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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, 23 January 20
AFRICAN POWER PLATFORM PUBLISHES REPORTS ON POWER SECTOR FRAMEWORK FOR SELECTED AFRICAN COUNTRIES
Press Release: African Power Platform publishes Reports on Power Sector Framework for selected African Countries
With the repo ...
Thursday, 23 January 20
COAL-BASED ELECTRICITY GENERATION SURGES 95% IN 2019 - PROFIT PAKISTAN TODAY
Coal-based power generation jumped 94.5 percent to 2,030 Gigawatt hours (GWh) in the year to November 2019, taking its share in the country’s ...
Wednesday, 22 January 20
INDIA: COAL PRODUCTION FROM CAPTIVE MINES RAISES 24% OUTPUT IN APRIL TO DECEMBER - FINANCIAL EXPRESS
Coal production from captive mines in the first nine months of the ongoing financial year was up 24% year-on-year (y-o-y) at 40.93 million tonne (M ...
Wednesday, 22 January 20
SHIPPING MARKET INSIGHT - INTERMODAL
It seems that we are finally seeing whitish smoke as far as the trade feud between the US and China is concerned, while following this much anticip ...
Tuesday, 21 January 20
IRON ORE - 5 THINGS TO WATCH IN 2020 - WOOD MACKENZIE
Wood Mackenzie identifies five trends that will impact the iron ore industry.
Slower demand growth (especially in China) and a decen ...
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- Commonwealth Bank - Australia
- Riau Bara Harum - Indonesia
- Coal and Oil Company - UAE
- Miang Besar Coal Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bhoruka Overseas - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Carbofer General Trading SA - India
- Petron Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- PowerSource Philippines DevCo
- Star Paper Mills Limited - India
- Leighton Contractors Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Kepco SPC Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Ambuja Cements Ltd - India
- Ministry of Finance - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMC Global Power, Philippines
- Goldman Sachs - Singapore
- Electricity Authority, New Zealand
- Sarangani Energy Corporation, Philippines
- Sakthi Sugars Limited - India
- Energy Development Corp, Philippines
- Heidelberg Cement - Germany
- Vedanta Resources Plc - India
- LBH Netherlands Bv - Netherlands
- Coastal Gujarat Power Limited - India
- Kaltim Prima Coal - Indonesia
- Economic Council, Georgia
- Aditya Birla Group - India
- Africa Commodities Group - South Africa
- AsiaOL BioFuels Corp., Philippines
- PetroVietnam Power Coal Import and Supply Company
- Cement Manufacturers Association - India
- Wilmar Investment Holdings
- Directorate General of MIneral and Coal - Indonesia
- ASAPP Information Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- International Coal Ventures Pvt Ltd - India
- Semirara Mining Corp, Philippines
- The State Trading Corporation of India Ltd
- Eastern Coal Council - USA
- Independent Power Producers Association of India
- Gujarat Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Therma Luzon, Inc, Philippines
- Mjunction Services Limited - India
- Parry Sugars Refinery, India
- Kideco Jaya Agung - Indonesia
- Chettinad Cement Corporation Ltd - India
- Metalloyd Limited - United Kingdom
- Central Electricity Authority - India
- Holcim Trading Pte Ltd - Singapore
- Pendopo Energi Batubara - Indonesia
- Vizag Seaport Private Limited - India
- Orica Mining Services - Indonesia
- Ministry of Mines - Canada
- Simpson Spence & Young - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Essar Steel Hazira Ltd - India
- Siam City Cement - Thailand
- Agrawal Coal Company - India
- Global Green Power PLC Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Makarim & Taira - Indonesia
- Ministry of Transport, Egypt
- Marubeni Corporation - India
- Bayan Resources Tbk. - Indonesia
- European Bulk Services B.V. - Netherlands
- Semirara Mining and Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Indonesian Coal Mining Association
- Tamil Nadu electricity Board
- Romanian Commodities Exchange
- Coalindo Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Kumho Petrochemical, South Korea
- Maheswari Brothers Coal Limited - India
