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