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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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Tuesday, 14 November 23
CHINA'S BELT AND ROAD INITIATIVE TURNS AWAY FROM COAL - WOOD MACKENZIE
Ambitious, contentious and big spending, China’s Belt and Road Initiative (BRI) is 10 years old. In that time, China has splashed more than U ...
Friday, 10 November 23
THE COMMODITIES FEED: OIL UNDER PRESSURE - ING
Energy – Brent plummets
The oil market came under significant pressure yesterday. ICE Brent settled 4.19% lower on the day and ...
Friday, 10 November 23
COAL USE AT U.S. POWER PLANTS CONTINUES DOWNWARD SPIRAL; FULL IMPACT ON MINES TO BE FELT IN 2024 - IEEFA
This year, the use of coal by the U.S.’s power producers has been so anemic that the fuel has not achieved a 20% market share in any month so ...
Friday, 10 November 23
INDIA: NATIONAL COAL INDEX RISES 3.83 POINTS IN SEPTEMBER AMID HIGHER DEMAND - LIVEMINT
The National Coal Index (NCI) rose 3.83 points to 143.91 in September amid growing demand for coal.
The union coal ministry on Tuesd ...
Thursday, 09 November 23
WE'RE PRODUCING TOO MUCH COAL, OIL AND GAS, REPORT SAYS - WSJ
World leaders pledged in 2015 to reduce emissions in a combined effort to limit climate change.
Now they are stepping up production ...
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- SN Aboitiz Power Inc, Philippines
- Coalindo Energy - Indonesia
- Antam Resourcindo - Indonesia
- Karaikal Port Pvt Ltd - India
- Petron Corporation, Philippines
- Altura Mining Limited, Indonesia
- Xindia Steels Limited - India
- Malabar Cements Ltd - India
- Sojitz Corporation - Japan
- London Commodity Brokers - England
- Medco Energi Mining Internasional
- Iligan Light & Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Uttam Galva Steels Limited - India
- Aditya Birla Group - India
- Baramulti Group, Indonesia
- Directorate Of Revenue Intelligence - India
- GVK Power & Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Toyota Tsusho Corporation, Japan
- Gujarat Mineral Development Corp Ltd - India
- Sindya Power Generating Company Private Ltd
- Cigading International Bulk Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Chettinad Cement Corporation Ltd - India
- Jaiprakash Power Ventures ltd
- Energy Development Corp, Philippines
- SMG Consultants - Indonesia
- Power Finance Corporation Ltd., India
- Bhatia International Limited - India
- PowerSource Philippines DevCo
- Banpu Public Company Limited - Thailand
- New Zealand Coal & Carbon
- Riau Bara Harum - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Madhucon Powers Ltd - India
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Heidelberg Cement - Germany
- Port Waratah Coal Services - Australia
- Simpson Spence & Young - Indonesia
- Kobexindo Tractors - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Central Java Power - Indonesia
- Tamil Nadu electricity Board
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- IHS Mccloskey Coal Group - USA
- Parliament of New Zealand
- Indika Energy - Indonesia
- Merrill Lynch Commodities Europe
- Romanian Commodities Exchange
- PTC India Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Minerals Council of Australia
- Parry Sugars Refinery, India
- Kumho Petrochemical, South Korea
- Electricity Authority, New Zealand
- MS Steel International - UAE
- Maheswari Brothers Coal Limited - India
- Indo Tambangraya Megah - Indonesia
- Agrawal Coal Company - India
- Metalloyd Limited - United Kingdom
- VISA Power Limited - India
- Bhushan Steel Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- Savvy Resources Ltd - HongKong
- ICICI Bank Limited - India
- Anglo American - United Kingdom
- Siam City Cement PLC, Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kaltim Prima Coal - Indonesia
- Thai Mozambique Logistica
- Borneo Indobara - Indonesia
- Renaissance Capital - South Africa
- Price Waterhouse Coopers - Russia
- Intertek Mineral Services - Indonesia
- Commonwealth Bank - Australia
- Directorate General of MIneral and Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Videocon Industries ltd - India
- Lanco Infratech Ltd - India
- Formosa Plastics Group - Taiwan
- Krishnapatnam Port Company Ltd. - India
- Salva Resources Pvt Ltd - India
- CNBM International Corporation - China
- Electricity Generating Authority of Thailand
- Ministry of Transport, Egypt
- Sinarmas Energy and Mining - Indonesia
- Energy Link Ltd, New Zealand
- Vizag Seaport Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- European Bulk Services B.V. - Netherlands
- Thiess Contractors Indonesia
- Posco Energy - South Korea
- Ind-Barath Power Infra Limited - India
- Mjunction Services Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Planning Commission, India
- SMC Global Power, Philippines
- IEA Clean Coal Centre - UK
- Semirara Mining and Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Orica Mining Services - Indonesia
- Grasim Industreis Ltd - India
- PNOC Exploration Corporation - Philippines
- Bhoruka Overseas - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Global Coal Blending Company Limited - Australia
- Independent Power Producers Association of India
- Sakthi Sugars Limited - India
- Bangladesh Power Developement Board
- Australian Coal Association
- Orica Australia Pty. Ltd.
- OPG Power Generation Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Singapore Mercantile Exchange
- Kapuas Tunggal Persada - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- Sical Logistics Limited - India
- The University of Queensland
- Barasentosa Lestari - Indonesia
- Globalindo Alam Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Star Paper Mills Limited - India
- Eastern Coal Council - USA
- GAC Shipping (India) Pvt Ltd
- The Treasury - Australian Government
- Wilmar Investment Holdings
- Indogreen Group - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Finance - Indonesia
- Mintek Dendrill Indonesia
- Dalmia Cement Bharat India
- Coal and Oil Company - UAE
- Rio Tinto Coal - Australia
- Mercuria Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Bharathi Cement Corporation - India
- Tata Chemicals Ltd - India
- India Bulls Power Limited - India
- GMR Energy Limited - India
- TeaM Sual Corporation - Philippines
- Latin American Coal - Colombia
- The State Trading Corporation of India Ltd
- Indonesian Coal Mining Association
- Samtan Co., Ltd - South Korea
- Essar Steel Hazira Ltd - India
- Binh Thuan Hamico - Vietnam
- Standard Chartered Bank - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Coastal Gujarat Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Mercator Lines Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- McConnell Dowell - Australia
- Trasteel International SA, Italy
- Georgia Ports Authority, United States
- Attock Cement Pakistan Limited
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- Kepco SPC Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Indian Oil Corporation Limited
- Oldendorff Carriers - Singapore
- Ambuja Cements Ltd - India
- Ministry of Mines - Canada
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meralco Power Generation, Philippines
- Wood Mackenzie - Singapore
- Kideco Jaya Agung - Indonesia
- Cement Manufacturers Association - India
- Rashtriya Ispat Nigam Limited - India
- Larsen & Toubro Limited - India
- Ceylon Electricity Board - Sri Lanka
- Marubeni Corporation - India
- AsiaOL BioFuels Corp., Philippines
- Goldman Sachs - Singapore
- Semirara Mining Corp, Philippines
- San Jose City I Power Corp, Philippines
- Edison Trading Spa - Italy
- Gujarat Sidhee Cement - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- Vedanta Resources Plc - India
- GN Power Mariveles Coal Plant, Philippines
- White Energy Company Limited
- Bulk Trading Sa - Switzerland
- Sarangani Energy Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- Economic Council, Georgia
- Global Green Power PLC Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Indian Energy Exchange, India
- Vijayanagar Sugar Pvt Ltd - India
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- Siam City Cement - Thailand
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