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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, 18 November 22
REALITIES OF LOI LIABILITIES - BALTIC EXCHANGE
KNOWLEDGE TO ELEVATE
The cargo misdelivery claim in Trafigura Maritime Logistics Pte Ltd v. Clearlake Shipping Pte Ltd (Miracle Hope) [2022] E ...
Tuesday, 15 November 22
CHINA SEES RISING COAL STORAGE AMID SUPPLY PUSH - XINHUA
Coal stockpiles at China’s power plants have seen considerable increases, ensuring energy supply for the winter, the country’s energy r ...
Tuesday, 15 November 22
SEABORNE THERMAL COAL PRICES START TO EASE, BUT PROCESS IS UNEVEN - REUTERS
Prices for seaborne thermal coal have started to drop as fears of a winter energy crunch ease, but the rate of decline has varied across the differ ...
Thursday, 10 November 22
INDIA: THERMAL PLANTS HAVE ADEQUATE COAL STOCKS AT 25.6 MILLION TONNES, SAYS GOVT - IANS
The coal stock with domestic dry fuel-based power plants, as on October 31, was 25.6 million tonnes, the government said, adding that the availabil ...
Tuesday, 08 November 22
OUTLOOK ON CHINA’S WEAKENED BASIC MATERIALS SECTOR CLOUDED BY POLICY SWINGS - FITCH RATINGS
Fitch Ratings expects basic materials demand in China to improve qoq in 4Q22, driven by seasonally higher construction activity, solid infrastructu ...
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- Vedanta Resources Plc - India
- Sakthi Sugars Limited - India
- Indika Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- New Zealand Coal & Carbon
- Holcim Trading Pte Ltd - Singapore
- Antam Resourcindo - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Ambuja Cements Ltd - India
- Deloitte Consulting - India
- Goldman Sachs - Singapore
- Attock Cement Pakistan Limited
- Baramulti Group, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Cigading International Bulk Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- GMR Energy Limited - India
- Cement Manufacturers Association - India
- Banpu Public Company Limited - Thailand
- Mercuria Energy - Indonesia
- PTC India Limited - India
- Thai Mozambique Logistica
- Bulk Trading Sa - Switzerland
- Borneo Indobara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Riau Bara Harum - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GVK Power & Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Agrawal Coal Company - India
- Orica Mining Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Indonesian Coal Mining Association
- Jindal Steel & Power Ltd - India
- White Energy Company Limited
- Indogreen Group - Indonesia
- Planning Commission, India
- Bhoruka Overseas - Indonesia
- Latin American Coal - Colombia
- Eastern Coal Council - USA
- SMC Global Power, Philippines
- Merrill Lynch Commodities Europe
- Madhucon Powers Ltd - India
- Global Business Power Corporation, Philippines
- Indian Energy Exchange, India
- Australian Coal Association
- PowerSource Philippines DevCo
- Independent Power Producers Association of India
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- Pendopo Energi Batubara - Indonesia
- Star Paper Mills Limited - India
- Aditya Birla Group - India
- Kaltim Prima Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Bharathi Cement Corporation - India
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- Singapore Mercantile Exchange
- Power Finance Corporation Ltd., India
- Commonwealth Bank - Australia
- Chettinad Cement Corporation Ltd - India
- Maheswari Brothers Coal Limited - India
- Central Electricity Authority - India
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- Medco Energi Mining Internasional
- Renaissance Capital - South Africa
- Australian Commodity Traders Exchange
- Tata Chemicals Ltd - India
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Oldendorff Carriers - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Essar Steel Hazira Ltd - India
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Alfred C Toepfer International GmbH - Germany
- GN Power Mariveles Coal Plant, Philippines
- Bukit Baiduri Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Timah Investasi Mineral - Indoneisa
- Gujarat Sidhee Cement - India
- Siam City Cement - Thailand
- Mintek Dendrill Indonesia
- Mercator Lines Limited - India
- PNOC Exploration Corporation - Philippines
- Formosa Plastics Group - Taiwan
- ASAPP Information Group - India
- Ministry of Transport, Egypt
- Posco Energy - South Korea
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- Thiess Contractors Indonesia
- Vizag Seaport Private Limited - India
- CNBM International Corporation - China
- Economic Council, Georgia
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- Eastern Energy - Thailand
- Energy Development Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Minerals Council of Australia
- Port Waratah Coal Services - Australia
- Kepco SPC Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Salva Resources Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Therma Luzon, Inc, Philippines
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- ICICI Bank Limited - India
- Parliament of New Zealand
- Bayan Resources Tbk. - Indonesia
- Africa Commodities Group - South Africa
- Wood Mackenzie - Singapore
- Romanian Commodities Exchange
- Bhushan Steel Limited - India
- Indian Oil Corporation Limited
- Simpson Spence & Young - Indonesia
- Ministry of Mines - Canada
- TNB Fuel Sdn Bhd - Malaysia
- Rio Tinto Coal - Australia
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Orica Australia Pty. Ltd.
- Manunggal Multi Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Aboitiz Power Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Grasim Industreis Ltd - India
- The State Trading Corporation of India Ltd
- Makarim & Taira - Indonesia
- San Jose City I Power Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- India Bulls Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Ministry of Finance - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rashtriya Ispat Nigam Limited - India
- Sinarmas Energy and Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bukit Makmur.PT - Indonesia
- Uttam Galva Steels Limited - India
- Coal and Oil Company - UAE
- Sree Jayajothi Cements Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Savvy Resources Ltd - HongKong
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Standard Chartered Bank - UAE
- SMG Consultants - Indonesia
- Meralco Power Generation, Philippines
- Jaiprakash Power Ventures ltd
- Dalmia Cement Bharat India
- Wilmar Investment Holdings
- Lanco Infratech Ltd - India
- Kideco Jaya Agung - Indonesia
- The Treasury - Australian Government
- GAC Shipping (India) Pvt Ltd
- Sical Logistics Limited - India
- Sojitz Corporation - Japan
- Petron Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Kartika Selabumi Mining - Indonesia
- Anglo American - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- Bhatia International Limited - India
- Larsen & Toubro Limited - India
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Billiton Holdings Pty Ltd - Australia
- Parry Sugars Refinery, India
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- Central Java Power - Indonesia
- London Commodity Brokers - England
- VISA Power Limited - India
- Trasteel International SA, Italy
- Siam City Cement PLC, Thailand
- Heidelberg Cement - Germany
- Altura Mining Limited, Indonesia
- LBH Netherlands Bv - Netherlands
- TeaM Sual Corporation - Philippines
- The University of Queensland
- Binh Thuan Hamico - Vietnam
- Chamber of Mines of South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Interocean Group of Companies - India
- Bukit Asam (Persero) Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Videocon Industries ltd - India
- Kobexindo Tractors - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- IHS Mccloskey Coal Group - USA
- Intertek Mineral Services - Indonesia
- Toyota Tsusho Corporation, Japan
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