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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, 06 February 20
CHINESE DEMAND KEY UNCERTAINTY FOR SEABORNE COAL MARKET IN 2020 - THE BRICS POST
Coal trader Noble Resources head of research Rodrigo Echeverri Cardozo had penciled in a 3 Mt drop in Chinese import demand for 2020, but it could ...
Wednesday, 05 February 20
CORONAVIRUS AND THE SHIPPING INDUSTRY - WATSON, FARLEY & WILLIAMS
The continued spread of Coronavirus and governmental measures to minimise the impact is likely to affect the shipping industry and supply chain.
...
Wednesday, 05 February 20
INDONESIA'S COAL PRICE REFERENCE UP 1.46% IN FEBRUARY
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised up the benchmark price of Indonesian thermal co ...
Wednesday, 05 February 20
MARKET INSIGHT - INTERMODAL
The oil and gas industry benefitted from a strong and solid ground in the previous year. We witnessed a slow but steady increase in bunker’s ...
Wednesday, 05 February 20
RUSSIA EXPORTED 28.6 MLN TONNES OF LNG IN 2019 - REFINITIV
A lot of attention has been paid recently on the surge in LNG exports from the United States. However, another country which is seeing truly expone ...
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- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Ministry of Finance - Indonesia
- Central Electricity Authority - India
- Eastern Energy - Thailand
- AsiaOL BioFuels Corp., Philippines
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Anglo American - United Kingdom
- Oldendorff Carriers - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Commonwealth Bank - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CIMB Investment Bank - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement PLC, Thailand
- CNBM International Corporation - China
- Banpu Public Company Limited - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Aditya Birla Group - India
- Ceylon Electricity Board - Sri Lanka
- Sojitz Corporation - Japan
- Petron Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Sidhee Cement - India
- European Bulk Services B.V. - Netherlands
- Riau Bara Harum - Indonesia
- Indonesian Coal Mining Association
- Ministry of Mines - Canada
- Global Green Power PLC Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Bangladesh Power Developement Board
- Larsen & Toubro Limited - India
- Bukit Baiduri Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Videocon Industries ltd - India
- Indian Energy Exchange, India
- Edison Trading Spa - Italy
- Bulk Trading Sa - Switzerland
- Bhoruka Overseas - Indonesia
- Kepco SPC Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Coastal Gujarat Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- SMC Global Power, Philippines
- Sakthi Sugars Limited - India
- Mercuria Energy - Indonesia
- Indian Oil Corporation Limited
- Dalmia Cement Bharat India
- Wilmar Investment Holdings
- International Coal Ventures Pvt Ltd - India
- Mercator Lines Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Therma Luzon, Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- MS Steel International - UAE
- Marubeni Corporation - India
- Singapore Mercantile Exchange
- South Luzon Thermal Energy Corporation
- Sindya Power Generating Company Private Ltd
- Port Waratah Coal Services - Australia
- LBH Netherlands Bv - Netherlands
- Vedanta Resources Plc - India
- Gujarat Mineral Development Corp Ltd - India
- SMG Consultants - Indonesia
- Price Waterhouse Coopers - Russia
- Attock Cement Pakistan Limited
- Energy Development Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- GMR Energy Limited - India
- Kartika Selabumi Mining - Indonesia
- Economic Council, Georgia
- Coal and Oil Company - UAE
- Pendopo Energi Batubara - Indonesia
- Merrill Lynch Commodities Europe
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- Medco Energi Mining Internasional
- Barasentosa Lestari - Indonesia
- Bhatia International Limited - India
- GAC Shipping (India) Pvt Ltd
- San Jose City I Power Corp, Philippines
- Standard Chartered Bank - UAE
- Semirara Mining Corp, Philippines
- Thai Mozambique Logistica
- Sree Jayajothi Cements Limited - India
- Georgia Ports Authority, United States
- The University of Queensland
- Agrawal Coal Company - India
- Carbofer General Trading SA - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sical Logistics Limited - India
- Latin American Coal - Colombia
- Jindal Steel & Power Ltd - India
- Global Coal Blending Company Limited - Australia
- Lanco Infratech Ltd - India
- Australian Coal Association
- Metalloyd Limited - United Kingdom
- Uttam Galva Steels Limited - India
- Parliament of New Zealand
- Orica Mining Services - Indonesia
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- SN Aboitiz Power Inc, Philippines
- Borneo Indobara - Indonesia
- Jaiprakash Power Ventures ltd
- Simpson Spence & Young - Indonesia
- Savvy Resources Ltd - HongKong
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mjunction Services Limited - India
- Electricity Authority, New Zealand
- Kobexindo Tractors - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Bukit Makmur.PT - Indonesia
- The Treasury - Australian Government
- Australian Commodity Traders Exchange
- McConnell Dowell - Australia
- Siam City Cement - Thailand
- ASAPP Information Group - India
- Renaissance Capital - South Africa
- Directorate Of Revenue Intelligence - India
- Bharathi Cement Corporation - India
- Eastern Coal Council - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- White Energy Company Limited
- Coalindo Energy - Indonesia
- Deloitte Consulting - India
- Power Finance Corporation Ltd., India
- Central Java Power - Indonesia
- Cement Manufacturers Association - India
- Manunggal Multi Energi - Indonesia
- Bhushan Steel Limited - India
- Vizag Seaport Private Limited - India
- Intertek Mineral Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Maheswari Brothers Coal Limited - India
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Ambuja Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Antam Resourcindo - Indonesia
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- Minerals Council of Australia
- New Zealand Coal & Carbon
- Aboitiz Power Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Tata Chemicals Ltd - India
- Rio Tinto Coal - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Posco Energy - South Korea
- Independent Power Producers Association of India
- Directorate General of MIneral and Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- PTC India Limited - India
- Energy Link Ltd, New Zealand
- Makarim & Taira - Indonesia
- London Commodity Brokers - England
- Salva Resources Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- VISA Power Limited - India
- Altura Mining Limited, Indonesia
- Iligan Light & Power Inc, Philippines
- Grasim Industreis Ltd - India
- Malabar Cements Ltd - India
- Star Paper Mills Limited - India
- Global Business Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Kumho Petrochemical, South Korea
- ICICI Bank Limited - India
- Orica Australia Pty. Ltd.
- Parry Sugars Refinery, India
- GN Power Mariveles Coal Plant, Philippines
- Heidelberg Cement - Germany
- India Bulls Power Limited - India
- Indika Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Billiton Holdings Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Romanian Commodities Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mintek Dendrill Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indogreen Group - Indonesia
- Trasteel International SA, Italy
- Tamil Nadu electricity Board
- PowerSource Philippines DevCo
- Interocean Group of Companies - India
- Timah Investasi Mineral - Indoneisa
- Electricity Generating Authority of Thailand
- Ministry of Transport, Egypt
- Madhucon Powers Ltd - India
- IEA Clean Coal Centre - UK
- Globalindo Alam Lestari - Indonesia
- Thiess Contractors Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Formosa Plastics Group - Taiwan
- TeaM Sual Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Goldman Sachs - Singapore
- Semirara Mining and Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
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