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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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Thursday, 05 March 20
SEABORNE COAL'S STRUGGLES IN ASIA ARE MORE THAN JUST CHINA CORONAVIRUS - REUTERS
Asia’s seaborne coal markets stumbled in February and it appears the coronavirus outbreak in China may dodge most of the blame, with the weak ...
Thursday, 05 March 20
INDONESIA'S BUKIT ASAM 2019 OUTPUT RISES 10.2% Y/Y - REUTERS
PT Bukit Asam, Indonesia’s state-owned coal miner, said on Wednesday its output in 2019 rose 10.2% to 29.1 million tonnes.
Coa ...
Thursday, 05 March 20
SEEING REMOTELY - IN SAFETY: BUREAU VERITAS PERFORMS FIRST SURVEY BY DRONE - BUREAU VERITAS
Bureau Veritas Marine & Offshore (BV), a world leader in testing, inspection and certification (TIC) services has completed its first survey by ...
Wednesday, 04 March 20
AN EPIDEMIC OF UNCERTAINTY - THE CORONAVIRUS AND FORCE MAJEURE - WFW
KNOWLEDGE TO ELEVATE
Do the effects of the coronavirus give rise to legitimate force majeure claims in connection with shipbuilding contracts ...
Wednesday, 04 March 20
CHINA IMPORTED 76.8 MLN TONNES OF CRUDE OIL FOR JANUARY & FEBRUARY 2020; UP 3.4% YOY - REFINITIV | BC
The COVID-19 crisis has been gripping China already for almost two months now. It’s having a huge negative impact on the economy, and this is ...
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- IHS Mccloskey Coal Group - USA
- PTC India Limited - India
- Directorate Of Revenue Intelligence - India
- Sree Jayajothi Cements Limited - India
- Mjunction Services Limited - India
- Cigading International Bulk Terminal - Indonesia
- Georgia Ports Authority, United States
- Heidelberg Cement - Germany
- Trasteel International SA, Italy
- Minerals Council of Australia
- Coal and Oil Company - UAE
- SMC Global Power, Philippines
- Ind-Barath Power Infra Limited - India
- CNBM International Corporation - China
- Aboitiz Power Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Coalindo Energy - Indonesia
- Dalmia Cement Bharat India
- Metalloyd Limited - United Kingdom
- Binh Thuan Hamico - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Essar Steel Hazira Ltd - India
- Orica Australia Pty. Ltd.
- Gujarat Sidhee Cement - India
- Xindia Steels Limited - India
- Mintek Dendrill Indonesia
- Sinarmas Energy and Mining - Indonesia
- Larsen & Toubro Limited - India
- Kartika Selabumi Mining - Indonesia
- Makarim & Taira - Indonesia
- Vedanta Resources Plc - India
- European Bulk Services B.V. - Netherlands
- Maheswari Brothers Coal Limited - India
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
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- VISA Power Limited - India
- Bulk Trading Sa - Switzerland
- Medco Energi Mining Internasional
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- New Zealand Coal & Carbon
- Orica Mining Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Kaltim Prima Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Carbofer General Trading SA - India
- Cement Manufacturers Association - India
- San Jose City I Power Corp, Philippines
- Latin American Coal - Colombia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Parliament of New Zealand
- Intertek Mineral Services - Indonesia
- Altura Mining Limited, Indonesia
- GMR Energy Limited - India
- Thiess Contractors Indonesia
- McConnell Dowell - Australia
- South Luzon Thermal Energy Corporation
- Edison Trading Spa - Italy
- Agrawal Coal Company - India
- Maharashtra Electricity Regulatory Commission - India
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- Meralco Power Generation, Philippines
- Deloitte Consulting - India
- Independent Power Producers Association of India
- Madhucon Powers Ltd - India
- Energy Development Corp, Philippines
- SMG Consultants - Indonesia
- Vizag Seaport Private Limited - India
- Kepco SPC Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- The University of Queensland
- Sindya Power Generating Company Private Ltd
- Sojitz Corporation - Japan
- Anglo American - United Kingdom
- Australian Coal Association
