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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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Friday, 21 August 20
BHP COMMITS TO SELLING ITS THERMAL COALMINES WITHIN TWO YEARS - THE GUARDIAN
Move follows pressure from investors but company stops short of full exit from coalmining
BHP has announced it plans to sell off its ...
Thursday, 20 August 20
MINER BHP CONFIRMS PLANS TO EXIT THERMAL COAL SECTOR - THE SYDNEY MORNING HERALD
The head of mining giant BHP has laid out plans for a reshaping of its global operations by seeking to quit thermal coal mining, offload some cokin ...
Thursday, 20 August 20
LONDON RETAINS ARBITER CROWN - BALTIC EXCHANGE | HFW
Fears that the UK’s decision to leave the European Union would dent the reputation of the nation’s capital as the leader in maritime ar ...
Wednesday, 19 August 20
U.S. COAL STOCKPILES STEADILY INCREASE AFTER REACHING LOWEST LEVEL IN A DECADE IN 2019 - EIA
After reaching their lowest level in more than a decade in March 2019, U.S. coal stockpiles steadily increased to 152 million tons in April 2020, r ...
Wednesday, 19 August 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.26 PCT - XINHUA
China Taiyuan coal transaction price index stood at 124.92 points Monday, down 0.26 percent week on week.
The index, released by Chi ...
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- Binh Thuan Hamico - Vietnam
- Australian Coal Association
- MS Steel International - UAE
- CNBM International Corporation - China
- PTC India Limited - India
- Bayan Resources Tbk. - Indonesia
- The State Trading Corporation of India Ltd
- Semirara Mining Corp, Philippines
- Orica Australia Pty. Ltd.
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Coal Council - USA
- Aditya Birla Group - India
- Bhatia International Limited - India
- ICICI Bank Limited - India
- Makarim & Taira - Indonesia
- Riau Bara Harum - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Vedanta Resources Plc - India
- Ambuja Cements Ltd - India
- McConnell Dowell - Australia
- Simpson Spence & Young - Indonesia
- Africa Commodities Group - South Africa
- Mercuria Energy - Indonesia
- Sakthi Sugars Limited - India
- Sinarmas Energy and Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Indonesian Coal Mining Association
- Kepco SPC Power Corporation, Philippines
- Carbofer General Trading SA - India
- Maharashtra Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Energy Development Corp, Philippines
- Economic Council, Georgia
- Standard Chartered Bank - UAE
- The University of Queensland
- GMR Energy Limited - India
- Coal and Oil Company - UAE
- Essar Steel Hazira Ltd - India
- Deloitte Consulting - India
- Commonwealth Bank - Australia
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- Meralco Power Generation, Philippines
- The Treasury - Australian Government
- Coalindo Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Merrill Lynch Commodities Europe
- Holcim Trading Pte Ltd - Singapore
- LBH Netherlands Bv - Netherlands
- Indian Oil Corporation Limited
- Attock Cement Pakistan Limited
- Posco Energy - South Korea
- New Zealand Coal & Carbon
- Bukit Baiduri Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sojitz Corporation - Japan
- Sical Logistics Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Medco Energi Mining Internasional
- SMC Global Power, Philippines
- Grasim Industreis Ltd - India
- Central Java Power - Indonesia
- Rio Tinto Coal - Australia
- Agrawal Coal Company - India
- Trasteel International SA, Italy
- London Commodity Brokers - England
- Cigading International Bulk Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- India Bulls Power Limited - India
- Parliament of New Zealand
- Coastal Gujarat Power Limited - India
- Malabar Cements Ltd - India
- Thiess Contractors Indonesia
- Minerals Council of Australia
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Mines - Canada
- South Luzon Thermal Energy Corporation
- Maheswari Brothers Coal Limited - India
- Sarangani Energy Corporation, Philippines
- Central Electricity Authority - India
- International Coal Ventures Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Electricity Authority, New Zealand
- Metalloyd Limited - United Kingdom
- Savvy Resources Ltd - HongKong
- Straits Asia Resources Limited - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Planning Commission, India
- Jaiprakash Power Ventures ltd
- Banpu Public Company Limited - Thailand
- Eastern Energy - Thailand
- Formosa Plastics Group - Taiwan
- Karbindo Abesyapradhi - Indoneisa
- Chamber of Mines of South Africa
- Intertek Mineral Services - Indonesia
- Lanco Infratech Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Generating Authority of Thailand
- Global Business Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Timah Investasi Mineral - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Marubeni Corporation - India
- Altura Mining Limited, Indonesia
- Tamil Nadu electricity Board
- Bhoruka Overseas - Indonesia
- Bhushan Steel Limited - India
- Antam Resourcindo - Indonesia
- Jindal Steel & Power Ltd - India
- Dalmia Cement Bharat India
- Sindya Power Generating Company Private Ltd
- Wilmar Investment Holdings
- Gujarat Sidhee Cement - India
- Siam City Cement PLC, Thailand
- Samtan Co., Ltd - South Korea
- Uttam Galva Steels Limited - India
- Indogreen Group - Indonesia
- Therma Luzon, Inc, Philippines
- Madhucon Powers Ltd - India
- Toyota Tsusho Corporation, Japan
- Vizag Seaport Private Limited - India
- Goldman Sachs - Singapore
- Mintek Dendrill Indonesia
- Ministry of Transport, Egypt
- Pipit Mutiara Jaya. PT, Indonesia
- Videocon Industries ltd - India
- European Bulk Services B.V. - Netherlands
- Ceylon Electricity Board - Sri Lanka
- TeaM Sual Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kobexindo Tractors - Indoneisa
- Kideco Jaya Agung - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Barasentosa Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- Independent Power Producers Association of India
- Kohat Cement Company Ltd. - Pakistan
- Indika Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- SMG Consultants - Indonesia
- Renaissance Capital - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Finance - Indonesia
- Manunggal Multi Energi - Indonesia
- Siam City Cement - Thailand
- Global Green Power PLC Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Anglo American - United Kingdom
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- Pendopo Energi Batubara - Indonesia
- Directorate Of Revenue Intelligence - India
- Indo Tambangraya Megah - Indonesia
- Tata Chemicals Ltd - India
- Energy Link Ltd, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- AsiaOL BioFuels Corp., Philippines
- Thai Mozambique Logistica
- Rashtriya Ispat Nigam Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- CIMB Investment Bank - Malaysia
- IEA Clean Coal Centre - UK
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
- Petron Corporation, Philippines
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- Singapore Mercantile Exchange
- Cement Manufacturers Association - India
- IHS Mccloskey Coal Group - USA
- VISA Power Limited - India
- Iligan Light & Power Inc, Philippines
- Australian Commodity Traders Exchange
- ASAPP Information Group - India
- San Jose City I Power Corp, Philippines
- Georgia Ports Authority, United States
- Latin American Coal - Colombia
- Oldendorff Carriers - Singapore
- Parry Sugars Refinery, India
- Semirara Mining and Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Xindia Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Billiton Holdings Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Edison Trading Spa - Italy
- Mjunction Services Limited - India
- Bharathi Cement Corporation - India
- Bangladesh Power Developement Board
- Borneo Indobara - Indonesia
- PowerSource Philippines DevCo
- PNOC Exploration Corporation - Philippines
- Star Paper Mills Limited - India
- Bulk Trading Sa - Switzerland
- Port Waratah Coal Services - Australia
- White Energy Company Limited
- Price Waterhouse Coopers - Russia
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