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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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- Merrill Lynch Commodities Europe
- Meralco Power Generation, Philippines
- Independent Power Producers Association of India
- Billiton Holdings Pty Ltd - Australia
- Parliament of New Zealand
- Ceylon Electricity Board - Sri Lanka
- Kideco Jaya Agung - Indonesia
- Gujarat Sidhee Cement - India
- Bukit Baiduri Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Intertek Mineral Services - Indonesia
- Videocon Industries ltd - India
- CNBM International Corporation - China
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Energy Link Ltd, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Singapore Mercantile Exchange
- Georgia Ports Authority, United States
- Gujarat Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Kumho Petrochemical, South Korea
- Bhushan Steel Limited - India
- Kartika Selabumi Mining - Indonesia
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
- Kobexindo Tractors - Indoneisa
- Metalloyd Limited - United Kingdom
- Eastern Coal Council - USA
- Uttam Galva Steels Limited - India
- Tamil Nadu electricity Board
- Holcim Trading Pte Ltd - Singapore
- IHS Mccloskey Coal Group - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- International Coal Ventures Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Electricity Authority, New Zealand
- Chettinad Cement Corporation Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aboitiz Power Corporation - Philippines
- Port Waratah Coal Services - Australia
- Bhoruka Overseas - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Global Business Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indogreen Group - Indonesia
- IEA Clean Coal Centre - UK
- Sakthi Sugars Limited - India
- Oldendorff Carriers - Singapore
- Indian Energy Exchange, India
- Banpu Public Company Limited - Thailand
- Xindia Steels Limited - India
- Therma Luzon, Inc, Philippines
- Directorate Of Revenue Intelligence - India
- GN Power Mariveles Coal Plant, Philippines
- Simpson Spence & Young - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Agrawal Coal Company - India
- Kapuas Tunggal Persada - Indonesia
- Electricity Generating Authority of Thailand
- Salva Resources Pvt Ltd - India
- Posco Energy - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Global Green Power PLC Corporation, Philippines
- ASAPP Information Group - India
- Kohat Cement Company Ltd. - Pakistan
- Kaltim Prima Coal - Indonesia
- Wood Mackenzie - Singapore
- Indonesian Coal Mining Association
- Essar Steel Hazira Ltd - India
- Cement Manufacturers Association - India
- Australian Commodity Traders Exchange
- Directorate General of MIneral and Coal - Indonesia
- Jindal Steel & Power Ltd - India
- Sindya Power Generating Company Private Ltd
- Central Java Power - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement - Thailand
- The University of Queensland
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- PNOC Exploration Corporation - Philippines
- ICICI Bank Limited - India
- McConnell Dowell - Australia
- Petron Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Development Corp, Philippines
- Orica Mining Services - Indonesia
- South Luzon Thermal Energy Corporation
- Riau Bara Harum - Indonesia
- Mintek Dendrill Indonesia
- Rashtriya Ispat Nigam Limited - India
- LBH Netherlands Bv - Netherlands
- Meenaskhi Energy Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Trasteel International SA, Italy
- Coalindo Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Madhucon Powers Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Vedanta Resources Plc - India
- Krishnapatnam Port Company Ltd. - India
- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Star Paper Mills Limited - India
- GVK Power & Infra Limited - India
- Standard Chartered Bank - UAE
- Heidelberg Cement - Germany
- Kepco SPC Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jaiprakash Power Ventures ltd
- Globalindo Alam Lestari - Indonesia
- Bharathi Cement Corporation - India
- Edison Trading Spa - Italy
- Pendopo Energi Batubara - Indonesia
- Minerals Council of Australia
- Alfred C Toepfer International GmbH - Germany
- Coastal Gujarat Power Limited - India
- India Bulls Power Limited - India
- Wilmar Investment Holdings
- Anglo American - United Kingdom
- Australian Coal Association
- Africa Commodities Group - South Africa
- Ind-Barath Power Infra Limited - India
- Carbofer General Trading SA - India
- Baramulti Group, Indonesia
- MS Steel International - UAE
- Interocean Group of Companies - India
- Barasentosa Lestari - Indonesia
- SMC Global Power, Philippines
- European Bulk Services B.V. - Netherlands
- Makarim & Taira - Indonesia
- Mercuria Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Attock Cement Pakistan Limited
- Vizag Seaport Private Limited - India
- Siam City Cement PLC, Thailand
- Antam Resourcindo - Indonesia
- Price Waterhouse Coopers - Russia
- Altura Mining Limited, Indonesia
- Thai Mozambique Logistica
- Pipit Mutiara Jaya. PT, Indonesia
- SMG Consultants - Indonesia
- The Treasury - Australian Government
- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- Ambuja Cements Ltd - India
- Sojitz Corporation - Japan
- Deloitte Consulting - India
- GAC Shipping (India) Pvt Ltd
- Bulk Trading Sa - Switzerland
- White Energy Company Limited
- Latin American Coal - Colombia
- Marubeni Corporation - India
- Medco Energi Mining Internasional
- VISA Power Limited - India
- Malabar Cements Ltd - India
- Dalmia Cement Bharat India
- Sree Jayajothi Cements Limited - India
- Iligan Light & Power Inc, Philippines
- Ministry of Transport, Egypt
- Commonwealth Bank - Australia
- New Zealand Coal & Carbon
- Lanco Infratech Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Planning Commission, India
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Eastern Energy - Thailand
- Samtan Co., Ltd - South Korea
- Semirara Mining and Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- OPG Power Generation Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- Indo Tambangraya Megah - Indonesia
- The State Trading Corporation of India Ltd
- Romanian Commodities Exchange
- GMR Energy Limited - India
- PowerSource Philippines DevCo
- Bahari Cakrawala Sebuku - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Rio Tinto Coal - Australia
- Sical Logistics Limited - India
- Economic Council, Georgia
- Bangladesh Power Developement Board
- PTC India Limited - India
- Aditya Birla Group - India
- Borneo Indobara - Indonesia
- Indian Oil Corporation Limited
- Ministry of Finance - Indonesia
- Central Electricity Authority - India
- Tata Chemicals Ltd - India
- Indika Energy - Indonesia
- Larsen & Toubro Limited - India
- Miang Besar Coal Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Formosa Plastics Group - Taiwan
- Bhatia International Limited - India
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