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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, 15 October 19
INDIA READIES POLICY TO ATTRACT FOREIGN INVESTMENT IN COAL MINING - REUTERS
India expects to have formulated a policy within the next two weeks to attract foreign investment to its coal mining industry, the country's Co ...
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WINTER OIL MARKET OUTLOOK - OPEC
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INDONESIA: PANAMAX VESSELS OPEN SOUTH CHINA WERE REPORTEDLY FIXED AT $14,000 LEVEL, WITH REDELIVERY BACK IN CHINA - BALTIC BRIEFING
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Friday, 11 October 19
INDIAN MINERS REJECT PLAN TO LINK NATIONAL COAL INDEX TO FOREIGN PRICES - REUTERS
India’s miners are rejecting a government proposal to establish a national coal index that would be linked to international prices, documents ...
Friday, 11 October 19
THE OCTOBER BENCHMARK PRICE OF INDONESIAN THERMAL COAL DECLINES TO LOWEST SINCE OCTOBER 2016
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
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- Coalindo Energy - Indonesia
- Georgia Ports Authority, United States
- Ambuja Cements Ltd - India
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- Samtan Co., Ltd - South Korea
- Bharathi Cement Corporation - India
- Chettinad Cement Corporation Ltd - India
- Kepco SPC Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Australian Commodity Traders Exchange
- Coastal Gujarat Power Limited - India
- Binh Thuan Hamico - Vietnam
- Thiess Contractors Indonesia
- Sical Logistics Limited - India
- Electricity Generating Authority of Thailand
- Iligan Light & Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Vedanta Resources Plc - India
- Bhatia International Limited - India
- Attock Cement Pakistan Limited
- Lanco Infratech Ltd - India
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
- Oldendorff Carriers - Singapore
- SN Aboitiz Power Inc, Philippines
- Independent Power Producers Association of India
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- Energy Development Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Riau Bara Harum - Indonesia
- Global Green Power PLC Corporation, Philippines
- Salva Resources Pvt Ltd - India
- GMR Energy Limited - India
- Intertek Mineral Services - Indonesia
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- Manunggal Multi Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Meenaskhi Energy Private Limited - India
- PNOC Exploration Corporation - Philippines
- Minerals Council of Australia
- Billiton Holdings Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Metalloyd Limited - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- The Treasury - Australian Government
- TNB Fuel Sdn Bhd - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kartika Selabumi Mining - Indonesia
- Siam City Cement PLC, Thailand
- ASAPP Information Group - India
- Larsen & Toubro Limited - India
- Semirara Mining Corp, Philippines
- Chamber of Mines of South Africa
- Edison Trading Spa - Italy
- Uttam Galva Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Grasim Industreis Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Leighton Contractors Pty Ltd - Australia
- Indogreen Group - Indonesia
- Bangladesh Power Developement Board
- Rio Tinto Coal - Australia
- Orica Mining Services - Indonesia
- Kobexindo Tractors - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Malabar Cements Ltd - India
- Carbofer General Trading SA - India
- Marubeni Corporation - India
- Coal and Oil Company - UAE
- Sree Jayajothi Cements Limited - India
- Planning Commission, India
- Therma Luzon, Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Bhoruka Overseas - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- London Commodity Brokers - England
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- Makarim & Taira - Indonesia
- Heidelberg Cement - Germany
- Kumho Petrochemical, South Korea
- Price Waterhouse Coopers - Russia
- OPG Power Generation Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Kalimantan Lumbung Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Gujarat Sidhee Cement - India
- SMG Consultants - Indonesia
- Central Java Power - Indonesia
- Essar Steel Hazira Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Borneo Indobara - Indonesia
- Renaissance Capital - South Africa
- Semirara Mining and Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- VISA Power Limited - India
- Indonesian Coal Mining Association
- Savvy Resources Ltd - HongKong
- Commonwealth Bank - Australia
- Latin American Coal - Colombia
- Krishnapatnam Port Company Ltd. - India
- Jindal Steel & Power Ltd - India
- New Zealand Coal & Carbon
- Simpson Spence & Young - Indonesia
- Bhushan Steel Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Tamil Nadu electricity Board
- India Bulls Power Limited - India
- Videocon Industries ltd - India
- Alfred C Toepfer International GmbH - Germany
- Mjunction Services Limited - India
- Ceylon Electricity Board - Sri Lanka
- Directorate Of Revenue Intelligence - India
- Globalindo Alam Lestari - Indonesia
- Deloitte Consulting - India
- Thai Mozambique Logistica
- Trasteel International SA, Italy
- Anglo American - United Kingdom
- Ministry of Finance - Indonesia
- GVK Power & Infra Limited - India
- Eastern Coal Council - USA
- Kaltim Prima Coal - Indonesia
- CNBM International Corporation - China
- Aboitiz Power Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Dalmia Cement Bharat India
- Neyveli Lignite Corporation Ltd, - India
- The State Trading Corporation of India Ltd
- Mercuria Energy - Indonesia
- Standard Chartered Bank - UAE
- Gujarat Mineral Development Corp Ltd - India
- Bukit Baiduri Energy - Indonesia
- White Energy Company Limited
- PTC India Limited - India
- Xindia Steels Limited - India
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- Formosa Plastics Group - Taiwan
- Global Coal Blending Company Limited - Australia
- ICICI Bank Limited - India
- Wood Mackenzie - Singapore
- McConnell Dowell - Australia
- Parliament of New Zealand
- Tata Chemicals Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Indian Oil Corporation Limited
- Mercator Lines Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Australian Coal Association
- CIMB Investment Bank - Malaysia
- Indika Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Agrawal Coal Company - India
- Global Business Power Corporation, Philippines
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- Asmin Koalindo Tuhup - Indonesia
- Port Waratah Coal Services - Australia
- Kohat Cement Company Ltd. - Pakistan
- Petron Corporation, Philippines
- Sojitz Corporation - Japan
- Posco Energy - South Korea
- Star Paper Mills Limited - India
- Eastern Energy - Thailand
- Energy Link Ltd, New Zealand
- San Jose City I Power Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Singapore Mercantile Exchange
- Holcim Trading Pte Ltd - Singapore
- Madhucon Powers Ltd - India
- MS Steel International - UAE
- Romanian Commodities Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- European Bulk Services B.V. - Netherlands
- Bulk Trading Sa - Switzerland
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- Maheswari Brothers Coal Limited - India
- Vizag Seaport Private Limited - India
- Barasentosa Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Central Electricity Authority - India
- Goldman Sachs - Singapore
- Siam City Cement - Thailand
- Wilmar Investment Holdings
- IEA Clean Coal Centre - UK
- International Coal Ventures Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Parry Sugars Refinery, India
- Directorate General of MIneral and Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Africa Commodities Group - South Africa
- The University of Queensland
- Merrill Lynch Commodities Europe
- Interocean Group of Companies - India
- Meralco Power Generation, Philippines
- Karaikal Port Pvt Ltd - India
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