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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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Monday, 04 January 21
U.S. RENEWABLE ENERGY CONSUMPTION SURPASSES COAL FOR THE FIRST TIME IN OVER 130 YEARS - EIA
In 2019, U.S. annual energy consumption from renewable sources exceeded coal consumption for the first time since before 1885, according to the U.S ...
Monday, 04 January 21
BLISS FOR SHIPOWNERS! DAMAGES MAY BE CLAIMED IN ADDITION TO DEMURRAGE FOR VOYAGE CHARTERPARTY DELAY - WFW
KNOWLEDGE TO ELEVATE
In a significant decision for the maritime sector, The Eternal Bliss[1], the English Commercial Court has resol ...
Sunday, 03 January 21
INDIA: COMMERCE MINISTRY LAUNCHES COAL IMPORT MONITORING SYSTEM - PTI
CIMS shall require importers to submit advance information in an online system for imports of items and obtain an automatic registration number by ...
Wednesday, 30 December 20
A LOOK BACK INTO 2020: THE HEADWINDS, THE TAILWINDS AND EVERYTHING IN BETWEEN - SIGNAL
There is no doubt that 2020 has been a turbulent year for commercial shipping. The coronavirus pandemic has shaken the global maritime transport. T ...
Tuesday, 29 December 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.66 PCT - XINHUA
China Taiyuan coal transaction price index stood at 134.78 points Monday, up 0.66 percent week on week.
The index, released by China ...
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- Baramulti Group, Indonesia
- Global Business Power Corporation, Philippines
- Malabar Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Alfred C Toepfer International GmbH - Germany
- PowerSource Philippines DevCo
- Semirara Mining Corp, Philippines
- Parry Sugars Refinery, India
- Coal and Oil Company - UAE
- Indonesian Coal Mining Association
- Makarim & Taira - Indonesia
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- Commonwealth Bank - Australia
- Thiess Contractors Indonesia
- GMR Energy Limited - India
- Maheswari Brothers Coal Limited - India
- Meenaskhi Energy Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Sojitz Corporation - Japan
- Bukit Baiduri Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Banpu Public Company Limited - Thailand
- Parliament of New Zealand
- Kartika Selabumi Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Madhucon Powers Ltd - India
- Indo Tambangraya Megah - Indonesia
- Indika Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
- Borneo Indobara - Indonesia
- Australian Coal Association
- Samtan Co., Ltd - South Korea
- Attock Cement Pakistan Limited
- Binh Thuan Hamico - Vietnam
- Sarangani Energy Corporation, Philippines
- Indogreen Group - Indonesia
- Chamber of Mines of South Africa
- Thai Mozambique Logistica
- Bangladesh Power Developement Board
- Cement Manufacturers Association - India
- White Energy Company Limited
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
- Lanco Infratech Ltd - India
- CIMB Investment Bank - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Bhatia International Limited - India
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- Sakthi Sugars Limited - India
- Star Paper Mills Limited - India
- Port Waratah Coal Services - Australia
- Heidelberg Cement - Germany
- Mintek Dendrill Indonesia
- Merrill Lynch Commodities Europe
- Aditya Birla Group - India
- Larsen & Toubro Limited - India
- Pendopo Energi Batubara - Indonesia
- Globalindo Alam Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- MS Steel International - UAE
- Georgia Ports Authority, United States
- Anglo American - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TeaM Sual Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Trasteel International SA, Italy
- AsiaOL BioFuels Corp., Philippines
- Goldman Sachs - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Orica Mining Services - Indonesia
- Planning Commission, India
- Electricity Generating Authority of Thailand
- The Treasury - Australian Government
- Sindya Power Generating Company Private Ltd
- Krishnapatnam Port Company Ltd. - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rashtriya Ispat Nigam Limited - India
- GVK Power & Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Central Electricity Authority - India
- Ind-Barath Power Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Leighton Contractors Pty Ltd - Australia
- Renaissance Capital - South Africa
- Global Green Power PLC Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jaiprakash Power Ventures ltd
- Holcim Trading Pte Ltd - Singapore
- Vedanta Resources Plc - India
- Bulk Trading Sa - Switzerland
- Petrochimia International Co. Ltd.- Taiwan
- Savvy Resources Ltd - HongKong
- Rio Tinto Coal - Australia
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- London Commodity Brokers - England
- Energy Link Ltd, New Zealand
- Essar Steel Hazira Ltd - India
- Deloitte Consulting - India
- Australian Commodity Traders Exchange
- Orica Australia Pty. Ltd.
- Standard Chartered Bank - UAE
- CNBM International Corporation - China
- Therma Luzon, Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Tata Chemicals Ltd - India
- Riau Bara Harum - Indonesia
- Bhushan Steel Limited - India
- Coastal Gujarat Power Limited - India
- Wilmar Investment Holdings
- Manunggal Multi Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Coal Council - USA
- Ministry of Transport, Egypt
- Indian Energy Exchange, India
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- Videocon Industries ltd - India
- Iligan Light & Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- SMG Consultants - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Marubeni Corporation - India
- Ambuja Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Posco Energy - South Korea
- Mercator Lines Limited - India
- McConnell Dowell - Australia
- Jorong Barutama Greston.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Altura Mining Limited, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Metalloyd Limited - United Kingdom
- Eastern Energy - Thailand
- Price Waterhouse Coopers - Russia
- Aboitiz Power Corporation - Philippines
- Sical Logistics Limited - India
- PTC India Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Africa Commodities Group - South Africa
- Gujarat Sidhee Cement - India
- Global Coal Blending Company Limited - Australia
- Meralco Power Generation, Philippines
- Kaltim Prima Coal - Indonesia
- The University of Queensland
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- Siam City Cement - Thailand
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- TNB Fuel Sdn Bhd - Malaysia
- Agrawal Coal Company - India
- Timah Investasi Mineral - Indoneisa
- San Jose City I Power Corp, Philippines
- Kumho Petrochemical, South Korea
- Jindal Steel & Power Ltd - India
- Sree Jayajothi Cements Limited - India
- Barasentosa Lestari - Indonesia
- The State Trading Corporation of India Ltd
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- Medco Energi Mining Internasional
- GN Power Mariveles Coal Plant, Philippines
- Straits Asia Resources Limited - Singapore
- South Luzon Thermal Energy Corporation
- Bhoruka Overseas - Indonesia
- Uttam Galva Steels Limited - India
- Independent Power Producers Association of India
- Mercuria Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- LBH Netherlands Bv - Netherlands
- Energy Development Corp, Philippines
- Minerals Council of Australia
- Xindia Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- PNOC Exploration Corporation - Philippines
- Economic Council, Georgia
- Miang Besar Coal Terminal - Indonesia
- Interocean Group of Companies - India
- Kideco Jaya Agung - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Singapore Mercantile Exchange
- Ceylon Electricity Board - Sri Lanka
- Electricity Authority, New Zealand
- New Zealand Coal & Carbon
- Vizag Seaport Private Limited - India
- Siam City Cement PLC, Thailand
- Directorate Of Revenue Intelligence - India
- Dalmia Cement Bharat India
- Kobexindo Tractors - Indoneisa
- ASAPP Information Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- Bukit Asam (Persero) Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
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