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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, 19 August 20
COAL INDIA TRADE UNIONS DEFER DAY-LONG STRIKE: PTI
The unions had decided to go on strike against the commercial mining and the proposed divestment or buyback of shares of Coal India Ltd (CIL).
...
Wednesday, 19 August 20
MISC MARKS ITS MAIDEN FORAY INTO MAJOR DEEP-WATER PROJECT IN LATIN AMERICA WITH MERO 3 FPSO
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INDIA SAW A SHARP DECLINE IN ENERGY COAL IMPORTS IN JANUARY - JUNE 2020; –27 PER CENT YOY - BHP
Energy coal prices were weak in the second half of financial year 2020, BHP says in its Economic and Commodity Outlook FY20.
Accordi ...
Wednesday, 19 August 20
COAL PRICES TO REMAIN SUBDUED THIS FISCAL AMID WEAK DEMAND, HIGH INVENTORY - THE HINDU BUSINESS LINE
Coal offtake is improving gradually as lockdown eases
Coal prices are expected to remain subdued to weak demand and high inventory l ...
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- Dalmia Cement Bharat India
- Goldman Sachs - Singapore
- Miang Besar Coal Terminal - Indonesia
- Thai Mozambique Logistica
- Videocon Industries ltd - India
- Eastern Energy - Thailand
- Petron Corporation, Philippines
- Uttam Galva Steels Limited - India
- Electricity Authority, New Zealand
- Grasim Industreis Ltd - India
- The Treasury - Australian Government
- Holcim Trading Pte Ltd - Singapore
- Kapuas Tunggal Persada - Indonesia
- Parliament of New Zealand
- Thiess Contractors Indonesia
- Commonwealth Bank - Australia
- Sakthi Sugars Limited - India
- ASAPP Information Group - India
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Edison Trading Spa - Italy
- Trasteel International SA, Italy
- Mercuria Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Parry Sugars Refinery, India
- Cigading International Bulk Terminal - Indonesia
- Oldendorff Carriers - Singapore
- PNOC Exploration Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Global Business Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Energy Link Ltd, New Zealand
- International Coal Ventures Pvt Ltd - India
- GVK Power & Infra Limited - India
- Electricity Generating Authority of Thailand
- Larsen & Toubro Limited - India
- Intertek Mineral Services - Indonesia
- Borneo Indobara - Indonesia
- LBH Netherlands Bv - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Africa Commodities Group - South Africa
- Sarangani Energy Corporation, Philippines
- Interocean Group of Companies - India
- Savvy Resources Ltd - HongKong
- Aboitiz Power Corporation - Philippines
- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meralco Power Generation, Philippines
- Kepco SPC Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Kumho Petrochemical, South Korea
- CNBM International Corporation - China
- Wilmar Investment Holdings
- Orica Mining Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Sree Jayajothi Cements Limited - India
- Power Finance Corporation Ltd., India
- Coastal Gujarat Power Limited - India
- Bhoruka Overseas - Indonesia
- San Jose City I Power Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Chamber of Mines of South Africa
- PetroVietnam Power Coal Import and Supply Company
- McConnell Dowell - Australia
- Bharathi Cement Corporation - India
- Malabar Cements Ltd - India
- Vizag Seaport Private Limited - India
- Kartika Selabumi Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GN Power Mariveles Coal Plant, Philippines
- Deloitte Consulting - India
- Orica Australia Pty. Ltd.
- Sojitz Corporation - Japan
- Formosa Plastics Group - Taiwan
- Barasentosa Lestari - Indonesia
- White Energy Company Limited
- Indo Tambangraya Megah - Indonesia
- Tamil Nadu electricity Board
- Leighton Contractors Pty Ltd - Australia
- London Commodity Brokers - England
- Manunggal Multi Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Port Waratah Coal Services - Australia
- Ministry of Mines - Canada
- Ministry of Transport, Egypt
- Toyota Tsusho Corporation, Japan
- Ministry of Finance - Indonesia
- Energy Development Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Star Paper Mills Limited - India
- Meenaskhi Energy Private Limited - India
- Planning Commission, India
- Medco Energi Mining Internasional
- Kobexindo Tractors - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- Georgia Ports Authority, United States
- SMG Consultants - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Essar Steel Hazira Ltd - India
- Vedanta Resources Plc - India
- Therma Luzon, Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Posco Energy - South Korea
- Aditya Birla Group - India
- Jindal Steel & Power Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Central Java Power - Indonesia
- Merrill Lynch Commodities Europe
- Ceylon Electricity Board - Sri Lanka
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- Standard Chartered Bank - UAE
- Ind-Barath Power Infra Limited - India
- Indogreen Group - Indonesia
- Central Electricity Authority - India
- Kaltim Prima Coal - Indonesia
- IEA Clean Coal Centre - UK
- Chettinad Cement Corporation Ltd - India
- Samtan Co., Ltd - South Korea
- Agrawal Coal Company - India
- Timah Investasi Mineral - Indoneisa
- Straits Asia Resources Limited - Singapore
- Salva Resources Pvt Ltd - India
- Coalindo Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Semirara Mining and Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Heidelberg Cement - Germany
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
- Australian Coal Association
- Simpson Spence & Young - Indonesia
- Indian Energy Exchange, India
- The State Trading Corporation of India Ltd
- Bangladesh Power Developement Board
- Maheswari Brothers Coal Limited - India
- Tata Chemicals Ltd - India
- PTC India Limited - India
- Minerals Council of Australia
- GMR Energy Limited - India
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- TeaM Sual Corporation - Philippines
- Mercator Lines Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- SN Aboitiz Power Inc, Philippines
- Eastern Coal Council - USA
- GAC Shipping (India) Pvt Ltd
- Renaissance Capital - South Africa
- Xindia Steels Limited - India
- Carbofer General Trading SA - India
- Indian Oil Corporation Limited
- Siam City Cement PLC, Thailand
- Karbindo Abesyapradhi - Indoneisa
- Altura Mining Limited, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- India Bulls Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bahari Cakrawala Sebuku - Indonesia
- Rio Tinto Coal - Australia
- MS Steel International - UAE
- Karaikal Port Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- ICICI Bank Limited - India
- Indika Energy - Indonesia
- The University of Queensland
- Economic Council, Georgia
- Jorong Barutama Greston.PT - Indonesia
- Bhushan Steel Limited - India
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- Bhatia International Limited - India
- Bulk Trading Sa - Switzerland
- Antam Resourcindo - Indonesia
- Cement Manufacturers Association - India
- Sical Logistics Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Lanco Infratech Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- Sindya Power Generating Company Private Ltd
- VISA Power Limited - India
- Siam City Cement - Thailand
- Wood Mackenzie - Singapore
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Australian Commodity Traders Exchange
- Singapore Mercantile Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Attock Cement Pakistan Limited
- Sinarmas Energy and Mining - Indonesia
- Indonesian Coal Mining Association
- CIMB Investment Bank - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate Of Revenue Intelligence - India
- Gujarat Sidhee Cement - India
- Global Coal Blending Company Limited - Australia
- Riau Bara Harum - Indonesia
- PowerSource Philippines DevCo
- Gujarat Electricity Regulatory Commission - India
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