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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 February 24
DRY BULK MARKET: THE DOWNWARD REVISION IN THE GROWTH OF CAPESIZE TONNE DAYS IN JANUARY WITH THE BCI DROPPING - MARIA BERTZELETOU
In the last week of January, the dry freight market sustained weakness in the Capesize segment, while the number of ballasters in the Southeast (SE ...
Friday, 02 February 24
COAL INDIA ACHIEVES NEARLY 80% OF ITS FY24 PRODUCTION TARGET IN TEN MONTHS - CNBCTV18
For the month of January, the company’s production grew by 9.1% from the same period last year to 78.4 Million Tonnes (MT), from 71.9 MT last ...
Thursday, 01 February 24
CHINA'S WIND, SOLAR CAPACITY TO OVERTAKE COAL IN 2024 - INDUSTRY BODY, REUTERS REPORTED
China’s installed wind and solar capacity is expected to overtake coal for the first time this year, according to industry forecasts.
&nb ...
Thursday, 01 February 24
ANTI-DEDUCTION CLAUSES: CAN A CHARTERER WITHHOLD HIRE WITHOUT AN OWNER'S CONSENT? - SKULD
KNOWLEDGE TO ELEVATE
Summary
In The Anna Dorothea, the Court found that where a charterparty provides that no deduction from hire may be m ...
Thursday, 01 February 24
INDIA REBUILDS COAL STOCKS TO ENSURE ELECTRIC RELIABILITY - REUTERS
India’s electricity supply is much more comfortable at the start of 2024 than in either 2023 or 2022 as coal production has ramped up and the ...
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- Pendopo Energi Batubara - Indonesia
- Therma Luzon, Inc, Philippines
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Simpson Spence & Young - Indonesia
- Commonwealth Bank - Australia
- Aditya Birla Group - India
- Madhucon Powers Ltd - India
- Metalloyd Limited - United Kingdom
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- Holcim Trading Pte Ltd - Singapore
- Kaltim Prima Coal - Indonesia
- Edison Trading Spa - Italy
- Kideco Jaya Agung - Indonesia
- Sree Jayajothi Cements Limited - India
- Electricity Authority, New Zealand
- The Treasury - Australian Government
- Petron Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Eastern Energy - Thailand
- Coastal Gujarat Power Limited - India
- Lanco Infratech Ltd - India
- Indian Energy Exchange, India
- PowerSource Philippines DevCo
- Global Green Power PLC Corporation, Philippines
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Transport, Egypt
- Kobexindo Tractors - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Larsen & Toubro Limited - India
- VISA Power Limited - India
- Renaissance Capital - South Africa
- The University of Queensland
- Kumho Petrochemical, South Korea
- OPG Power Generation Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- SN Aboitiz Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Deloitte Consulting - India
- Marubeni Corporation - India
- Indogreen Group - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Tata Chemicals Ltd - India
- Independent Power Producers Association of India
- Port Waratah Coal Services - Australia
- Karaikal Port Pvt Ltd - India
- Ministry of Mines - Canada
- Cigading International Bulk Terminal - Indonesia
- Indonesian Coal Mining Association
- Bukit Asam (Persero) Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Ambuja Cements Ltd - India
- India Bulls Power Limited - India
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Generating Authority of Thailand
- Antam Resourcindo - Indonesia
- Salva Resources Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Trasteel International SA, Italy
- LBH Netherlands Bv - Netherlands
- Mjunction Services Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bhushan Steel Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Meenaskhi Energy Private Limited - India
- Global Business Power Corporation, Philippines
- Parry Sugars Refinery, India
- Leighton Contractors Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Jindal Steel & Power Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Coal and Oil Company - UAE
- Rio Tinto Coal - Australia
- Power Finance Corporation Ltd., India
- Cement Manufacturers Association - India
- Borneo Indobara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Barasentosa Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Thai Mozambique Logistica
- Eastern Coal Council - USA
- IHS Mccloskey Coal Group - USA
- Georgia Ports Authority, United States
- Baramulti Group, Indonesia
- Central Java Power - Indonesia
- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- Altura Mining Limited, Indonesia
- Sical Logistics Limited - India
- Global Coal Blending Company Limited - Australia
- ICICI Bank Limited - India
- Goldman Sachs - Singapore
- Formosa Plastics Group - Taiwan
- White Energy Company Limited
- Bulk Trading Sa - Switzerland
- Medco Energi Mining Internasional
- Uttam Galva Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Riau Bara Harum - Indonesia
- San Jose City I Power Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Straits Asia Resources Limited - Singapore
- SMG Consultants - Indonesia
- CNBM International Corporation - China
- Semirara Mining Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Indian Oil Corporation Limited
- European Bulk Services B.V. - Netherlands
- TeaM Sual Corporation - Philippines
- Videocon Industries ltd - India
- Coalindo Energy - Indonesia
- Oldendorff Carriers - Singapore
- Xindia Steels Limited - India
- Gujarat Sidhee Cement - India
- Makarim & Taira - Indonesia
- SMC Global Power, Philippines
- Energy Development Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- Kapuas Tunggal Persada - Indonesia
- Sakthi Sugars Limited - India
- Sindya Power Generating Company Private Ltd
- Economic Council, Georgia
- Bayan Resources Tbk. - Indonesia
- Posco Energy - South Korea
- Agrawal Coal Company - India
- Mercuria Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Latin American Coal - Colombia
- AsiaOL BioFuels Corp., Philippines
- Standard Chartered Bank - UAE
- Indo Tambangraya Megah - Indonesia
- Ind-Barath Power Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Planning Commission, India
- Merrill Lynch Commodities Europe
- GAC Shipping (India) Pvt Ltd
- Grasim Industreis Ltd - India
- Australian Coal Association
- GMR Energy Limited - India
- Romanian Commodities Exchange
- Bangladesh Power Developement Board
- Africa Commodities Group - South Africa
- Semirara Mining and Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Carbofer General Trading SA - India
- Indika Energy - Indonesia
- Ministry of Finance - Indonesia
- Vizag Seaport Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Rashtriya Ispat Nigam Limited - India
- PNOC Exploration Corporation - Philippines
- Orica Mining Services - Indonesia
- Jaiprakash Power Ventures ltd
- Krishnapatnam Port Company Ltd. - India
- MS Steel International - UAE
- Orica Australia Pty. Ltd.
- Central Electricity Authority - India
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement - Thailand
- Parliament of New Zealand
- Meralco Power Generation, Philippines
- Singapore Mercantile Exchange
- Bhatia International Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kohat Cement Company Ltd. - Pakistan
- Banpu Public Company Limited - Thailand
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- Wood Mackenzie - Singapore
- Chamber of Mines of South Africa
- Kartika Selabumi Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- PTC India Limited - India
- Sojitz Corporation - Japan
- Tamil Nadu electricity Board
- Savvy Resources Ltd - HongKong
- Dalmia Cement Bharat India
- Minerals Council of Australia
- London Commodity Brokers - England
- South Luzon Thermal Energy Corporation
- Essar Steel Hazira Ltd - India
- Siam City Cement PLC, Thailand
- Asmin Koalindo Tuhup - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Star Paper Mills Limited - India
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- Attock Cement Pakistan Limited
- Australian Commodity Traders Exchange
- Iligan Light & Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Heidelberg Cement - Germany
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Toyota Tsusho Corporation, Japan
- Bhoruka Overseas - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Anglo American - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
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