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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, 13 October 22
OPEC DOWNGRADES CRUDE OIL DEMAND, AS WORLD ECONOMY ENTERS SLOWDOWN
Crude Oil Price Movements
The OPEC Reference Basket (ORB) declined m-o-m by $6.58 in September, or 6.5%, to average $95.32/b. Pressure from equ ...
Wednesday, 12 October 22
MARKET INSIGHT - INTERMODAL
Sale and Purchase activity during the first three quarters of 2022 has been remarkable.
Focusing only on Tankers and Bulkers, such v ...
Monday, 10 October 22
ENERGY TRANSITION BOOSTS GLOBAL LONG-TERM DEMAND FOR METALS - FITCH RATINGS
The energy transition will significantly increase demand for metals used in manufacturing of electric vehicles (EVs) and renewable power generation ...
Monday, 10 October 22
GLOBAL CEOS EXPECT IMPENDING RECESSION TO BE 'SHORT AND SHARP,' POLL SHOWS - CNBC
Global CEOs are anticipating a recession in the next 12 months, according to a new survey by professional services firm KPMG, which said more than ...
Thursday, 06 October 22
AUSTRALIA’S RESOURCES REVENUE TO HIT RECORD AMID UKRAINE CONFLICT - REUTERS
Australian resources and energy export earnings are forecast to jump 7% to a record A$450 billion ($290 billion) this fiscal year, bolstered by soa ...
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- Vijayanagar Sugar Pvt Ltd - India
- Orica Mining Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Malabar Cements Ltd - India
- Singapore Mercantile Exchange
- Ministry of Finance - Indonesia
- Kideco Jaya Agung - Indonesia
- Eastern Coal Council - USA
- Makarim & Taira - Indonesia
- Sical Logistics Limited - India
- Kobexindo Tractors - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Chettinad Cement Corporation Ltd - India
- Xindia Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- PNOC Exploration Corporation - Philippines
- Central Java Power - Indonesia
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- Cement Manufacturers Association - India
- Miang Besar Coal Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- Thiess Contractors Indonesia
- Meralco Power Generation, Philippines
- Ambuja Cements Ltd - India
- London Commodity Brokers - England
- Jindal Steel & Power Ltd - India
- ICICI Bank Limited - India
- Latin American Coal - Colombia
- Economic Council, Georgia
- Coal and Oil Company - UAE
- Wilmar Investment Holdings
- OPG Power Generation Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Petron Corporation, Philippines
- GMR Energy Limited - India
- Star Paper Mills Limited - India
- Straits Asia Resources Limited - Singapore
- Toyota Tsusho Corporation, Japan
- Bukit Makmur.PT - Indonesia
- Renaissance Capital - South Africa
- Indian Energy Exchange, India
- Indika Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Carbofer General Trading SA - India
- Marubeni Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Sakthi Sugars Limited - India
- SMG Consultants - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Coalindo Energy - Indonesia
- Mintek Dendrill Indonesia
- Sarangani Energy Corporation, Philippines
- Borneo Indobara - Indonesia
- South Luzon Thermal Energy Corporation
- McConnell Dowell - Australia
- Jaiprakash Power Ventures ltd
- Interocean Group of Companies - India
- Salva Resources Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- Indian Oil Corporation Limited
- Kapuas Tunggal Persada - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- Posco Energy - South Korea
- Kumho Petrochemical, South Korea
- Georgia Ports Authority, United States
- Intertek Mineral Services - Indonesia
- Mercator Lines Limited - India
- Planning Commission, India
- Globalindo Alam Lestari - Indonesia
- Bhushan Steel Limited - India
- India Bulls Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Port Waratah Coal Services - Australia
- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- CNBM International Corporation - China
- Bhatia International Limited - India
- Eastern Energy - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Altura Mining Limited, Indonesia
- Sree Jayajothi Cements Limited - India
- Iligan Light & Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Leighton Contractors Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- Vedanta Resources Plc - India
- Siam City Cement - Thailand
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- VISA Power Limited - India
- Central Electricity Authority - India
- Binh Thuan Hamico - Vietnam
- Indonesian Coal Mining Association
- Baramulti Group, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Kartika Selabumi Mining - Indonesia
- GVK Power & Infra Limited - India
- Bangladesh Power Developement Board
- Trasteel International SA, Italy
- Bayan Resources Tbk. - Indonesia
- Directorate Of Revenue Intelligence - India
- Petrochimia International Co. Ltd.- Taiwan
- Standard Chartered Bank - UAE
- Semirara Mining Corp, Philippines
- Wood Mackenzie - Singapore
- Rio Tinto Coal - Australia
- Minerals Council of Australia
- Commonwealth Bank - Australia
- Australian Commodity Traders Exchange
- Price Waterhouse Coopers - Russia
- Merrill Lynch Commodities Europe
- The State Trading Corporation of India Ltd
- Electricity Generating Authority of Thailand
- Medco Energi Mining Internasional
- Meenaskhi Energy Private Limited - India
- Anglo American - United Kingdom
- SMC Global Power, Philippines
- Deloitte Consulting - India
- TeaM Sual Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Riau Bara Harum - Indonesia
- Essar Steel Hazira Ltd - India
- Edison Trading Spa - Italy
- Siam City Cement PLC, Thailand
- Ceylon Electricity Board - Sri Lanka
- Parry Sugars Refinery, India
- Maharashtra Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Romanian Commodities Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- IHS Mccloskey Coal Group - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kepco SPC Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Videocon Industries ltd - India
- Energy Development Corp, Philippines
- Independent Power Producers Association of India
- Tata Chemicals Ltd - India
- Parliament of New Zealand
- Antam Resourcindo - Indonesia
- Madhucon Powers Ltd - India
- PTC India Limited - India
- Uttam Galva Steels Limited - India
- Africa Commodities Group - South Africa
- Larsen & Toubro Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Savvy Resources Ltd - HongKong
- Karbindo Abesyapradhi - Indoneisa
- White Energy Company Limited
- The University of Queensland
- GAC Shipping (India) Pvt Ltd
- Grasim Industreis Ltd - India
- Kaltim Prima Coal - Indonesia
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Attock Cement Pakistan Limited
- Manunggal Multi Energi - Indonesia
- Ministry of Transport, Egypt
- Dalmia Cement Bharat India
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Energy Link Ltd, New Zealand
- Thai Mozambique Logistica
- Mjunction Services Limited - India
- Tamil Nadu electricity Board
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Global Coal Blending Company Limited - Australia
- Orica Australia Pty. Ltd.
- Agrawal Coal Company - India
- Gujarat Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Ind-Barath Power Infra Limited - India
- MS Steel International - UAE
- Global Business Power Corporation, Philippines
- Indogreen Group - Indonesia
- Chamber of Mines of South Africa
- Ministry of Mines - Canada
- Oldendorff Carriers - Singapore
- Mercuria Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- The Treasury - Australian Government
- Gujarat Sidhee Cement - India
- Cigading International Bulk Terminal - Indonesia
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Electricity Authority, New Zealand
- Vizag Seaport Private Limited - India
- LBH Netherlands Bv - Netherlands
- Therma Luzon, Inc, Philippines
- New Zealand Coal & Carbon
- Pendopo Energi Batubara - Indonesia
- Bulk Trading Sa - Switzerland
- Goldman Sachs - Singapore
- Lanco Infratech Ltd - India
- Bharathi Cement Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Rashtriya Ispat Nigam Limited - India
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