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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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Wednesday, 12 May 21
U.S. COAL PRODUCTION TO INCREASE BY 43 MMST IN 2021 TOTAL 582 MILLION SHORT TONS - EIA
U.S. energy Information Administration expects U.S. coal production to total 582 million short tons (MMst) in 2021, 43 MMst (8%) more than in 2020. ...
Wednesday, 12 May 21
MARKET INSIGHT - INTERMODAL
Tanker S&P is finally back!
For an extended period, Dry bulk & Wet market rates have been diverging, with the SnP deals on each sect ...
Monday, 10 May 21
PAKISTAN: COAL GASIFICATION AND LIQUEFACTION HARMFUL TO ECONOMY - IEEFA
There is no second life for coal
Pakistan’s intention to use coal for power production through gasification and liquefaction technologie ...
Sunday, 09 May 21
HERE'S WHY INVESTORS ARE POURING MONEY INTO COAL, DESPITE ITS BLEAK FUTURE - FORBES
Coal stocks have surged this year – along with the wider energy sector – but experts warn these are likely short-term gains for an indu ...
Sunday, 09 May 21
MAYBANK TO STOP COAL FINANCING - BERNAMA
Malayan Banking Bhd (Maybank) will stop financing new coal activities as part of its sustainable agenda.
Currently, coal financing m ...
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- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Jindal Steel & Power Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- European Bulk Services B.V. - Netherlands
- Independent Power Producers Association of India
- Australian Coal Association
- Toyota Tsusho Corporation, Japan
- Metalloyd Limited - United Kingdom
- Kaltim Prima Coal - Indonesia
- IEA Clean Coal Centre - UK
- Semirara Mining and Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Uttam Galva Steels Limited - India
- Ministry of Mines - Canada
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- Videocon Industries ltd - India
- Madhucon Powers Ltd - India
- Lanco Infratech Ltd - India
- GAC Shipping (India) Pvt Ltd
- Chettinad Cement Corporation Ltd - India
- Mintek Dendrill Indonesia
- Iligan Light & Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Agrawal Coal Company - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Indonesian Coal Mining Association
- Xindia Steels Limited - India
- Bharathi Cement Corporation - India
- ICICI Bank Limited - India
- Wood Mackenzie - Singapore
- Antam Resourcindo - Indonesia
- Meralco Power Generation, Philippines
- Malabar Cements Ltd - India
- Therma Luzon, Inc, Philippines
- Bangladesh Power Developement Board
- Tata Chemicals Ltd - India
- Australian Commodity Traders Exchange
- Energy Link Ltd, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Trasteel International SA, Italy
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Samtan Co., Ltd - South Korea
- Sarangani Energy Corporation, Philippines
- PowerSource Philippines DevCo
- Vedanta Resources Plc - India
- Kartika Selabumi Mining - Indonesia
- Energy Development Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Bulk Trading Sa - Switzerland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bayan Resources Tbk. - Indonesia
- Kumho Petrochemical, South Korea
- Minerals Council of Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Wilmar Investment Holdings
- Rashtriya Ispat Nigam Limited - India
- Port Waratah Coal Services - Australia
- Indogreen Group - Indonesia
- Tamil Nadu electricity Board
- Economic Council, Georgia
- PNOC Exploration Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bhushan Steel Limited - India
- Indo Tambangraya Megah - Indonesia
- Medco Energi Mining Internasional
- Planning Commission, India
- Parliament of New Zealand
- Deloitte Consulting - India
- Holcim Trading Pte Ltd - Singapore
- Thai Mozambique Logistica
- Kobexindo Tractors - Indoneisa
- Pendopo Energi Batubara - Indonesia
- New Zealand Coal & Carbon
- Star Paper Mills Limited - India
- Ministry of Transport, Egypt
- Directorate Of Revenue Intelligence - India
- Central Java Power - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The State Trading Corporation of India Ltd
- Gujarat Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Marubeni Corporation - India
- Indian Oil Corporation Limited
