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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, 19 July 22
SEEING RED? - WOOD MACKENZIE
What a Republican mid-term victory could mean for US energy and climate policy
According to current polling the Republican Party has ...
Thursday, 14 July 22
INDIA'S COAL IMPORTS HIT RECORD HIGH IN JUNE - REUTERS
India's coal imports hit a record high in June despite high global prices, data from three trade sources and Refinitiv ship tracking showed, as ...
Thursday, 14 July 22
CHINA'S JUNE COAL IMPORTS SLUMP AS TRADERS SHUN EXPENSIVE OVERSEAS CARGOES - REUTERS
China’s coal imports fell 33% in June from a year ago, with traders turning down expensive overseas cargoes in favor of domestic ones with ca ...
Wednesday, 13 July 22
KOWEPO TO IMPORT 2.79 MILLION TONS OF LOW TO MEDIUM COAL
COALspot.com: Korea Western Power Co., Ltd. (KOWEPO) has issued an International tender for Total 1360k MT of Min.4400 kcal/kg NCV coal and Total 1 ...
Wednesday, 13 July 22
HAVE MINERS MISSED THE BOAT TO INVEST AND GET AHEAD OF THE ENERGY TRANSITION? - WOOD MACKENZIE
Miners are in rude health, benefiting from economic stimuli, the post-pandemic recovery and associated supply constraints. Initially the Ukraine wa ...
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- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- Cement Manufacturers Association - India
- Interocean Group of Companies - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining Corp, Philippines
- Agrawal Coal Company - India
- Sical Logistics Limited - India
- Thai Mozambique Logistica
- Mercator Lines Limited - India
- Miang Besar Coal Terminal - Indonesia
- Indian Energy Exchange, India
- International Coal Ventures Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Tata Chemicals Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- Holcim Trading Pte Ltd - Singapore
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- GAC Shipping (India) Pvt Ltd
- Kepco SPC Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Riau Bara Harum - Indonesia
- Malabar Cements Ltd - India
- Coal and Oil Company - UAE
- Bharathi Cement Corporation - India
- Directorate Of Revenue Intelligence - India
- Baramulti Group, Indonesia
- MS Steel International - UAE
- Energy Development Corp, Philippines
- Savvy Resources Ltd - HongKong
- Semirara Mining and Power Corporation, Philippines
- Thiess Contractors Indonesia
- Therma Luzon, Inc, Philippines
- VISA Power Limited - India
- Commonwealth Bank - Australia
- Wood Mackenzie - Singapore
- Trasteel International SA, Italy
- Latin American Coal - Colombia
- Maheswari Brothers Coal Limited - India
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
- Parry Sugars Refinery, India
- Independent Power Producers Association of India
- Global Business Power Corporation, Philippines
- PTC India Limited - India
- Sindya Power Generating Company Private Ltd
- Samtan Co., Ltd - South Korea
- Jaiprakash Power Ventures ltd
- AsiaOL BioFuels Corp., Philippines
- Merrill Lynch Commodities Europe
- Rio Tinto Coal - Australia
- PowerSource Philippines DevCo
- Tamil Nadu electricity Board
- ASAPP Information Group - India
- Kaltim Prima Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Sree Jayajothi Cements Limited - India
- Gujarat Sidhee Cement - India
- Australian Coal Association
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Mjunction Services Limited - India
- Planning Commission, India
- Neyveli Lignite Corporation Ltd, - India
- Bangladesh Power Developement Board
- Vijayanagar Sugar Pvt Ltd - India
- Petron Corporation, Philippines
- Borneo Indobara - Indonesia
- Singapore Mercantile Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Romanian Commodities Exchange
- Indika Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Grasim Industreis Ltd - India
- Bulk Trading Sa - Switzerland
- Bank of Tokyo Mitsubishi UFJ Ltd
- IHS Mccloskey Coal Group - USA
- Africa Commodities Group - South Africa
- Simpson Spence & Young - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- Timah Investasi Mineral - Indoneisa
- Coastal Gujarat Power Limited - India
- Georgia Ports Authority, United States
- Marubeni Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Baiduri Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Eastern Coal Council - USA
- Sinarmas Energy and Mining - Indonesia
- Port Waratah Coal Services - Australia
- Maharashtra Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- India Bulls Power Limited - India
- IEA Clean Coal Centre - UK
- McConnell Dowell - Australia
- Kumho Petrochemical, South Korea
- South Luzon Thermal Energy Corporation
- Jindal Steel & Power Ltd - India
- Central Electricity Authority - India
- Cigading International Bulk Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Meralco Power Generation, Philippines
- CIMB Investment Bank - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bhoruka Overseas - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Larsen & Toubro Limited - India
- Formosa Plastics Group - Taiwan
- Indo Tambangraya Megah - Indonesia
- Global Green Power PLC Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Indonesian Coal Mining Association
- Electricity Generating Authority of Thailand
- TNB Fuel Sdn Bhd - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Lanco Infratech Ltd - India
- Chamber of Mines of South Africa
- Banpu Public Company Limited - Thailand
- Bhushan Steel Limited - India
- Meenaskhi Energy Private Limited - India
- Ministry of Mines - Canada
- The University of Queensland
- GVK Power & Infra Limited - India
- Goldman Sachs - Singapore
- Minerals Council of Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- Metalloyd Limited - United Kingdom
- Kideco Jaya Agung - Indonesia
- Alfred C Toepfer International GmbH - Germany
- CNBM International Corporation - China
- San Jose City I Power Corp, Philippines
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- Kapuas Tunggal Persada - Indonesia
- Star Paper Mills Limited - India
- PNOC Exploration Corporation - Philippines
- Deloitte Consulting - India
- Coalindo Energy - Indonesia
- Power Finance Corporation Ltd., India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
- Rashtriya Ispat Nigam Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Krishnapatnam Port Company Ltd. - India
- Vedanta Resources Plc - India
- Dalmia Cement Bharat India
- White Energy Company Limited
- Central Java Power - Indonesia
- Indian Oil Corporation Limited
- Mintek Dendrill Indonesia
- Edison Trading Spa - Italy
- Ind-Barath Power Infra Limited - India
- The Treasury - Australian Government
- Gujarat Electricity Regulatory Commission - India
- Ministry of Transport, Egypt
- Sojitz Corporation - Japan
- Directorate General of MIneral and Coal - Indonesia
- Australian Commodity Traders Exchange
- Asmin Koalindo Tuhup - Indonesia
- Toyota Tsusho Corporation, Japan
- Standard Chartered Bank - UAE
- Essar Steel Hazira Ltd - India
- Attock Cement Pakistan Limited
- Renaissance Capital - South Africa
- The State Trading Corporation of India Ltd
- SMC Global Power, Philippines
- New Zealand Coal & Carbon
- Siam City Cement PLC, Thailand
- Barasentosa Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Electricity Authority, New Zealand
- Ministry of Finance - Indonesia
- SN Aboitiz Power Inc, Philippines
- Medco Energi Mining Internasional
- Ambuja Cements Ltd - India
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- Economic Council, Georgia
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- Madhucon Powers Ltd - India
- Xindia Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sakthi Sugars Limited - India
- Leighton Contractors Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- Uttam Galva Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Makarim & Taira - Indonesia
- Intertek Mineral Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Kobexindo Tractors - Indoneisa
- Binh Thuan Hamico - Vietnam
- London Commodity Brokers - England
- Oldendorff Carriers - Singapore
- Vizag Seaport Private Limited - India
- Bukit Makmur.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Aditya Birla Group - India
- SMG Consultants - Indonesia
- Bhatia International Limited - India
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