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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, 10 February 22
EIA ANALYSIS CONSIDERS DIFFERENT OUTCOMES FOR COAL MARKETS IN INDIA AND SOUTHEAST ASIA
In our International Energy Outlook 2021 (IEO2021) Issues in Focus: Uncertainty in Coal Trade in India and Greater Southeast Asia, we analyze three ...
Wednesday, 09 February 22
OIL PRICES: "IT'S GOING TO BE VERY EASY" TO GET TO $100/BARREL, ANALYST SAYS - YAHOO FINANCE
Energy and oil prices have been on fire over the last six months — and expect them to go higher, says one analyst.
“For ...
Wednesday, 09 February 22
MARKET INSIGHT - INTERMODAL
Iron ore prices have jumped significantly in the week prior to the Chinese New Year with traders and producers stocking up on raw materials. China& ...
Wednesday, 09 February 22
FEBRUARY HBA HITS RECORD HIGH IN 2022 ON INDONESIA’S EXPORT BAN IN JANUARY, WORSEN SUPPLY, UKRAINE TENSIONS
COALspot.com: Indonesian Coal Price Reference for February in a steep climb from January 2022.
As expected in January the Indonesia ...
Wednesday, 09 February 22
CHINESE COAL MARKS BEST DAY IN 4 MONTHS ON TIGHT SUPPLY, HIGH DEMAND - REUTERS
China’s coal futures on Tuesday recorded their best session since Bejing’s mid-October intervention to cool runaway prices, aided by co ...
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- Bangladesh Power Developement Board
- Bhushan Steel Limited - India
- Orica Australia Pty. Ltd.
- Trasteel International SA, Italy
- Star Paper Mills Limited - India
- Merrill Lynch Commodities Europe
- SMG Consultants - Indonesia
- Indian Energy Exchange, India
- Directorate Of Revenue Intelligence - India
- Tamil Nadu electricity Board
- Kartika Selabumi Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Renaissance Capital - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Jaiprakash Power Ventures ltd
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- IHS Mccloskey Coal Group - USA
- Planning Commission, India
- Semirara Mining and Power Corporation, Philippines
- Economic Council, Georgia
- Sindya Power Generating Company Private Ltd
- Karbindo Abesyapradhi - Indoneisa
- Agrawal Coal Company - India
- McConnell Dowell - Australia
- Global Business Power Corporation, Philippines
- Latin American Coal - Colombia
- Energy Link Ltd, New Zealand
- Grasim Industreis Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Thai Mozambique Logistica
- Posco Energy - South Korea
- Indogreen Group - Indonesia
- MS Steel International - UAE
- Standard Chartered Bank - UAE
- European Bulk Services B.V. - Netherlands
- Energy Development Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- Siam City Cement PLC, Thailand
- GN Power Mariveles Coal Plant, Philippines
- LBH Netherlands Bv - Netherlands
- India Bulls Power Limited - India
- Xindia Steels Limited - India
- Metalloyd Limited - United Kingdom
- Chamber of Mines of South Africa
- Bhoruka Overseas - Indonesia
- Sojitz Corporation - Japan
- Kepco SPC Power Corporation, Philippines
- Singapore Mercantile Exchange
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining Corp, Philippines
- Kumho Petrochemical, South Korea
- Manunggal Multi Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- Cement Manufacturers Association - India
- Kohat Cement Company Ltd. - Pakistan
- Holcim Trading Pte Ltd - Singapore
- Mintek Dendrill Indonesia
- Mercator Lines Limited - India
- AsiaOL BioFuels Corp., Philippines
- Sarangani Energy Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Port Waratah Coal Services - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Indo Tambangraya Megah - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- SMC Global Power, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Therma Luzon, Inc, Philippines
- Formosa Plastics Group - Taiwan
- Mjunction Services Limited - India
- VISA Power Limited - India
- International Coal Ventures Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Georgia Ports Authority, United States
- Marubeni Corporation - India
- Sakthi Sugars Limited - India
- Parry Sugars Refinery, India
- PowerSource Philippines DevCo
- Krishnapatnam Port Company Ltd. - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cigading International Bulk Terminal - Indonesia
