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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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Tuesday, 23 August 22
SHIPPING INDUSTRY TO REMOVE THE INDIAN OCEAN HIGH RISK AREA - BIMCO
After more than a decade of effective threat-reducing counter-piracy operations the shipping industry has removed the ‘Indian Ocean High Risk ...
Tuesday, 23 August 22
SHIPPING: GLOBAL TAX REFORM - WATSON FARLEY & WILLIAMS
OECD rules designed to implement a global minimum corporate tax rate for very large multinational groups have now been published and are expected t ...
Tuesday, 23 August 22
PARTIES CONCLUDE JOINT R&D AGREEMENT FOR WORLD’S FIRST AMMONIA FLOATING STORAGE AND REGASIFICATION BARGE CONTRIBUTING TO PROMOTING THE EARLY INTRODUCTION OF AMMONIA FUEL - NYK
NYK Line, Nihon Shipyard Co., Ltd. (NSY), ClassNK, and IHI Corporation (IHI) signed a joint research and development agreement for the commercializ ...
Monday, 22 August 22
INDONESIAN GOVERNMENT IMPOSED ON NEW PROGRESSIVE ROYALTIES FOR COAL
Indonesian President Joko Widodo has signed a Government Regulation (Number 26 of 2022) on 15 August 2022 related to the progressive royalty rates ...
Monday, 22 August 22
CHINA'S JULY RUSSIAN COAL IMPORTS HIT 5-YR HIGH AS WEST SHUNS MOSCOW - REUTERS
China’s coal imports from Russia jumped 14% in July from a year earlier to their highest in at least five years, as China bought discounted c ...
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- Energy Development Corp, Philippines
- Indogreen Group - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Coal and Oil Company - UAE
- ASAPP Information Group - India
- Banpu Public Company Limited - Thailand
- Gujarat Sidhee Cement - India
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- Makarim & Taira - Indonesia
- Kapuas Tunggal Persada - Indonesia
- VISA Power Limited - India
- Coastal Gujarat Power Limited - India
- Singapore Mercantile Exchange
- Oldendorff Carriers - Singapore
- Australian Coal Association
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- GVK Power & Infra Limited - India
- Deloitte Consulting - India
- Romanian Commodities Exchange
- Eastern Energy - Thailand
- Rio Tinto Coal - Australia
- Medco Energi Mining Internasional
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Madhucon Powers Ltd - India
- Georgia Ports Authority, United States
- GAC Shipping (India) Pvt Ltd
- Kohat Cement Company Ltd. - Pakistan
- PTC India Limited - India
- Commonwealth Bank - Australia
- South Luzon Thermal Energy Corporation
- Bhatia International Limited - India
- Maheswari Brothers Coal Limited - India
- Metalloyd Limited - United Kingdom
- Global Coal Blending Company Limited - Australia
- SMG Consultants - Indonesia
- Independent Power Producers Association of India
- Savvy Resources Ltd - HongKong
- Jorong Barutama Greston.PT - Indonesia
- Standard Chartered Bank - UAE
- Price Waterhouse Coopers - Russia
- Power Finance Corporation Ltd., India
- Energy Link Ltd, New Zealand
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- Riau Bara Harum - Indonesia
- Tamil Nadu electricity Board
- Therma Luzon, Inc, Philippines
- White Energy Company Limited
- Pendopo Energi Batubara - Indonesia
- Kobexindo Tractors - Indoneisa
- Orica Mining Services - Indonesia
- Thiess Contractors Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Videocon Industries ltd - India
- Indonesian Coal Mining Association
- Manunggal Multi Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Uttam Galva Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Anglo American - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Directorate Of Revenue Intelligence - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tata Chemicals Ltd - India
- Straits Asia Resources Limited - Singapore
- Port Waratah Coal Services - Australia
- Lanco Infratech Ltd - India
- Indian Energy Exchange, India
- Borneo Indobara - Indonesia
- MS Steel International - UAE
- San Jose City I Power Corp, Philippines
- Chamber of Mines of South Africa
- PetroVietnam Power Coal Import and Supply Company
- London Commodity Brokers - England
- IEA Clean Coal Centre - UK
- Renaissance Capital - South Africa
