forward in 2020 proved to be very different from what we could have ever imagined. Together with placing a significant strai ...
Tuesday, 06 October 20
KOSPO TO IMPORT 80,000 MT OF 3,800 NCV COAL FOR 2H NOV
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 80,000 MT Min.3800 kcal/kg NCV coal 2H November, 2020 l ...
Friday, 02 October 20
THE INDONESIA COAL PRICE REFERENCE RISE AFTER HISTORIC CRASH TO US$ 49.42
COALspot.com: The Indonesia Coal Price Reference for the month of October Rise to US$ 51.00 after historic crash to US$ 49.42 in September 2020.
...
Friday, 02 October 20
SRI LANKA MUST LEARN LESSONS FROM AROUND ASIA TO AVOID FURTHER ELECTRICITY CRISES - IEEFA
Overcommitment to fossil-fuelled power generation is leading to excess capacity and rising capacity payments, subsidies, and tariffs around the con ...
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- Cement Manufacturers Association - India
- Meralco Power Generation, Philippines
- Merrill Lynch Commodities Europe
- Kobexindo Tractors - Indoneisa
- PowerSource Philippines DevCo
- CIMB Investment Bank - Malaysia
- Coal and Oil Company - UAE
- Kapuas Tunggal Persada - Indonesia
- Therma Luzon, Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Bukit Makmur.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Grasim Industreis Ltd - India
- Meenaskhi Energy Private Limited - India
- Marubeni Corporation - India
- Mercator Lines Limited - India
- SMG Consultants - Indonesia
- Orica Mining Services - Indonesia
- Australian Commodity Traders Exchange
- Altura Mining Limited, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- IHS Mccloskey Coal Group - USA
- Rio Tinto Coal - Australia
- Coastal Gujarat Power Limited - India
- Trasteel International SA, Italy
- GVK Power & Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Georgia Ports Authority, United States
- Toyota Tsusho Corporation, Japan
- Bahari Cakrawala Sebuku - Indonesia
- Coalindo Energy - Indonesia
- Latin American Coal - Colombia
- Singapore Mercantile Exchange
- Krishnapatnam Port Company Ltd. - India
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement PLC, Thailand
- SMC Global Power, Philippines
- Heidelberg Cement - Germany
- Power Finance Corporation Ltd., India
- Indian Energy Exchange, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhushan Steel Limited - India
- European Bulk Services B.V. - Netherlands
- Independent Power Producers Association of India
- Price Waterhouse Coopers - Russia
- Lanco Infratech Ltd - India
- Essar Steel Hazira Ltd - India
- Sojitz Corporation - Japan
- VISA Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Planning Commission, India
- Binh Thuan Hamico - Vietnam
- Formosa Plastics Group - Taiwan
- Indonesian Coal Mining Association
- Salva Resources Pvt Ltd - India
- Eastern Energy - Thailand
- New Zealand Coal & Carbon
- Orica Australia Pty. Ltd.
- Sakthi Sugars Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Billiton Holdings Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Anglo American - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Medco Energi Mining Internasional
- Bukit Baiduri Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Bharathi Cement Corporation - India
- Wood Mackenzie - Singapore
- Indian Oil Corporation Limited
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Asmin Koalindo Tuhup - Indonesia
- White Energy Company Limited
- GN Power Mariveles Coal Plant, Philippines
- Riau Bara Harum - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aboitiz Power Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Banpu Public Company Limited - Thailand
- Mintek Dendrill Indonesia
- Iligan Light & Power Inc, Philippines
- ICICI Bank Limited - India
- Kartika Selabumi Mining - Indonesia
- India Bulls Power Limited - India
- The Treasury - Australian Government
- Cigading International Bulk Terminal - Indonesia
- Petron Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Baramulti Group, Indonesia
- Edison Trading Spa - Italy
- Indogreen Group - Indonesia
- Attock Cement Pakistan Limited
- Agrawal Coal Company - India
- Parliament of New Zealand
- Australian Coal Association
- AsiaOL BioFuels Corp., Philippines
- Mercuria Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Globalindo Alam Lestari - Indonesia
- Bhatia International Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indika Energy - Indonesia
- Energy Link Ltd, New Zealand
- McConnell Dowell - Australia
- Vizag Seaport Private Limited - India
- MS Steel International - UAE
- Barasentosa Lestari - Indonesia
- Central Java Power - Indonesia
- Ministry of Mines - Canada
- Siam City Cement - Thailand
- Romanian Commodities Exchange
- Bangladesh Power Developement Board
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- The University of Queensland
- Star Paper Mills Limited - India
- Thai Mozambique Logistica
- Global Business Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Uttam Galva Steels Limited - India
- Kumho Petrochemical, South Korea
- CNBM International Corporation - China
- Global Green Power PLC Corporation, Philippines
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Carbofer General Trading SA - India
- Timah Investasi Mineral - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Posco Energy - South Korea
- Eastern Coal Council - USA
- TeaM Sual Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Ambuja Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Intertek Mineral Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Oldendorff Carriers - Singapore
- Goldman Sachs - Singapore
- Madhucon Powers Ltd - India
- Malabar Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- Dalmia Cement Bharat India
- Borneo Indobara - Indonesia
- Central Electricity Authority - India
- Vedanta Resources Plc - India
- Kideco Jaya Agung - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Mjunction Services Limited - India
- Simpson Spence & Young - Indonesia
- Sindya Power Generating Company Private Ltd
- Jorong Barutama Greston.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Interocean Group of Companies - India
- Ceylon Electricity Board - Sri Lanka
- GMR Energy Limited - India
- Savvy Resources Ltd - HongKong
- Commonwealth Bank - Australia
- Electricity Authority, New Zealand
- Kaltim Prima Coal - Indonesia
- Gujarat Sidhee Cement - India
- Leighton Contractors Pty Ltd - Australia
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
- Parry Sugars Refinery, India
- Karaikal Port Pvt Ltd - India
- Xindia Steels Limited - India
- San Jose City I Power Corp, Philippines
- Economic Council, Georgia
- Neyveli Lignite Corporation Ltd, - India
- Standard Chartered Bank - UAE
- Sical Logistics Limited - India
- Africa Commodities Group - South Africa
- Larsen & Toubro Limited - India
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- London Commodity Brokers - England
- Deloitte Consulting - India
- Sinarmas Energy and Mining - Indonesia
- IEA Clean Coal Centre - UK
- Tata Chemicals Ltd - India
- Makarim & Taira - Indonesia
- Renaissance Capital - South Africa
- Bulk Trading Sa - Switzerland
- Vijayanagar Sugar Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Wilmar Investment Holdings
- Ministry of Transport, Egypt
- Minerals Council of Australia
- Kohat Cement Company Ltd. - Pakistan
- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- PNOC Exploration Corporation - Philippines
- ASAPP Information Group - India
- Samtan Co., Ltd - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Directorate Of Revenue Intelligence - India
- Manunggal Multi Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Metalloyd Limited - United Kingdom
- Electricity Generating Authority of Thailand
- Kepco SPC Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PTC India Limited - India
- Port Waratah Coal Services - Australia
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