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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, 09 June 20
BUNKER SUPPLY CONTRACTS - KEY CONSIDERATIONS FOR THE BUYER - GARD
KNOWLEDGE TO ELEVATE
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Tuesday, 09 June 20
INDIA: COAL IMPORT DROPS BY 20% TO NEARLY 19 MILLION TONNES IN MAY, SAYS REPORT - HINDUSTAN TIMES
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Monday, 08 June 20
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Monday, 08 June 20
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Monday, 08 June 20
JUNE 2020 INDONESIAN COAL PRICE REFERENCE HIT US$ 52.98 A TON, ITS LOWEST LEVEL SINCE AT LEAST AUGUST 2016
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
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- The Treasury - Australian Government
- Neyveli Lignite Corporation Ltd, - India
- Iligan Light & Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Antam Resourcindo - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bulk Trading Sa - Switzerland
- Sinarmas Energy and Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Directorate Of Revenue Intelligence - India
- European Bulk Services B.V. - Netherlands
- SMG Consultants - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Makmur.PT - Indonesia
- Latin American Coal - Colombia
- Ambuja Cements Ltd - India
- GVK Power & Infra Limited - India
- Wood Mackenzie - Singapore
- GAC Shipping (India) Pvt Ltd
- Malabar Cements Ltd - India
- Gujarat Sidhee Cement - India
- Baramulti Group, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aboitiz Power Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- SN Aboitiz Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Marubeni Corporation - India
- Goldman Sachs - Singapore
- Thai Mozambique Logistica
- Sical Logistics Limited - India
- Electricity Authority, New Zealand
- Rashtriya Ispat Nigam Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Australian Coal Association
- PetroVietnam Power Coal Import and Supply Company
- Dalmia Cement Bharat India
- PNOC Exploration Corporation - Philippines
- Petron Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Maheswari Brothers Coal Limited - India
- Thiess Contractors Indonesia
- The University of Queensland
- Sakthi Sugars Limited - India
- Coalindo Energy - Indonesia
- The State Trading Corporation of India Ltd
- Karaikal Port Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Parry Sugars Refinery, India
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- CNBM International Corporation - China
- Africa Commodities Group - South Africa
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- Globalindo Alam Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indonesian Coal Mining Association
- Coastal Gujarat Power Limited - India
- Vedanta Resources Plc - India
- Cement Manufacturers Association - India
- Attock Cement Pakistan Limited
- Savvy Resources Ltd - HongKong
- Ministry of Transport, Egypt
- Siam City Cement PLC, Thailand
- Central Java Power - Indonesia
- Timah Investasi Mineral - Indoneisa
- Carbofer General Trading SA - India
- Kumho Petrochemical, South Korea
- Tamil Nadu electricity Board
- Vizag Seaport Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Kaltim Prima Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- SMC Global Power, Philippines
- OPG Power Generation Pvt Ltd - India
- Anglo American - United Kingdom
- White Energy Company Limited
- Asmin Koalindo Tuhup - Indonesia
- Australian Commodity Traders Exchange
- IHS Mccloskey Coal Group - USA
- Bayan Resources Tbk. - Indonesia
- MS Steel International - UAE
- Price Waterhouse Coopers - Russia
- Bhushan Steel Limited - India
- Indian Oil Corporation Limited
- Indika Energy - Indonesia
- VISA Power Limited - India
- San Jose City I Power Corp, Philippines
- Economic Council, Georgia
- Directorate General of MIneral and Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Star Paper Mills Limited - India
- Independent Power Producers Association of India
- Merrill Lynch Commodities Europe
- Alfred C Toepfer International GmbH - Germany
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Meralco Power Generation, Philippines
- Minerals Council of Australia
- Madhucon Powers Ltd - India
- Mercuria Energy - Indonesia
- Parliament of New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- India Bulls Power Limited - India
- Intertek Mineral Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Lanco Infratech Ltd - India
- Meenaskhi Energy Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Posco Energy - South Korea
- Formosa Plastics Group - Taiwan
- Bangladesh Power Developement Board
- Altura Mining Limited, Indonesia
- Indogreen Group - Indonesia
- Commonwealth Bank - Australia
- AsiaOL BioFuels Corp., Philippines
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- Sojitz Corporation - Japan
- Medco Energi Mining Internasional
- Oldendorff Carriers - Singapore
- Bhoruka Overseas - Indonesia
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- Aditya Birla Group - India
- Salva Resources Pvt Ltd - India
- Indian Energy Exchange, India
- Mintek Dendrill Indonesia
- Mercator Lines Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Binh Thuan Hamico - Vietnam
- Kobexindo Tractors - Indoneisa
- Manunggal Multi Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- ASAPP Information Group - India
- Global Business Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Planning Commission, India
- LBH Netherlands Bv - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Straits Asia Resources Limited - Singapore
- PTC India Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- London Commodity Brokers - England
- PowerSource Philippines DevCo
- Mjunction Services Limited - India
- Coal and Oil Company - UAE
- Uttam Galva Steels Limited - India
- Wilmar Investment Holdings
- Energy Link Ltd, New Zealand
- Ind-Barath Power Infra Limited - India
- Xindia Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Jorong Barutama Greston.PT - Indonesia
- Central Electricity Authority - India
- Port Waratah Coal Services - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Development Corp, Philippines
- Electricity Generating Authority of Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Edison Trading Spa - Italy
- Sindya Power Generating Company Private Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Therma Luzon, Inc, Philippines
- Semirara Mining Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Samtan Co., Ltd - South Korea
- Kartika Selabumi Mining - Indonesia
- Romanian Commodities Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Standard Chartered Bank - UAE
- New Zealand Coal & Carbon
- Tata Chemicals Ltd - India
- Deloitte Consulting - India
- South Luzon Thermal Energy Corporation
- Larsen & Toubro Limited - India
- Kapuas Tunggal Persada - Indonesia
- Simpson Spence & Young - Indonesia
- Siam City Cement - Thailand
- Bhatia International Limited - India
- Barasentosa Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Riau Bara Harum - Indonesia
- ICICI Bank Limited - India
- Sarangani Energy Corporation, Philippines
- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Grasim Industreis Ltd - India
- Eastern Coal Council - USA
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- Georgia Ports Authority, United States
- Chamber of Mines of South Africa
- Power Finance Corporation Ltd., India
- Cigading International Bulk Terminal - Indonesia
- Ministry of Finance - Indonesia
- Jindal Steel & Power Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- McConnell Dowell - Australia
- Singapore Mercantile Exchange
- Banpu Public Company Limited - Thailand
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