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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, 26 January 23
AUSTRALIA'S CORONADO GLOBAL SEES COAL PRICES RISING ON RESUMING CHINA IMPORTS - REUTERS
Australia’s Coronado Global Resources said on Tuesday resuming metallurgical coal imports to China would likely push sea-borne coal prices hi ...
Monday, 23 January 23
CHINA'S MAJOR COAL-PRODUCING PROVINCE ACCELERATES DIGITAL TRANSFORMATION - XINHUA
At Chindata Group’s big-data industrial park in Lingqiu County of Datong City, hundreds of thousands of servers are running round-the-clock t ...
Monday, 23 January 23
CHINA'S COAL-RICH PROVINCE SEES COAL PRODUCTION INCREASE IN 2022 - XINHUA
North China’s coal-rich province of Shanxi saw its coal production hit 1.31 billion tonnes in 2022, up 8.7 percent year on year, local author ...
Wednesday, 18 January 23
MARKET INSIGHT - INTERMODAL
From Feb 5, another price cap will be introduced to Russian fuels and oil products, adding to the one for crude oil, already in place from Dec. 3. ...
Tuesday, 17 January 23
FRAUD IS THE BIGGEST THREAT TO CARGO LOSSES - TT CLUB
The almost exclusive use of online facilities to process business transactions allows a myriad of fraudulent pursuits to find opportunities within ...
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- GMR Energy Limited - India
- Sinarmas Energy and Mining - Indonesia
- Indika Energy - Indonesia
- Formosa Plastics Group - Taiwan
- PetroVietnam Power Coal Import and Supply Company
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Goldman Sachs - Singapore
- McConnell Dowell - Australia
- Semirara Mining Corp, Philippines
- Riau Bara Harum - Indonesia
- Global Green Power PLC Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- PowerSource Philippines DevCo
- Renaissance Capital - South Africa
- Posco Energy - South Korea
- Orica Australia Pty. Ltd.
- Semirara Mining and Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Sindya Power Generating Company Private Ltd
- Planning Commission, India
- Anglo American - United Kingdom
- Commonwealth Bank - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Authority, New Zealand
- Jaiprakash Power Ventures ltd
- PTC India Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Meenaskhi Energy Private Limited - India
- Carbofer General Trading SA - India
- Gujarat Sidhee Cement - India
- Bahari Cakrawala Sebuku - Indonesia
- New Zealand Coal & Carbon
- Siam City Cement - Thailand
- TeaM Sual Corporation - Philippines
- Edison Trading Spa - Italy
- Savvy Resources Ltd - HongKong
- Sree Jayajothi Cements Limited - India
- Wilmar Investment Holdings
- VISA Power Limited - India
- Price Waterhouse Coopers - Russia
- Bhushan Steel Limited - India
- Coal and Oil Company - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Parry Sugars Refinery, India
- Bukit Makmur.PT - Indonesia
- Sojitz Corporation - Japan
- Bulk Trading Sa - Switzerland
- Kartika Selabumi Mining - Indonesia
- ASAPP Information Group - India
- Bhoruka Overseas - Indonesia
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- Chettinad Cement Corporation Ltd - India
- Global Coal Blending Company Limited - Australia
- Vedanta Resources Plc - India
- Bangladesh Power Developement Board
- Global Business Power Corporation, Philippines
- ICICI Bank Limited - India
- CNBM International Corporation - China
- Samtan Co., Ltd - South Korea
- Latin American Coal - Colombia
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Bayan Resources Tbk. - Indonesia
- Salva Resources Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- Energy Link Ltd, New Zealand
- Borneo Indobara - Indonesia
- European Bulk Services B.V. - Netherlands
- Manunggal Multi Energi - Indonesia
- Oldendorff Carriers - Singapore
- Kaltim Prima Coal - Indonesia
- Africa Commodities Group - South Africa
- Directorate Of Revenue Intelligence - India
- Minerals Council of Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tamil Nadu electricity Board
- Star Paper Mills Limited - India
- Malabar Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Indian Oil Corporation Limited
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- Bharathi Cement Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mintek Dendrill Indonesia
- Ambuja Cements Ltd - India
- Videocon Industries ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jindal Steel & Power Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petron Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Neyveli Lignite Corporation Ltd, - India
- Petrochimia International Co. Ltd.- Taiwan
- Sical Logistics Limited - India
- Mjunction Services Limited - India
- Cigading International Bulk Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Karaikal Port Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Power Finance Corporation Ltd., India
- Mercator Lines Limited - India
- SMG Consultants - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Ministry of Mines - Canada
- CIMB Investment Bank - Malaysia
- Trasteel International SA, Italy
- PNOC Exploration Corporation - Philippines
- Energy Development Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Port Waratah Coal Services - Australia
- Gujarat Mineral Development Corp Ltd - India
- Standard Chartered Bank - UAE
- Marubeni Corporation - India
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Meralco Power Generation, Philippines
- Iligan Light & Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Interocean Group of Companies - India
- Ministry of Transport, Egypt
- Bhatia International Limited - India
- Mercuria Energy - Indonesia
- Indonesian Coal Mining Association
- Bukit Baiduri Energy - Indonesia
- Thai Mozambique Logistica
- Xindia Steels Limited - India
- Deloitte Consulting - India
- Larsen & Toubro Limited - India
- San Jose City I Power Corp, Philippines
- Indogreen Group - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Tata Chemicals Ltd - India
- Singapore Mercantile Exchange
- South Luzon Thermal Energy Corporation
- Siam City Cement PLC, Thailand
- Therma Luzon, Inc, Philippines
- The University of Queensland
- Essar Steel Hazira Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Simpson Spence & Young - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Central Java Power - Indonesia
- Eastern Energy - Thailand
- London Commodity Brokers - England
- Pendopo Energi Batubara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Kumho Petrochemical, South Korea
- Ministry of Finance - Indonesia
- Antam Resourcindo - Indonesia
- Australian Coal Association
- Australian Commodity Traders Exchange
- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Thiess Contractors Indonesia
- SN Aboitiz Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IEA Clean Coal Centre - UK
- Straits Asia Resources Limited - Singapore
- Ceylon Electricity Board - Sri Lanka
- Rashtriya Ispat Nigam Limited - India
- White Energy Company Limited
- Wood Mackenzie - Singapore
- Sarangani Energy Corporation, Philippines
- The State Trading Corporation of India Ltd
- Economic Council, Georgia
- Toyota Tsusho Corporation, Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coalindo Energy - Indonesia
- Agrawal Coal Company - India
- Dalmia Cement Bharat India
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- Central Electricity Authority - India
- Kapuas Tunggal Persada - Indonesia
- Coastal Gujarat Power Limited - India
- Chamber of Mines of South Africa
- GVK Power & Infra Limited - India
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- Sakthi Sugars Limited - India
- Eastern Coal Council - USA
- Holcim Trading Pte Ltd - Singapore
- Aditya Birla Group - India
- Cement Manufacturers Association - India
- Billiton Holdings Pty Ltd - Australia
- Romanian Commodities Exchange
- SMC Global Power, Philippines
- Kobexindo Tractors - Indoneisa
- Binh Thuan Hamico - Vietnam
- Grasim Industreis Ltd - India
- Medco Energi Mining Internasional
- Attock Cement Pakistan Limited
- Indian Energy Exchange, India
- Ind-Barath Power Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Makarim & Taira - Indonesia
- Asmin Koalindo Tuhup - Indonesia
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