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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, 11 April 23
OIL RISES ON CHINA STIMULUS EXPECTATIONS, WEAKER DOLLAR - REUTERS
Oil prices rose on Tuesday on expectations of potential economic stimulus by China, healthy demand in the rest of Asia and a drop in U.S. crude sto ...
Sunday, 09 April 23
CHINA’S BUSINESS INCOME REBOUND POINTS TO IMPROVING ECONOMY: OFFICIAL - XINHUA
Chinese businesses have posted a strong rebound in sales revenue since the beginning of this year in the latest signal of an improving economy.
...
Sunday, 09 April 23
COAL INDIA TO BOOST SUPPLIES TO INDUSTRIES AS UTILITIES’ INVENTORIES RISE - REUTERS
Coal India Ltd will increase supplies to industries, the world’s largest coal miner said on Wednesday as fuel inventories at utilities run by ...
Thursday, 06 April 23
MARKET INSIGHT - INTERMODAL
LNG Current Supply/Demand Dynamics
This year, LNG supply will likely exceed demand, so prices will need to decline to levels that will encourag ...
Sunday, 26 March 23
EUROPE’S RUSH TO LNG COULD TURN INTO 'WORLD’S MOST EXPENSIVE AND UNNECESSARY INSURANCE POLICY'- CNBC
Europe’s rapid buildout of liquefied natural gas infrastructure is on track to far exceed demand by the end of the decade, according to new r ...
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- Wilmar Investment Holdings
- Wood Mackenzie - Singapore
- Bukit Baiduri Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Bharathi Cement Corporation - India
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- SN Aboitiz Power Inc, Philippines
- Carbofer General Trading SA - India
- Sinarmas Energy and Mining - Indonesia
- New Zealand Coal & Carbon
- Thiess Contractors Indonesia
- Indogreen Group - Indonesia
- Jindal Steel & Power Ltd - India
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- Savvy Resources Ltd - HongKong
- Marubeni Corporation - India
- Makarim & Taira - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Uttam Galva Steels Limited - India
- Banpu Public Company Limited - Thailand
- Antam Resourcindo - Indonesia
- Indian Energy Exchange, India
- Kobexindo Tractors - Indoneisa
- Medco Energi Mining Internasional
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- GMR Energy Limited - India
- Rio Tinto Coal - Australia
- Tamil Nadu electricity Board
- Kartika Selabumi Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Kohat Cement Company Ltd. - Pakistan
- The Treasury - Australian Government
- Parry Sugars Refinery, India
- Larsen & Toubro Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Planning Commission, India
- PNOC Exploration Corporation - Philippines
- MS Steel International - UAE
- Coal and Oil Company - UAE
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Binh Thuan Hamico - Vietnam
- Independent Power Producers Association of India
- Power Finance Corporation Ltd., India
- Cement Manufacturers Association - India
- Singapore Mercantile Exchange
- London Commodity Brokers - England
- Coastal Gujarat Power Limited - India
- Vedanta Resources Plc - India
- Global Green Power PLC Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Pendopo Energi Batubara - Indonesia
- Edison Trading Spa - Italy
- Maheswari Brothers Coal Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CNBM International Corporation - China
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Orica Mining Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Minerals Council of Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Economic Council, Georgia
- Interocean Group of Companies - India
- Aboitiz Power Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Anglo American - United Kingdom
- Renaissance Capital - South Africa
- Thai Mozambique Logistica
- Mercator Lines Limited - India
- Semirara Mining and Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
- Eastern Coal Council - USA
- Sakthi Sugars Limited - India
- Meralco Power Generation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Bayan Resources Tbk. - Indonesia
- Holcim Trading Pte Ltd - Singapore
- AsiaOL BioFuels Corp., Philippines
- Price Waterhouse Coopers - Russia
- Coalindo Energy - Indonesia
- Deloitte Consulting - India
- Sree Jayajothi Cements Limited - India
- PowerSource Philippines DevCo
- Therma Luzon, Inc, Philippines
- Parliament of New Zealand
- Karaikal Port Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Link Ltd, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Energy - Thailand
- Bangladesh Power Developement Board
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- OPG Power Generation Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Baramulti Group, Indonesia
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- Star Paper Mills Limited - India
- The University of Queensland
- Latin American Coal - Colombia
- Cigading International Bulk Terminal - Indonesia
- Grasim Industreis Ltd - India
- TeaM Sual Corporation - Philippines
- Mintek Dendrill Indonesia
- San Jose City I Power Corp, Philippines
- Australian Commodity Traders Exchange
- Videocon Industries ltd - India
- White Energy Company Limited
- Siam City Cement PLC, Thailand
- Gujarat Sidhee Cement - India
- Oldendorff Carriers - Singapore
- SMC Global Power, Philippines
- Standard Chartered Bank - UAE
- Sical Logistics Limited - India
- Chamber of Mines of South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mjunction Services Limited - India
- Iligan Light & Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Samtan Co., Ltd - South Korea
- Agrawal Coal Company - India
- South Luzon Thermal Energy Corporation
- Offshore Bulk Terminal Pte Ltd, Singapore
- Madhucon Powers Ltd - India
- Orica Australia Pty. Ltd.
- Trasteel International SA, Italy
- Xindia Steels Limited - India
- Bhoruka Overseas - Indonesia
- CIMB Investment Bank - Malaysia
- Semirara Mining Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Sindya Power Generating Company Private Ltd
- Intertek Mineral Services - Indonesia
- Jaiprakash Power Ventures ltd
- Directorate Of Revenue Intelligence - India
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Borneo Indobara - Indonesia
- Ambuja Cements Ltd - India
- Energy Development Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Petron Corporation, Philippines
- McConnell Dowell - Australia
- ASAPP Information Group - India
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- The State Trading Corporation of India Ltd
- Jorong Barutama Greston.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Sojitz Corporation - Japan
- Ministry of Finance - Indonesia
- Metalloyd Limited - United Kingdom
- Aditya Birla Group - India
- Indian Oil Corporation Limited
- Africa Commodities Group - South Africa
- Riau Bara Harum - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Altura Mining Limited, Indonesia
- Indo Tambangraya Megah - Indonesia
- Romanian Commodities Exchange
- Manunggal Multi Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Posco Energy - South Korea
- Indika Energy - Indonesia
- Indonesian Coal Mining Association
- Ministry of Mines - Canada
- Siam City Cement - Thailand
- Heidelberg Cement - Germany
- Bulk Trading Sa - Switzerland
- Straits Asia Resources Limited - Singapore
- Ind-Barath Power Infra Limited - India
- PTC India Limited - India
- Kepco SPC Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Karbindo Abesyapradhi - Indoneisa
- Central Electricity Authority - India
- Billiton Holdings Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- LBH Netherlands Bv - Netherlands
- Attock Cement Pakistan Limited
- Malabar Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- Mercuria Energy - Indonesia
- Electricity Authority, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Central Java Power - Indonesia
- Vizag Seaport Private Limited - India
- Bhatia International Limited - India
- Electricity Generating Authority of Thailand
- Lanco Infratech Ltd - India
- Chettinad Cement Corporation Ltd - India
- European Bulk Services B.V. - Netherlands
- ICICI Bank Limited - India
- Port Waratah Coal Services - Australia
- Leighton Contractors Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Toyota Tsusho Corporation, Japan
- Australian Coal Association
- Kaltim Prima Coal - Indonesia
- Tata Chemicals Ltd - India
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