- India Bulls Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Indika Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement PLC, Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Chamber of Mines of South Africa
- Coastal Gujarat Power Limited - India
- Ambuja Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Mercuria Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Marubeni Corporation - India
- Karaikal Port Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Merrill Lynch Commodities Europe
- PetroVietnam Power Coal Import and Supply Company
- Iligan Light & Power Inc, Philippines
- Attock Cement Pakistan Limited
- MS Steel International - UAE
- GAC Shipping (India) Pvt Ltd
- Singapore Mercantile Exchange
- Energy Link Ltd, New Zealand
- Tata Chemicals Ltd - India
- Wilmar Investment Holdings
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wood Mackenzie - Singapore
- Riau Bara Harum - Indonesia
- Indogreen Group - Indonesia
- Rio Tinto Coal - Australia
- Indian Oil Corporation Limited
- Global Business Power Corporation, Philippines
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
- Ministry of Finance - Indonesia
- Videocon Industries ltd - India
- Rashtriya Ispat Nigam Limited - India
- Parry Sugars Refinery, India
- The Treasury - Australian Government
- Commonwealth Bank - Australia
- Central Java Power - Indonesia
- Ministry of Mines - Canada
- Power Finance Corporation Ltd., India
- Sical Logistics Limited - India
- Goldman Sachs - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Meenaskhi Energy Private Limited - India
- Romanian Commodities Exchange
- Bhushan Steel Limited - India
- Sarangani Energy Corporation, Philippines
- Central Electricity Authority - India
- Bangladesh Power Developement Board
- Ceylon Electricity Board - Sri Lanka
- Renaissance Capital - South Africa
- Bhatia International Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Eastern Energy - Thailand
- Thai Mozambique Logistica
- Leighton Contractors Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- CIMB Investment Bank - Malaysia
- Timah Investasi Mineral - Indoneisa
- Standard Chartered Bank - UAE
- Price Waterhouse Coopers - Russia
- Manunggal Multi Energi - Indonesia
- Therma Luzon, Inc, Philippines
- Semirara Mining Corp, Philippines
- Eastern Coal Council - USA
- Petron Corporation, Philippines
- ICICI Bank Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Banpu Public Company Limited - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Uttam Galva Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- London Commodity Brokers - England
- Bharathi Cement Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Chettinad Cement Corporation Ltd - India
- Siam City Cement - Thailand
- Sakthi Sugars Limited - India
- The State Trading Corporation of India Ltd
- Aditya Birla Group - India
- Indian Energy Exchange, India
- PowerSource Philippines DevCo
- Australian Commodity Traders Exchange
- Jindal Steel & Power Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Lanco Infratech Ltd - India
- Kumho Petrochemical, South Korea
- Bahari Cakrawala Sebuku - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- PNOC Exploration Corporation - Philippines
- Baramulti Group, Indonesia
- ASAPP Information Group - India
- International Coal Ventures Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Straits Asia Resources Limited - Singapore
- Billiton Holdings Pty Ltd - Australia
- Planning Commission, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Formosa Plastics Group - Taiwan
- Indo Tambangraya Megah - Indonesia
- Bukit Baiduri Energy - Indonesia
- Economic Council, Georgia
- Kideco Jaya Agung - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Posco Energy - South Korea
- Bhoruka Overseas - Indonesia
- Samtan Co., Ltd - South Korea
- Global Green Power PLC Corporation, Philippines
- White Energy Company Limited
- Indonesian Coal Mining Association
- Toyota Tsusho Corporation, Japan
- Ministry of Transport, Egypt
- Holcim Trading Pte Ltd - Singapore
- Africa Commodities Group - South Africa
- Electricity Authority, New Zealand
- Interocean Group of Companies - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
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