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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, 06 September 24
REBOUND IN OIL DEMAND COULD LIFT MARKET IN LATTER HALF OF 2024 - BIMCO
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Friday, 06 September 24
GLOBAL SEABORNE LNG TRADE HAS CONTINUED TO INCREASE LAST YEAR - BANCHERO COSTA
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SEABORNE COAL IMPORTS INTO INDIA INCREASED BY +9.9% Y-O-Y TO 146.6 MLN T - BANCHERO COSTA
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Tuesday, 06 August 24
EXERCISE CAUTION WITH AMMONIA SWITCH - BALTIC EXCHANGE
A new study from the Massachusetts Institute of Technology (MIT) has thrown a spanner into the plan to transition ships from diesel fuel to ammonia ...
Friday, 02 August 24
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The recent surge in natural gas and coal prices has been so swift that the main benchmarks were roughly three times higher in 2022Q2 compared to a ...
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- Indika Energy - Indonesia
- Star Paper Mills Limited - India
- Samtan Co., Ltd - South Korea
- Kobexindo Tractors - Indoneisa
- Bangladesh Power Developement Board
- Borneo Indobara - Indonesia
- Siam City Cement PLC, Thailand
- Thai Mozambique Logistica
- Parliament of New Zealand
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Indo Tambangraya Megah - Indonesia
- Meralco Power Generation, Philippines
- Georgia Ports Authority, United States
- Bharathi Cement Corporation - India
- Deloitte Consulting - India
- Neyveli Lignite Corporation Ltd, - India
- Sindya Power Generating Company Private Ltd
- Bhushan Steel Limited - India
- Latin American Coal - Colombia
- Petron Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining Corp, Philippines
- The Treasury - Australian Government
- Economic Council, Georgia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercator Lines Limited - India
- Madhucon Powers Ltd - India
- Carbofer General Trading SA - India
- Bhoruka Overseas - Indonesia
- Thiess Contractors Indonesia
- Indian Energy Exchange, India
- Jorong Barutama Greston.PT - Indonesia
- Xindia Steels Limited - India
- Jaiprakash Power Ventures ltd
- LBH Netherlands Bv - Netherlands
- European Bulk Services B.V. - Netherlands
- Energy Link Ltd, New Zealand
- Manunggal Multi Energi - Indonesia
- Attock Cement Pakistan Limited
- Singapore Mercantile Exchange
- Cigading International Bulk Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Mercuria Energy - Indonesia
- Australian Coal Association
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- Ministry of Mines - Canada
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- Interocean Group of Companies - India
- Price Waterhouse Coopers - Russia
- Orica Australia Pty. Ltd.
- TNB Fuel Sdn Bhd - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Larsen & Toubro Limited - India
- Formosa Plastics Group - Taiwan
- Chamber of Mines of South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Standard Chartered Bank - UAE
- Directorate General of MIneral and Coal - Indonesia
- Makarim & Taira - Indonesia
- Savvy Resources Ltd - HongKong
- Heidelberg Cement - Germany
- Wilmar Investment Holdings
- GMR Energy Limited - India
- Baramulti Group, Indonesia
- Commonwealth Bank - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Billiton Holdings Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- IEA Clean Coal Centre - UK
- Karaikal Port Pvt Ltd - India
- Eastern Coal Council - USA
- Bulk Trading Sa - Switzerland
- Kaltim Prima Coal - Indonesia
- Coal and Oil Company - UAE
- Renaissance Capital - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Rio Tinto Coal - Australia
- Coalindo Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Eastern Energy - Thailand
- Barasentosa Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Kumho Petrochemical, South Korea
- Sinarmas Energy and Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Anglo American - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Lanco Infratech Ltd - India
- Simpson Spence & Young - Indonesia
- Power Finance Corporation Ltd., India
- Gujarat Mineral Development Corp Ltd - India
- Mintek Dendrill Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sical Logistics Limited - India
- Romanian Commodities Exchange
- Semirara Mining and Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Sarangani Energy Corporation, Philippines
- Dalmia Cement Bharat India
- Maharashtra Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- London Commodity Brokers - England
- The University of Queensland
- India Bulls Power Limited - India
- Sojitz Corporation - Japan
- Parry Sugars Refinery, India
- Independent Power Producers Association of India
- Ind-Barath Power Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Agrawal Coal Company - India
- Goldman Sachs - Singapore
- Iligan Light & Power Inc, Philippines
- New Zealand Coal & Carbon
- SN Aboitiz Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Metalloyd Limited - United Kingdom
- Oldendorff Carriers - Singapore
- Posco Energy - South Korea
- SMC Global Power, Philippines
- Mjunction Services Limited - India
- Electricity Authority, New Zealand
- PNOC Exploration Corporation - Philippines
- Indian Oil Corporation Limited
- Grasim Industreis Ltd - India
- White Energy Company Limited
- Central Java Power - Indonesia
- Toyota Tsusho Corporation, Japan
- Chettinad Cement Corporation Ltd - India
- TeaM Sual Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Globalindo Alam Lestari - Indonesia
- PowerSource Philippines DevCo
- Sakthi Sugars Limited - India
- International Coal Ventures Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- MS Steel International - UAE
- Kapuas Tunggal Persada - Indonesia
- Salva Resources Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Orica Mining Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Minerals Council of Australia
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- VISA Power Limited - India
- Therma Luzon, Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Malabar Cements Ltd - India
- Trasteel International SA, Italy
- Binh Thuan Hamico - Vietnam
- Ministry of Transport, Egypt
- Tamil Nadu electricity Board
- Pipit Mutiara Jaya. PT, Indonesia
- SMG Consultants - Indonesia
- Global Business Power Corporation, Philippines
- Aditya Birla Group - India
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kohat Cement Company Ltd. - Pakistan
- Alfred C Toepfer International GmbH - Germany
- GAC Shipping (India) Pvt Ltd
- Bukit Makmur.PT - Indonesia
- Wood Mackenzie - Singapore
- Kideco Jaya Agung - Indonesia
- The State Trading Corporation of India Ltd
- Kepco SPC Power Corporation, Philippines
- Medco Energi Mining Internasional
- Port Waratah Coal Services - Australia
- ASAPP Information Group - India
- Ambuja Cements Ltd - India
- PTC India Limited - India
- Global Coal Blending Company Limited - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate Of Revenue Intelligence - India
- Altura Mining Limited, Indonesia
- Uttam Galva Steels Limited - India
- Ministry of Finance - Indonesia
- South Luzon Thermal Energy Corporation
- Australian Commodity Traders Exchange
- Aboitiz Power Corporation - Philippines
- GVK Power & Infra Limited - India
- Videocon Industries ltd - India
- Coastal Gujarat Power Limited - India
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- Banpu Public Company Limited - Thailand
- Electricity Generating Authority of Thailand
- Edison Trading Spa - Italy
- Miang Besar Coal Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Cement Manufacturers Association - India
- Indonesian Coal Mining Association
- AsiaOL BioFuels Corp., Philippines
- Tata Chemicals Ltd - India
- Maheswari Brothers Coal Limited - India
- Indogreen Group - Indonesia
- Meenaskhi Energy Private Limited - India
- Africa Commodities Group - South Africa
- Central Electricity Authority - India
- Energy Development Corp, Philippines
- Vizag Seaport Private Limited - India
- ICICI Bank Limited - India
- OPG Power Generation Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Planning Commission, India
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