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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 September 22
INDONESIA COAL PRICE REFERENCE SLIPS SLIGHTLY IN SEPTEMBER 2022
COALspot.com: Indonesian Coal Price Reference for September delivery drops 0.74 per cent month on month.
The Indonesian Coal Price R ...
Friday, 02 September 22
ABM INVESTAMA BUYS 30% GEMS SHARES FOR US$ 420 MILLION
PT ABM Investama Tbk through its indirect subsidiary, bought a 30% stake in the PT Golden Energy Mines Tbk for US$ 420 million or around Rp 6.2 tri ...
Wednesday, 31 August 22
MARKET INSIGHT - INTERMODAL
Scorching temperatures and extremely dry conditions during the Northern hemisphere summer have been drying crops. Yield prospects have subsided in ...
Tuesday, 23 August 22
HIGH COAL PRICES COULD BOOST INDONESIA'S ENERGY TRANSITION - IEEFA
Global coal prices have reached an all-time high as countries stop purchasing Russian coal amidst the Russia-Ukraine conflict. Indonesian coal comp ...
Tuesday, 23 August 22
A COMBINED US$6.8-BILLION CASH BALANCE OF INDONESIAN COAL COMPANIES COULD PROVIDE FOR TIMELY INVESTMENTS IN GREEN TRANSITION - IEEFA
A combined US$6.8-billion cash balance of Indonesian coal companies could provide for timely investments in green transition
The opp ...
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- Pendopo Energi Batubara - Indonesia
- Bukit Makmur.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Energy Link Ltd, New Zealand
- Timah Investasi Mineral - Indoneisa
- Marubeni Corporation - India
- Agrawal Coal Company - India
- Bhoruka Overseas - Indonesia
- Singapore Mercantile Exchange
- GMR Energy Limited - India
- Wood Mackenzie - Singapore
- Mercator Lines Limited - India
- Energy Development Corp, Philippines
- Eastern Energy - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- Kideco Jaya Agung - Indonesia
- Simpson Spence & Young - Indonesia
- Sical Logistics Limited - India
- Carbofer General Trading SA - India
- Oldendorff Carriers - Singapore
- Sakthi Sugars Limited - India
- Coal and Oil Company - UAE
- Intertek Mineral Services - Indonesia
- Larsen & Toubro Limited - India
- Maheswari Brothers Coal Limited - India
- Central Electricity Authority - India
- Grasim Industreis Ltd - India
- IHS Mccloskey Coal Group - USA
- Anglo American - United Kingdom
- PTC India Limited - India
- Sarangani Energy Corporation, Philippines
- Essar Steel Hazira Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Aditya Birla Group - India
- SMG Consultants - Indonesia
- Medco Energi Mining Internasional
- Bhatia International Limited - India
- Mintek Dendrill Indonesia
- Alfred C Toepfer International GmbH - Germany
- Latin American Coal - Colombia
- Price Waterhouse Coopers - Russia
- Indian Energy Exchange, India
- ASAPP Information Group - India
- Rashtriya Ispat Nigam Limited - India
- Uttam Galva Steels Limited - India
- Indogreen Group - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- Salva Resources Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Posco Energy - South Korea
- Edison Trading Spa - Italy
- Karaikal Port Pvt Ltd - India
- Indian Oil Corporation Limited
- Kapuas Tunggal Persada - Indonesia
- Global Business Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Interocean Group of Companies - India
- Malabar Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- Australian Commodity Traders Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Australia Pty. Ltd.
- Pipit Mutiara Jaya. PT, Indonesia
- PowerSource Philippines DevCo
- Bank of Tokyo Mitsubishi UFJ Ltd
- Lanco Infratech Ltd - India
- Ministry of Finance - Indonesia
- Riau Bara Harum - Indonesia
- Kaltim Prima Coal - Indonesia
- Merrill Lynch Commodities Europe
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- Billiton Holdings Pty Ltd - Australia
- Commonwealth Bank - Australia
- Videocon Industries ltd - India
- Minerals Council of Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- The Treasury - Australian Government
- Thai Mozambique Logistica
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- Deloitte Consulting - India
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement - Thailand
- Binh Thuan Hamico - Vietnam
- Bulk Trading Sa - Switzerland
- Thiess Contractors Indonesia
- New Zealand Coal & Carbon
- Global Green Power PLC Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Planning Commission, India
- Star Paper Mills Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- CNBM International Corporation - China
- Siam City Cement PLC, Thailand
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Meralco Power Generation, Philippines
- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- Ministry of Mines - Canada
- Sojitz Corporation - Japan
- Bangladesh Power Developement Board
- LBH Netherlands Bv - Netherlands
- Tamil Nadu electricity Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- Toyota Tsusho Corporation, Japan
- Indo Tambangraya Megah - Indonesia
- Electricity Generating Authority of Thailand
- Kepco SPC Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Banpu Public Company Limited - Thailand
- Directorate Of Revenue Intelligence - India
- Heidelberg Cement - Germany
- Miang Besar Coal Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Bharathi Cement Corporation - India
- McConnell Dowell - Australia
- Sree Jayajothi Cements Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Ceylon Electricity Board - Sri Lanka
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- Ambuja Cements Ltd - India
- Georgia Ports Authority, United States
- Ind-Barath Power Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Chamber of Mines of South Africa
- Eastern Coal Council - USA
- SN Aboitiz Power Inc, Philippines
- Mercuria Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Straits Asia Resources Limited - Singapore
- Trasteel International SA, Italy
- Dalmia Cement Bharat India
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bayan Resources Tbk. - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- The State Trading Corporation of India Ltd
- European Bulk Services B.V. - Netherlands
- Altura Mining Limited, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Xindia Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- ICICI Bank Limited - India
- Economic Council, Georgia
- Indonesian Coal Mining Association
- VISA Power Limited - India
- Central Java Power - Indonesia
- CIMB Investment Bank - Malaysia
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- Power Finance Corporation Ltd., India
- MS Steel International - UAE
- Global Coal Blending Company Limited - Australia
- PetroVietnam Power Coal Import and Supply Company
- White Energy Company Limited
- GAC Shipping (India) Pvt Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- International Coal Ventures Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- Madhucon Powers Ltd - India
- Renaissance Capital - South Africa
- Indika Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Barasentosa Lestari - Indonesia
- Wilmar Investment Holdings
- Ministry of Transport, Egypt
- Manunggal Multi Energi - Indonesia
- Antam Resourcindo - Indonesia
- Goldman Sachs - Singapore
- The University of Queensland
- Electricity Authority, New Zealand
- Semirara Mining and Power Corporation, Philippines
- SMC Global Power, Philippines
- Rio Tinto Coal - Australia
- Vizag Seaport Private Limited - India
- India Bulls Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Borneo Indobara - Indonesia
- Vedanta Resources Plc - India
- Directorate General of MIneral and Coal - Indonesia
- Romanian Commodities Exchange
- Kobexindo Tractors - Indoneisa
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