- Kartika Selabumi Mining - Indonesia
- Parry Sugars Refinery, India
- Posco Energy - South Korea
- Leighton Contractors Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Mintek Dendrill Indonesia
- Planning Commission, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Marubeni Corporation - India
- Chettinad Cement Corporation Ltd - India
- Bukit Makmur.PT - Indonesia
- Ambuja Cements Ltd - India
- Vedanta Resources Plc - India
- Bulk Trading Sa - Switzerland
- PowerSource Philippines DevCo
- Simpson Spence & Young - Indonesia
- PNOC Exploration Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Economic Council, Georgia
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement PLC, Thailand
- IHS Mccloskey Coal Group - USA
- Semirara Mining and Power Corporation, Philippines
- Ministry of Mines - Canada
- LBH Netherlands Bv - Netherlands
- Cement Manufacturers Association - India
- Minerals Council of Australia
- Petron Corporation, Philippines
- Xindia Steels Limited - India
- Wilmar Investment Holdings
- Karbindo Abesyapradhi - Indoneisa
- Grasim Industreis Ltd - India
- Kaltim Prima Coal - Indonesia
- India Bulls Power Limited - India
- Vizag Seaport Private Limited - India
- Semirara Mining Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Africa Commodities Group - South Africa
- Holcim Trading Pte Ltd - Singapore
- Barasentosa Lestari - Indonesia
- CNBM International Corporation - China
- Iligan Light & Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMC Global Power, Philippines
- Globalindo Alam Lestari - Indonesia
- Bhushan Steel Limited - India
- Global Green Power PLC Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Ind-Barath Power Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Edison Trading Spa - Italy
- Siam City Cement - Thailand
- Agrawal Coal Company - India
- Attock Cement Pakistan Limited
- Goldman Sachs - Singapore
- Indika Energy - Indonesia
- Electricity Authority, New Zealand
- Krishnapatnam Port Company Ltd. - India
- Heidelberg Cement - Germany
- Sical Logistics Limited - India
- Kumho Petrochemical, South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- Mercuria Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Antam Resourcindo - Indonesia
- Altura Mining Limited, Indonesia
- Malabar Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Larsen & Toubro Limited - India
- Bayan Resources Tbk. - Indonesia
- Aditya Birla Group - India
- The Treasury - Australian Government
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Indo Tambangraya Megah - Indonesia
- Eastern Coal Council - USA
- ICICI Bank Limited - India
- Karaikal Port Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Intertek Mineral Services - Indonesia
- Trasteel International SA, Italy
- Wood Mackenzie - Singapore
- Essar Steel Hazira Ltd - India
- Sojitz Corporation - Japan
- Parliament of New Zealand
- Electricity Generating Authority of Thailand
- GMR Energy Limited - India
- Meralco Power Generation, Philippines
- Star Paper Mills Limited - India
- Global Business Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Kepco SPC Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- Carbofer General Trading SA - India
- Merrill Lynch Commodities Europe
- Latin American Coal - Colombia
- Mercator Lines Limited - India
- The State Trading Corporation of India Ltd
- Billiton Holdings Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Indian Oil Corporation Limited
- Gujarat Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- Dalmia Cement Bharat India
- Central Java Power - Indonesia
- Ministry of Transport, Egypt
- Central Electricity Authority - India
- Sarangani Energy Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Mjunction Services Limited - India
- Bharathi Cement Corporation - India
- McConnell Dowell - Australia
- Baramulti Group, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- New Zealand Coal & Carbon
- Sinarmas Energy and Mining - Indonesia
- Ministry of Finance - Indonesia
- Sree Jayajothi Cements Limited - India
- Sakthi Sugars Limited - India
- Binh Thuan Hamico - Vietnam
- International Coal Ventures Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Thai Mozambique Logistica
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