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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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Sunday, 26 February 23
MAWANI AND JEDDAH CHAMBER SIGN AN AGREEMENT TO BUILD INTEGRATED LOGISTICS PARK
Press Release: The Saudi Ports Authority (Mawani) and Jeddah Chamber of Commerce and Industry have today inked an agreement to set up an integrated ...
Saturday, 25 February 23
INDONESIA IS STILL BY FAR THE TOP SUPPLIER OF COAL TO CHINA - BANCHERO COSTA
After a slow start in the first quarter, global coal trade has really picked up pace last year, and is now fully back to pre-Covid levels, said ban ...
Wednesday, 22 February 23
MARKET INSIGHT - INTERMODAL
The short-term outlook of the global soybean market is currently pivoted by a combination of weather patterns that are affecting the harvest progre ...
Saturday, 18 February 23
OIL UNLIKELY TO BREAK ABOVE $100/BBL THIS YEAR, J.P.MORGAN SAYS –- REUTERS
Brent oil prices are unlikely to breach the $100 a barrel level this year, barring any significant geopolitical drivers, with OPEC+ potentially add ...
Saturday, 18 February 23
CHINA'S COAL PRICES FALL TO 1 YR-LOW, CLOUDING DEMAND AND IMPORT OUTLOOK - REUTERS
China’s thermal coal prices hit their lowest levels in a year this week on rising inventories as domestic mine production is recovering faste ...
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- Kobexindo Tractors - Indoneisa
- Karaikal Port Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Antam Resourcindo - Indonesia
- Semirara Mining Corp, Philippines
- Gujarat Sidhee Cement - India
- ICICI Bank Limited - India
- Ambuja Cements Ltd - India
- Australian Commodity Traders Exchange
- Oldendorff Carriers - Singapore
- Kideco Jaya Agung - Indonesia
- Uttam Galva Steels Limited - India
- Xindia Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Chamber of Mines of South Africa
- Vizag Seaport Private Limited - India
- Aditya Birla Group - India
- Energy Link Ltd, New Zealand
- Central Java Power - Indonesia
- Vedanta Resources Plc - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Karbindo Abesyapradhi - Indoneisa
- Grasim Industreis Ltd - India
- ASAPP Information Group - India
- Tamil Nadu electricity Board
- Savvy Resources Ltd - HongKong
- Bulk Trading Sa - Switzerland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhoruka Overseas - Indonesia
- Anglo American - United Kingdom
- Agrawal Coal Company - India
- Meenaskhi Energy Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Orica Mining Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Posco Energy - South Korea
- Standard Chartered Bank - UAE
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- Independent Power Producers Association of India
- Bharathi Cement Corporation - India
- Ceylon Electricity Board - Sri Lanka
- GAC Shipping (India) Pvt Ltd
- Maheswari Brothers Coal Limited - India
- Energy Development Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Kepco SPC Power Corporation, Philippines
- CNBM International Corporation - China
- Coalindo Energy - Indonesia
- Interocean Group of Companies - India
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Mercator Lines Limited - India
- Jorong Barutama Greston.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Videocon Industries ltd - India
- Miang Besar Coal Terminal - Indonesia
- Central Electricity Authority - India
- Larsen & Toubro Limited - India
- Romanian Commodities Exchange
- Sojitz Corporation - Japan
- The University of Queensland
- Formosa Plastics Group - Taiwan
- Kumho Petrochemical, South Korea
- Trasteel International SA, Italy
- Essar Steel Hazira Ltd - India
- The State Trading Corporation of India Ltd
- Bukit Baiduri Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Bangladesh Power Developement Board
- Kapuas Tunggal Persada - Indonesia
- San Jose City I Power Corp, Philippines
- Bhatia International Limited - India
- Latin American Coal - Colombia
- Maharashtra Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- Eastern Coal Council - USA
- Pipit Mutiara Jaya. PT, Indonesia
- GMR Energy Limited - India
- Marubeni Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- Wood Mackenzie - Singapore
- OPG Power Generation Pvt Ltd - India
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Singapore Mercantile Exchange
- MS Steel International - UAE
- Electricity Authority, New Zealand
- Manunggal Multi Energi - Indonesia
- Edison Trading Spa - Italy
- Petrochimia International Co. Ltd.- Taiwan
- Krishnapatnam Port Company Ltd. - India
- Vijayanagar Sugar Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Thai Mozambique Logistica
- New Zealand Coal & Carbon
- Dalmia Cement Bharat India
- Minerals Council of Australia
- PNOC Exploration Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Billiton Holdings Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- Kartika Selabumi Mining - Indonesia
- Indian Oil Corporation Limited
- Siam City Cement - Thailand
- CIMB Investment Bank - Malaysia
- White Energy Company Limited
- South Luzon Thermal Energy Corporation
- LBH Netherlands Bv - Netherlands
- Salva Resources Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- PowerSource Philippines DevCo
- Mjunction Services Limited - India
- Pendopo Energi Batubara - Indonesia
- Commonwealth Bank - Australia
- Kaltim Prima Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Riau Bara Harum - Indonesia
- Jindal Steel & Power Ltd - India
- SMC Global Power, Philippines
- Electricity Generating Authority of Thailand
- Sakthi Sugars Limited - India
- Ind-Barath Power Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Simpson Spence & Young - Indonesia
- Petron Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Mintek Dendrill Indonesia
- Binh Thuan Hamico - Vietnam
- Global Coal Blending Company Limited - Australia
- TeaM Sual Corporation - Philippines
- Parliament of New Zealand
- Barasentosa Lestari - Indonesia
- Lanco Infratech Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Deloitte Consulting - India
- Heidelberg Cement - Germany
- Sarangani Energy Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Planning Commission, India
- Renaissance Capital - South Africa
- Bhushan Steel Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Coal and Oil Company - UAE
- Merrill Lynch Commodities Europe
- Indika Energy - Indonesia
- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- Economic Council, Georgia
- Gujarat Mineral Development Corp Ltd - India
- Mercuria Energy - Indonesia
- IEA Clean Coal Centre - UK
- Power Finance Corporation Ltd., India
- Indian Energy Exchange, India
- Malabar Cements Ltd - India
- Eastern Energy - Thailand
- Parry Sugars Refinery, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Toyota Tsusho Corporation, Japan
- Attock Cement Pakistan Limited
- Cement Manufacturers Association - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tata Chemicals Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Ministry of Transport, Egypt
- GN Power Mariveles Coal Plant, Philippines
- Orica Australia Pty. Ltd.
- Global Green Power PLC Corporation, Philippines
- Rio Tinto Coal - Australia
- Altura Mining Limited, Indonesia
- Sical Logistics Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- Aboitiz Power Corporation - Philippines
- Meralco Power Generation, Philippines
- Indogreen Group - Indonesia
- Thiess Contractors Indonesia
- Gujarat Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- The Treasury - Australian Government
- Australian Coal Association
- Port Waratah Coal Services - Australia
- India Bulls Power Limited - India
- Makarim & Taira - Indonesia
- Globalindo Alam Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Africa Commodities Group - South Africa
- London Commodity Brokers - England
- Price Waterhouse Coopers - Russia
- Ministry of Mines - Canada
- PTC India Limited - India
- Ministry of Finance - Indonesia
- GVK Power & Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Georgia Ports Authority, United States
- Goldman Sachs - Singapore
- Rashtriya Ispat Nigam Limited - India
- Madhucon Powers Ltd - India
- VISA Power Limited - India
- IHS Mccloskey Coal Group - USA
- Star Paper Mills Limited - India
- Baramulti Group, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Metalloyd Limited - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- Siam City Cement PLC, Thailand
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