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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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Friday, 02 November 18
COAL FETCHES 102% PREMIUM IN E-AUCTION, SURPASSING THE EARLIER HIGHEST OF 95% - FINANCIAL EXPRESS
Coal prices have received a premium of 102% in spot e-auction during September 2018, surpassing the earlier highest of 95% premium during the spot ...
Friday, 02 November 18
CHINA: COAL CONSUMPTION POSTS STRONG GROWTH ON BACK OF POWER GENERATION DEMAND - CHINA DAILY
China’s energy consumption experienced continuous rebound during the first three quarters in 2018, National Energy Administration announced o ...
Thursday, 01 November 18
IMO 2020 - EXPLORING THE OPTION OF SOX SCRUBBERS - SIDDHARTH MAHAJAN, GARD
KNOWLEDGE TO ELEVATE
There are four possible methods of compliance:
1.use VLSFO (very low Sulphur oil) or blends;
2,use dis ...
Wednesday, 31 October 18
INDIA: COAL IMPORTS SURGE ON DOMESTIC SHORT SUPPLY - HINDU
Shortage of thermal coal supply in India has pushed imports up to 85 million tonnes (mt) in the first half of the current fiscal compared to 75 mt ...
Wednesday, 31 October 18
SHIPPING MARKET INSIGHT - APOSTOLOS ROMPOPOULOS
Since the IMO’s 2020 global cap on sulphur in marine fuels is coming into force, ship-owners have to decide whether they will operate using e ...
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- Jaiprakash Power Ventures ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sindya Power Generating Company Private Ltd
- Iligan Light & Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Carbofer General Trading SA - India
- The Treasury - Australian Government
- Semirara Mining Corp, Philippines
- PTC India Limited - India
- Tata Chemicals Ltd - India
- Aditya Birla Group - India
- Karbindo Abesyapradhi - Indoneisa
- IHS Mccloskey Coal Group - USA
- Sree Jayajothi Cements Limited - India
- Orica Mining Services - Indonesia
- McConnell Dowell - Australia
- Agrawal Coal Company - India
- London Commodity Brokers - England
- GN Power Mariveles Coal Plant, Philippines
- Makarim & Taira - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sical Logistics Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thai Mozambique Logistica
- Posco Energy - South Korea
- Formosa Plastics Group - Taiwan
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- Kaltim Prima Coal - Indonesia
- Eastern Coal Council - USA
- Sojitz Corporation - Japan
- Romanian Commodities Exchange
- Medco Energi Mining Internasional
- Vizag Seaport Private Limited - India
- Wood Mackenzie - Singapore
- Goldman Sachs - Singapore
- Star Paper Mills Limited - India
- Commonwealth Bank - Australia
- AsiaOL BioFuels Corp., Philippines
- Cement Manufacturers Association - India
- Trasteel International SA, Italy
- Africa Commodities Group - South Africa
- Mercator Lines Limited - India
- Kumho Petrochemical, South Korea
- Videocon Industries ltd - India
- Therma Luzon, Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement PLC, Thailand
- European Bulk Services B.V. - Netherlands
- Directorate Of Revenue Intelligence - India
- Vijayanagar Sugar Pvt Ltd - India
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Mjunction Services Limited - India
- Holcim Trading Pte Ltd - Singapore
- Latin American Coal - Colombia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- India Bulls Power Limited - India
- Parry Sugars Refinery, India
- Madhucon Powers Ltd - India
- TeaM Sual Corporation - Philippines
- Uttam Galva Steels Limited - India
- Port Waratah Coal Services - Australia
- Binh Thuan Hamico - Vietnam
- Borneo Indobara - Indonesia
- Coastal Gujarat Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Deloitte Consulting - India
- ASAPP Information Group - India
- Electricity Generating Authority of Thailand
- ICICI Bank Limited - India
- SN Aboitiz Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Simpson Spence & Young - Indonesia
- Pendopo Energi Batubara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Miang Besar Coal Terminal - Indonesia
- New Zealand Coal & Carbon
- Baramulti Group, Indonesia
- Tamil Nadu electricity Board
- Meralco Power Generation, Philippines
- Sarangani Energy Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Bhushan Steel Limited - India
- Power Finance Corporation Ltd., India
- Edison Trading Spa - Italy
- Siam City Cement - Thailand
- Ceylon Electricity Board - Sri Lanka
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- MS Steel International - UAE
- Australian Coal Association
- Savvy Resources Ltd - HongKong
- SMG Consultants - Indonesia
- Altura Mining Limited, Indonesia
- Minerals Council of Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Essar Steel Hazira Ltd - India
- Kobexindo Tractors - Indoneisa
- SMC Global Power, Philippines
- Bukit Baiduri Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Timah Investasi Mineral - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Georgia Ports Authority, United States
- Bukit Asam (Persero) Tbk - Indonesia
- Indika Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Independent Power Producers Association of India
- GMR Energy Limited - India
- Chamber of Mines of South Africa
- Anglo American - United Kingdom
- Interocean Group of Companies - India
- Straits Asia Resources Limited - Singapore
- Standard Chartered Bank - UAE
- Singapore Mercantile Exchange
- Indian Energy Exchange, India
- Kideco Jaya Agung - Indonesia
- CIMB Investment Bank - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Sakthi Sugars Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Electricity Authority, New Zealand
- Eastern Energy - Thailand
- International Coal Ventures Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- CNBM International Corporation - China
- Ministry of Finance - Indonesia
- Price Waterhouse Coopers - Russia
- Malabar Cements Ltd - India
- Petron Corporation, Philippines
- Indian Oil Corporation Limited
- Aboitiz Power Corporation - Philippines
- Energy Link Ltd, New Zealand
- Billiton Holdings Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Global Business Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Manunggal Multi Energi - Indonesia
- Banpu Public Company Limited - Thailand
- Maheswari Brothers Coal Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Kapuas Tunggal Persada - Indonesia
- Global Coal Blending Company Limited - Australia
- PNOC Exploration Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Xindia Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Ministry of Transport, Egypt
- Indonesian Coal Mining Association
- The University of Queensland
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Central Electricity Authority - India
- Mercuria Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bhatia International Limited - India
- Bukit Makmur.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- White Energy Company Limited
- PowerSource Philippines DevCo
- Rio Tinto Coal - Australia
- Central Java Power - Indonesia
- Ambuja Cements Ltd - India
- Mintek Dendrill Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Marubeni Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- VISA Power Limited - India
- Coalindo Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Energy Development Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Planning Commission, India
- Dalmia Cement Bharat India
- Attock Cement Pakistan Limited
- Kepco SPC Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Vedanta Resources Plc - India
- Gujarat Sidhee Cement - India
- Bangladesh Power Developement Board
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- Ind-Barath Power Infra Limited - India
- Bulk Trading Sa - Switzerland
- IEA Clean Coal Centre - UK
- Economic Council, Georgia
- Gujarat Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Riau Bara Harum - Indonesia
- Thiess Contractors Indonesia
- Wilmar Investment Holdings
- Merrill Lynch Commodities Europe
- Oldendorff Carriers - Singapore
- Bhoruka Overseas - Indonesia
- Larsen & Toubro Limited - India
- Antam Resourcindo - Indonesia
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Indogreen Group - Indonesia
- Orica Australia Pty. Ltd.
- Indo Tambangraya Megah - Indonesia
- Ministry of Mines - Canada
- Jindal Steel & Power Ltd - India
- San Jose City I Power Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Coal and Oil Company - UAE
- Heidelberg Cement - Germany
- Bayan Resources Tbk. - Indonesia
- Barasentosa Lestari - Indonesia
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