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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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- Lanco Infratech Ltd - India
- Georgia Ports Authority, United States
- Vijayanagar Sugar Pvt Ltd - India
- Malabar Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Deloitte Consulting - India
- Metalloyd Limited - United Kingdom
- Energy Link Ltd, New Zealand
- Global Business Power Corporation, Philippines
- Siam City Cement - Thailand
- Interocean Group of Companies - India
- CIMB Investment Bank - Malaysia
- VISA Power Limited - India
- Central Electricity Authority - India
- Posco Energy - South Korea
- SMG Consultants - Indonesia
- Standard Chartered Bank - UAE
- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- Directorate Of Revenue Intelligence - India
- Binh Thuan Hamico - Vietnam
- Kartika Selabumi Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Videocon Industries ltd - India
- Power Finance Corporation Ltd., India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Authority, New Zealand
- Timah Investasi Mineral - Indoneisa
- Wilmar Investment Holdings
- Medco Energi Mining Internasional
- Xindia Steels Limited - India
- Central Java Power - Indonesia
- Kumho Petrochemical, South Korea
- Electricity Generating Authority of Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- India Bulls Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Vedanta Resources Plc - India
- Ministry of Transport, Egypt
- Carbofer General Trading SA - India
- AsiaOL BioFuels Corp., Philippines
- Agrawal Coal Company - India
- Thiess Contractors Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Karaikal Port Pvt Ltd - India
- Aditya Birla Group - India
- TeaM Sual Corporation - Philippines
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Cement Manufacturers Association - India
- Independent Power Producers Association of India
- Iligan Light & Power Inc, Philippines
- Oldendorff Carriers - Singapore
- Merrill Lynch Commodities Europe
- Mintek Dendrill Indonesia
- Mjunction Services Limited - India
- Leighton Contractors Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Madhucon Powers Ltd - India
- Bangladesh Power Developement Board
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sakthi Sugars Limited - India
- Bhatia International Limited - India
- GMR Energy Limited - India
- Savvy Resources Ltd - HongKong
- Indian Oil Corporation Limited
- Riau Bara Harum - Indonesia
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- Renaissance Capital - South Africa
- Commonwealth Bank - Australia
- Minerals Council of Australia
- Africa Commodities Group - South Africa
- Holcim Trading Pte Ltd - Singapore
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- Baramulti Group, Indonesia
- Thai Mozambique Logistica
- PNOC Exploration Corporation - Philippines
- Star Paper Mills Limited - India
- Indogreen Group - Indonesia
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- London Commodity Brokers - England
- Global Coal Blending Company Limited - Australia
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- Intertek Mineral Services - Indonesia
- Ministry of Finance - Indonesia
- Eastern Coal Council - USA
- Gujarat Mineral Development Corp Ltd - India
- The University of Queensland
- Indika Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kaltim Prima Coal - Indonesia
- Parry Sugars Refinery, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Krishnapatnam Port Company Ltd. - India
- International Coal Ventures Pvt Ltd - India
- Trasteel International SA, Italy
- PTC India Limited - India
- Altura Mining Limited, Indonesia
- Mercuria Energy - Indonesia
- Economic Council, Georgia
- OPG Power Generation Pvt Ltd - India
- MS Steel International - UAE
- Kapuas Tunggal Persada - Indonesia
- Aboitiz Power Corporation - Philippines
- Anglo American - United Kingdom
- Rio Tinto Coal - Australia
- Wood Mackenzie - Singapore
- Bhoruka Overseas - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Heidelberg Cement - Germany
- San Jose City I Power Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Australian Coal Association
- Jaiprakash Power Ventures ltd
- Coal and Oil Company - UAE
- Romanian Commodities Exchange
- Petron Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Banpu Public Company Limited - Thailand
- Gujarat Sidhee Cement - India
- Kalimantan Lumbung Energi - Indonesia
- Bulk Trading Sa - Switzerland
- Eastern Energy - Thailand
- Bukit Makmur.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Pendopo Energi Batubara - Indonesia
- Bukit Baiduri Energy - Indonesia
- SMC Global Power, Philippines
- Australian Commodity Traders Exchange
- IEA Clean Coal Centre - UK
- LBH Netherlands Bv - Netherlands
- Sojitz Corporation - Japan
- Samtan Co., Ltd - South Korea
- Port Waratah Coal Services - Australia
- Tata Chemicals Ltd - India
- Bharathi Cement Corporation - India
- Kepco SPC Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Bayan Resources Tbk. - Indonesia
- Global Green Power PLC Corporation, Philippines
- Indonesian Coal Mining Association
- Goldman Sachs - Singapore
- Barasentosa Lestari - Indonesia
- Attock Cement Pakistan Limited
- Coastal Gujarat Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Singapore Mercantile Exchange
- Siam City Cement PLC, Thailand
- PetroVietnam Power Coal Import and Supply Company
- Edison Trading Spa - Italy
- Orica Mining Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- SN Aboitiz Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Australia Pty. Ltd.
- Tamil Nadu electricity Board
- Antam Resourcindo - Indonesia
- New Zealand Coal & Carbon
- Sical Logistics Limited - India
- Bhushan Steel Limited - India
- Meenaskhi Energy Private Limited - India
- South Luzon Thermal Energy Corporation
- The Treasury - Australian Government
- Semirara Mining Corp, Philippines
- Vizag Seaport Private Limited - India
- Straits Asia Resources Limited - Singapore
- Ind-Barath Power Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- McConnell Dowell - Australia
- Dalmia Cement Bharat India
- Essar Steel Hazira Ltd - India
- Kobexindo Tractors - Indoneisa
- ASAPP Information Group - India
- Indian Energy Exchange, India
- Jindal Steel & Power Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- European Bulk Services B.V. - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Planning Commission, India
- White Energy Company Limited
- Simpson Spence & Young - Indonesia
- Energy Development Corp, Philippines
- Salva Resources Pvt Ltd - India
- Ambuja Cements Ltd - India
- Grasim Industreis Ltd - India
- Sindya Power Generating Company Private Ltd
- CNBM International Corporation - China
- Marubeni Corporation - India
- Latin American Coal - Colombia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Uttam Galva Steels Limited - India
- Ministry of Mines - Canada
- Chettinad Cement Corporation Ltd - India
- Makarim & Taira - Indonesia
- The State Trading Corporation of India Ltd
- Coalindo Energy - Indonesia
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