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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, 01 May 20
GLOBAL COAL DEMAND TO FALL BY 8% IN Q1 2020 RELATIVE TO Q1 2019 - IEA
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Friday, 01 May 20
LUKOIL SHARES LUBRICANT EXPERIENCE AFTER FIRST 100 DAYS OF OPERATION ON VLSFO
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Wednesday, 29 April 20
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Monday, 27 April 20
INCIDENT INVESTIGATION: SEARCH FOR THE CAUSE, NOT THE VILLAIN - GARD
Incident investigations often conclude with placing the blame for an incident on the crew. Causes of the incidents are usually identified as proced ...
Monday, 27 April 20
A 58,000DWT VESSEL WAS FIXED DELIVERY SINGAPORE TRIP VIA INDONESIA, RE-DELIVERY WC INDIA, AT $4,500 - BALTIC BRIEFING
Capesize
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Orica Australia Pty. Ltd.
- Karbindo Abesyapradhi - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Wood Mackenzie - Singapore
- Indika Energy - Indonesia
- Renaissance Capital - South Africa
- Xindia Steels Limited - India
- ICICI Bank Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Latin American Coal - Colombia
- Mercator Lines Limited - India
- Bayan Resources Tbk. - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cement Manufacturers Association - India
- Aditya Birla Group - India
- LBH Netherlands Bv - Netherlands
- San Jose City I Power Corp, Philippines
- Makarim & Taira - Indonesia
- Binh Thuan Hamico - Vietnam
- Bhoruka Overseas - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asmin Koalindo Tuhup - Indonesia
- Videocon Industries ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Carbofer General Trading SA - India
- The Treasury - Australian Government
- Jindal Steel & Power Ltd - India
- Sakthi Sugars Limited - India
- Thai Mozambique Logistica
- Coalindo Energy - Indonesia
- Standard Chartered Bank - UAE
- Interocean Group of Companies - India
- Bharathi Cement Corporation - India
- Toyota Tsusho Corporation, Japan
- AsiaOL BioFuels Corp., Philippines
- Sarangani Energy Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- Pendopo Energi Batubara - Indonesia
- Ambuja Cements Ltd - India
- Ministry of Mines - Canada
- Economic Council, Georgia
- Planning Commission, India
- Parry Sugars Refinery, India
- London Commodity Brokers - England
- Attock Cement Pakistan Limited
- GMR Energy Limited - India
- Kobexindo Tractors - Indoneisa
- IHS Mccloskey Coal Group - USA
- Eastern Coal Council - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Independent Power Producers Association of India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMG Consultants - Indonesia
- Romanian Commodities Exchange
- Kartika Selabumi Mining - Indonesia
- Orica Mining Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Oldendorff Carriers - Singapore
- Kohat Cement Company Ltd. - Pakistan
- TeaM Sual Corporation - Philippines
- Thiess Contractors Indonesia
- Goldman Sachs - Singapore
- Sical Logistics Limited - India
- Medco Energi Mining Internasional
- Petron Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Bhatia International Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Coastal Gujarat Power Limited - India
- CNBM International Corporation - China
- Barasentosa Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- Grasim Industreis Ltd - India
- Formosa Plastics Group - Taiwan
- Anglo American - United Kingdom
- PNOC Exploration Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Meralco Power Generation, Philippines
- Central Java Power - Indonesia
- Mintek Dendrill Indonesia
- Kumho Petrochemical, South Korea
- India Bulls Power Limited - India
- PTC India Limited - India
- Trasteel International SA, Italy
- Africa Commodities Group - South Africa
- Kaltim Prima Coal - Indonesia
- Vedanta Resources Plc - India
- Indian Oil Corporation Limited
- Tamil Nadu electricity Board
- Directorate General of MIneral and Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Indo Tambangraya Megah - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Simpson Spence & Young - Indonesia
- Ceylon Electricity Board - Sri Lanka
- European Bulk Services B.V. - Netherlands
- Manunggal Multi Energi - Indonesia
- VISA Power Limited - India
- Chamber of Mines of South Africa
- Tata Chemicals Ltd - India
- CIMB Investment Bank - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Port Waratah Coal Services - Australia
- Kapuas Tunggal Persada - Indonesia
- Leighton Contractors Pty Ltd - Australia
- White Energy Company Limited
- Bukit Makmur.PT - Indonesia
- Malabar Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Meenaskhi Energy Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Singapore Mercantile Exchange
- Eastern Energy - Thailand
- Merrill Lynch Commodities Europe
- Energy Link Ltd, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Dalmia Cement Bharat India
- Indian Energy Exchange, India
- Mercuria Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Australian Commodity Traders Exchange
- Deloitte Consulting - India
- Altura Mining Limited, Indonesia
- Global Coal Blending Company Limited - Australia
- Bangladesh Power Developement Board
- Minerals Council of Australia
- Electricity Authority, New Zealand
- New Zealand Coal & Carbon
- PowerSource Philippines DevCo
- Cigading International Bulk Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Mjunction Services Limited - India
- Iligan Light & Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Lanco Infratech Ltd - India
- Straits Asia Resources Limited - Singapore
- Central Electricity Authority - India
- ASAPP Information Group - India
- Agrawal Coal Company - India
- Bhushan Steel Limited - India
- Wilmar Investment Holdings
- Essar Steel Hazira Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement - Thailand
- Maheswari Brothers Coal Limited - India
- MS Steel International - UAE
- GVK Power & Infra Limited - India
- Energy Development Corp, Philippines
- Samtan Co., Ltd - South Korea
- Parliament of New Zealand
- Riau Bara Harum - Indonesia
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- Semirara Mining Corp, Philippines
- IEA Clean Coal Centre - UK
- Georgia Ports Authority, United States
- Billiton Holdings Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Ministry of Transport, Egypt
- Baramulti Group, Indonesia
- McConnell Dowell - Australia
- Ind-Barath Power Infra Limited - India
- Heidelberg Cement - Germany
- Siam City Cement PLC, Thailand
- Star Paper Mills Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Power Finance Corporation Ltd., India
- The State Trading Corporation of India Ltd
- GAC Shipping (India) Pvt Ltd
- Indonesian Coal Mining Association
- Holcim Trading Pte Ltd - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Marubeni Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Globalindo Alam Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Savvy Resources Ltd - HongKong
- Chettinad Cement Corporation Ltd - India
- Sindya Power Generating Company Private Ltd
- Kideco Jaya Agung - Indonesia
- Directorate Of Revenue Intelligence - India
- Salva Resources Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Australian Coal Association
- Alfred C Toepfer International GmbH - Germany
- Coal and Oil Company - UAE
- Borneo Indobara - Indonesia
- Electricity Generating Authority of Thailand
- SMC Global Power, Philippines
- Indogreen Group - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Ministry of Finance - Indonesia
- Edison Trading Spa - Italy
- Sojitz Corporation - Japan
- Timah Investasi Mineral - Indoneisa
- Madhucon Powers Ltd - India
- Bulk Trading Sa - Switzerland
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