- Ceylon Electricity Board - Sri Lanka
- Carbofer General Trading SA - India
- Asmin Koalindo Tuhup - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sojitz Corporation - Japan
- Borneo Indobara - Indonesia
- Baramulti Group, Indonesia
- Romanian Commodities Exchange
- Rio Tinto Coal - Australia
- GMR Energy Limited - India
- Latin American Coal - Colombia
- Parry Sugars Refinery, India
- Central Electricity Authority - India
- Commonwealth Bank - Australia
- Leighton Contractors Pty Ltd - Australia
- Renaissance Capital - South Africa
- The University of Queensland
- SMG Consultants - Indonesia
- Price Waterhouse Coopers - Russia
- PetroVietnam Power Coal Import and Supply Company
- Bukit Makmur.PT - Indonesia
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- Manunggal Multi Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Coastal Gujarat Power Limited - India
- Aditya Birla Group - India
- Electricity Generating Authority of Thailand
- Karaikal Port Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- VISA Power Limited - India
- The Treasury - Australian Government
- Asia Pacific Energy Resources Ventures Inc, Philippines
- London Commodity Brokers - England
- Krishnapatnam Port Company Ltd. - India
- White Energy Company Limited
- Bukit Baiduri Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Edison Trading Spa - Italy
- San Jose City I Power Corp, Philippines
- Goldman Sachs - Singapore
- Oldendorff Carriers - Singapore
- Global Business Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- Eastern Coal Council - USA
- Semirara Mining Corp, Philippines
- Interocean Group of Companies - India
- Banpu Public Company Limited - Thailand
- Sree Jayajothi Cements Limited - India
- SMC Global Power, Philippines
- IHS Mccloskey Coal Group - USA
- Meenaskhi Energy Private Limited - India
- South Luzon Thermal Energy Corporation
- Attock Cement Pakistan Limited
- TeaM Sual Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- MS Steel International - UAE
- Eastern Energy - Thailand
- Bhoruka Overseas - Indonesia
- International Coal Ventures Pvt Ltd - India
- Electricity Authority, New Zealand
- Sakthi Sugars Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kideco Jaya Agung - Indonesia
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- Mjunction Services Limited - India
- Petron Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Directorate General of MIneral and Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Georgia Ports Authority, United States
- Grasim Industreis Ltd - India
- Mercuria Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Standard Chartered Bank - UAE
- Power Finance Corporation Ltd., India
- TNB Fuel Sdn Bhd - Malaysia
- Global Coal Blending Company Limited - Australia
- CNBM International Corporation - China
- Kepco SPC Power Corporation, Philippines
- Heidelberg Cement - Germany
- Cement Manufacturers Association - India
- Coal and Oil Company - UAE
- Binh Thuan Hamico - Vietnam
- Riau Bara Harum - Indonesia
- Ministry of Finance - Indonesia
- Intertek Mineral Services - Indonesia
- Makarim & Taira - Indonesia
- Orica Australia Pty. Ltd.
- Chamber of Mines of South Africa
- GN Power Mariveles Coal Plant, Philippines
- Larsen & Toubro Limited - India
- PTC India Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Ambuja Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Indian Energy Exchange, India
- Gujarat Mineral Development Corp Ltd - India
- Vizag Seaport Private Limited - India
- India Bulls Power Limited - India
- Aboitiz Power Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Altura Mining Limited, Indonesia
- Singapore Mercantile Exchange
- Posco Energy - South Korea
- Sindya Power Generating Company Private Ltd
- Anglo American - United Kingdom
- Orica Mining Services - Indonesia
- CIMB Investment Bank - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Neyveli Lignite Corporation Ltd, - India
- Petrochimia International Co. Ltd.- Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Merrill Lynch Commodities Europe
- OPG Power Generation Pvt Ltd - India
- Mercator Lines Limited - India
- Salva Resources Pvt Ltd - India
- Coalindo Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
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