- Samtan Co., Ltd - South Korea
- Lanco Infratech Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Bulk Trading Sa - Switzerland
- Directorate Of Revenue Intelligence - India
- Sindya Power Generating Company Private Ltd
- Trasteel International SA, Italy
- New Zealand Coal & Carbon
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
- CNBM International Corporation - China
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Indika Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Georgia Ports Authority, United States
- Kapuas Tunggal Persada - Indonesia
- Salva Resources Pvt Ltd - India
- Medco Energi Mining Internasional
- TNB Fuel Sdn Bhd - Malaysia
- Iligan Light & Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
- Wood Mackenzie - Singapore
- Malabar Cements Ltd - India
- Australian Coal Association
- Parliament of New Zealand
- Tata Chemicals Ltd - India
- Indian Oil Corporation Limited
- GVK Power & Infra Limited - India
- Banpu Public Company Limited - Thailand
- Timah Investasi Mineral - Indoneisa
- Merrill Lynch Commodities Europe
- Globalindo Alam Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indogreen Group - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- South Luzon Thermal Energy Corporation
- The Treasury - Australian Government
- Mercuria Energy - Indonesia
- India Bulls Power Limited - India
- Jindal Steel & Power Ltd - India
- Xindia Steels Limited - India
- MS Steel International - UAE
- OPG Power Generation Pvt Ltd - India
- Singapore Mercantile Exchange
- Grasim Industreis Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Intertek Mineral Services - Indonesia
- GMR Energy Limited - India
- Baramulti Group, Indonesia
- Deloitte Consulting - India
- Borneo Indobara - Indonesia
- Eastern Energy - Thailand
- Siam City Cement PLC, Thailand
- Latin American Coal - Colombia
- Orica Australia Pty. Ltd.
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- IEA Clean Coal Centre - UK
- Renaissance Capital - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Madhucon Powers Ltd - India
- PTC India Limited - India
- Chamber of Mines of South Africa
- Central Java Power - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- Meralco Power Generation, Philippines
- Edison Trading Spa - Italy
- Energy Link Ltd, New Zealand
- Bhatia International Limited - India
- CIMB Investment Bank - Malaysia
- Power Finance Corporation Ltd., India
- Interocean Group of Companies - India
- Port Waratah Coal Services - Australia
- Attock Cement Pakistan Limited
- Australian Commodity Traders Exchange
- Kartika Selabumi Mining - Indonesia
- Indian Energy Exchange, India
- Mercator Lines Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhushan Steel Limited - India
- Oldendorff Carriers - Singapore
- Price Waterhouse Coopers - Russia
- Sical Logistics Limited - India
- Bangladesh Power Developement Board
- Aboitiz Power Corporation - Philippines
- TeaM Sual Corporation - Philippines
- SMG Consultants - Indonesia
- Anglo American - United Kingdom
- Mintek Dendrill Indonesia
- Larsen & Toubro Limited - India
- Posco Energy - South Korea
- London Commodity Brokers - England
- Indo Tambangraya Megah - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Electricity Generating Authority of Thailand
- Savvy Resources Ltd - HongKong
- The University of Queensland
- Global Coal Blending Company Limited - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Planning Commission, India
- Global Business Power Corporation, Philippines
- Rio Tinto Coal - Australia
- San Jose City I Power Corp, Philippines
- Minerals Council of Australia
- Krishnapatnam Port Company Ltd. - India
- VISA Power Limited - India
- McConnell Dowell - Australia
- Dalmia Cement Bharat India
- ICICI Bank Limited - India
- Altura Mining Limited, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karaikal Port Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- IHS Mccloskey Coal Group - USA
- Vijayanagar Sugar Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Meenaskhi Energy Private Limited - India
- Thai Mozambique Logistica
- Kobexindo Tractors - Indoneisa
- Barasentosa Lestari - Indonesia
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