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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, 26 July 22
CAP RUSSIA'S OIL PRICE NOW - PROJECT SYNDICATE
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Tuesday, 26 July 22
WILL SOUTH AMERICA’S WINTER DEMAND DRAW LNG CARGOES AWAY FROM EUROPE? - ICIS
South America is now in the middle of its winter demand season. Last year the region increased its share of global LNG imports in winter, with Braz ...
Monday, 25 July 22
GLOBAL 2021 COAL-FIRED ELECTRICITY GENERATION SURGES TO RECORD HIGH - REUTERS
By contrast, mine output was still fractionally below the record set between 2012 and 2014 because older and less efficient coal generators have be ...
Saturday, 23 July 22
THE EU HAS BEEN REDUCING IMPORTS OF RUSSIAN REFINED OIL PRODUCTS SINCE MARCH - BANCHERO COSTA
The European Union could now ban the import and transit of fuel oil from Russia around six months ahead of the planned deadline, an EU official and ...
Saturday, 23 July 22
INDONESIA CONSIDERING SCRAPPING DOMESTIC SALES RULE FOR PALM OIL EXPORTS - REUTERS
Indonesia is considering removing a domestic sales requirement for palm oil exports because high inventories of the vegetable oil have been holding ...
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- Semirara Mining Corp, Philippines
- Ambuja Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- McConnell Dowell - Australia
- Chamber of Mines of South Africa
- Indian Oil Corporation Limited
- AsiaOL BioFuels Corp., Philippines
- Ministry of Transport, Egypt
- Bahari Cakrawala Sebuku - Indonesia
- White Energy Company Limited
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Goldman Sachs - Singapore
- Gujarat Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- Indogreen Group - Indonesia
- Aditya Birla Group - India
- Tata Chemicals Ltd - India
- Maheswari Brothers Coal Limited - India
- Heidelberg Cement - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Finance - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- Uttam Galva Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Altura Mining Limited, Indonesia
- Larsen & Toubro Limited - India
- Edison Trading Spa - Italy
- Medco Energi Mining Internasional
- IHS Mccloskey Coal Group - USA
- Kapuas Tunggal Persada - Indonesia
- Simpson Spence & Young - Indonesia
- Romanian Commodities Exchange
- Kideco Jaya Agung - Indonesia
- Banpu Public Company Limited - Thailand
- Kumho Petrochemical, South Korea
- Eastern Coal Council - USA
- Karbindo Abesyapradhi - Indoneisa
- Commonwealth Bank - Australia
- Kepco SPC Power Corporation, Philippines
- Singapore Mercantile Exchange
- Interocean Group of Companies - India
- Iligan Light & Power Inc, Philippines
- Attock Cement Pakistan Limited
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- Bukit Baiduri Energy - Indonesia
- Videocon Industries ltd - India
- PNOC Exploration Corporation - Philippines
- Wilmar Investment Holdings
- GMR Energy Limited - India
- Sree Jayajothi Cements Limited - India
- Minerals Council of Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Formosa Plastics Group - Taiwan
- Energy Development Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Georgia Ports Authority, United States
- Bukit Makmur.PT - Indonesia
- Australian Coal Association
- Coastal Gujarat Power Limited - India
- Salva Resources Pvt Ltd - India
- Economic Council, Georgia
- Mercator Lines Limited - India
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
- GAC Shipping (India) Pvt Ltd
- Neyveli Lignite Corporation Ltd, - India
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
- Kobexindo Tractors - Indoneisa
- Orica Australia Pty. Ltd.
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Savvy Resources Ltd - HongKong
- Marubeni Corporation - India
- Central Electricity Authority - India
- Indika Energy - Indonesia
- Riau Bara Harum - Indonesia
- Rashtriya Ispat Nigam Limited - India
- OPG Power Generation Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Sical Logistics Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- TeaM Sual Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- San Jose City I Power Corp, Philippines
- Cement Manufacturers Association - India
- Semirara Mining and Power Corporation, Philippines
- Africa Commodities Group - South Africa
- SN Aboitiz Power Inc, Philippines
- Posco Energy - South Korea
- Madhucon Powers Ltd - India
- The University of Queensland
- Metalloyd Limited - United Kingdom
- Electricity Generating Authority of Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- Tamil Nadu electricity Board
- IEA Clean Coal Centre - UK
- Trasteel International SA, Italy
- Krishnapatnam Port Company Ltd. - India
- Alfred C Toepfer International GmbH - Germany
- The State Trading Corporation of India Ltd
- Bhatia International Limited - India
- Independent Power Producers Association of India
- Samtan Co., Ltd - South Korea
- Vedanta Resources Plc - India
- Coalindo Energy - Indonesia
- Port Waratah Coal Services - Australia
- South Luzon Thermal Energy Corporation
- Aboitiz Power Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- Directorate Of Revenue Intelligence - India
- Indo Tambangraya Megah - Indonesia
- Grasim Industreis Ltd - India
- Holcim Trading Pte Ltd - Singapore
- GVK Power & Infra Limited - India
- India Bulls Power Limited - India
- Anglo American - United Kingdom
- European Bulk Services B.V. - Netherlands
- Kartika Selabumi Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Binh Thuan Hamico - Vietnam
- Jaiprakash Power Ventures ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- Indonesian Coal Mining Association
- Straits Asia Resources Limited - Singapore
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- Ministry of Mines - Canada
- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- Antam Resourcindo - Indonesia
- Merrill Lynch Commodities Europe
- Electricity Authority, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- International Coal Ventures Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- PowerSource Philippines DevCo
- Star Paper Mills Limited - India
- Renaissance Capital - South Africa
- VISA Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Thai Mozambique Logistica
- Bayan Resources Tbk. - Indonesia
- Petron Corporation, Philippines
- Gujarat Sidhee Cement - India
- Bangladesh Power Developement Board
- SMG Consultants - Indonesia
- CIMB Investment Bank - Malaysia
- Baramulti Group, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- Mintek Dendrill Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Borneo Indobara - Indonesia
- Meenaskhi Energy Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- PTC India Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Bharathi Cement Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Mjunction Services Limited - India
- LBH Netherlands Bv - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Agrawal Coal Company - India
- MS Steel International - UAE
- The Treasury - Australian Government
- Bhushan Steel Limited - India
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- ICICI Bank Limited - India
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- Meralco Power Generation, Philippines
- Price Waterhouse Coopers - Russia
- Coal and Oil Company - UAE
- Parliament of New Zealand
- Malabar Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement - Thailand
- Kaltim Prima Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Jindal Steel & Power Ltd - India
- Vizag Seaport Private Limited - India
- Latin American Coal - Colombia
- Globalindo Alam Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Orica Mining Services - Indonesia
- Parry Sugars Refinery, India
- Kohat Cement Company Ltd. - Pakistan
- Sarangani Energy Corporation, Philippines
- Deloitte Consulting - India
- SMC Global Power, Philippines
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