- CNBM International Corporation - China
- Larsen & Toubro Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Central Java Power - Indonesia
- Savvy Resources Ltd - HongKong
- Coastal Gujarat Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Thiess Contractors Indonesia
- Bharathi Cement Corporation - India
- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Anglo American - United Kingdom
- Deloitte Consulting - India
- Ministry of Transport, Egypt
- Vizag Seaport Private Limited - India
- Karaikal Port Pvt Ltd - India
- London Commodity Brokers - England
- Price Waterhouse Coopers - Russia
- Interocean Group of Companies - India
- White Energy Company Limited
- Aditya Birla Group - India
- Malabar Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Timah Investasi Mineral - Indoneisa
- San Jose City I Power Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- PTC India Limited - India
- Eastern Coal Council - USA
- Gujarat Sidhee Cement - India
- Bukit Baiduri Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Tata Chemicals Ltd - India
- Dalmia Cement Bharat India
- Borneo Indobara - Indonesia
- New Zealand Coal & Carbon
- Kaltim Prima Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Lanco Infratech Ltd - India
- Straits Asia Resources Limited - Singapore
- Maheswari Brothers Coal Limited - India
- GAC Shipping (India) Pvt Ltd
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Altura Mining Limited, Indonesia
- Global Coal Blending Company Limited - Australia
- Meralco Power Generation, Philippines
- Wilmar Investment Holdings
- Ind-Barath Power Infra Limited - India
- PNOC Exploration Corporation - Philippines
- IEA Clean Coal Centre - UK
- Barasentosa Lestari - Indonesia
- Romanian Commodities Exchange
- Madhucon Powers Ltd - India
- Sree Jayajothi Cements Limited - India
- Ministry of Finance - Indonesia
- Bukit Makmur.PT - Indonesia
- Bhatia International Limited - India
- Bayan Resources Tbk. - Indonesia
- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- Orica Mining Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Baramulti Group, Indonesia
- Ambuja Cements Ltd - India
- Power Finance Corporation Ltd., India
- Globalindo Alam Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- Ministry of Mines - Canada
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Kideco Jaya Agung - Indonesia
- Heidelberg Cement - Germany
- Parliament of New Zealand
- Goldman Sachs - Singapore
- Rio Tinto Coal - Australia
- Neyveli Lignite Corporation Ltd, - India
- Uttam Galva Steels Limited - India
- Petron Corporation, Philippines
- Edison Trading Spa - Italy
- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- Intertek Mineral Services - Indonesia
- Australian Commodity Traders Exchange
- OPG Power Generation Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Vedanta Resources Plc - India
- Global Green Power PLC Corporation, Philippines
- Wood Mackenzie - Singapore
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coal and Oil Company - UAE
- The University of Queensland
- Commonwealth Bank - Australia
- Kobexindo Tractors - Indoneisa
- Electricity Authority, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Medco Energi Mining Internasional
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- Central Electricity Authority - India
- Sical Logistics Limited - India
- Antam Resourcindo - Indonesia
- Eastern Energy - Thailand
- The State Trading Corporation of India Ltd
- Salva Resources Pvt Ltd - India
- GMR Energy Limited - India
- Indonesian Coal Mining Association
- Attock Cement Pakistan Limited
- Asmin Koalindo Tuhup - Indonesia
- Independent Power Producers Association of India
- Africa Commodities Group - South Africa
- Simpson Spence & Young - Indonesia
- Bulk Trading Sa - Switzerland
- Indian Oil Corporation Limited
- Coalindo Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- The Treasury - Australian Government
- Maharashtra Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Minerals Council of Australia
- ASAPP Information Group - India
- Carbofer General Trading SA - India
- SN Aboitiz Power Inc, Philippines
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