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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, 19 August 20
COAL INDIA TRADE UNIONS DEFER DAY-LONG STRIKE: PTI
The unions had decided to go on strike against the commercial mining and the proposed divestment or buyback of shares of Coal India Ltd (CIL).
...
Wednesday, 19 August 20
MISC MARKS ITS MAIDEN FORAY INTO MAJOR DEEP-WATER PROJECT IN LATIN AMERICA WITH MERO 3 FPSO
MISC Berhad (MISC) is pleased to announce its acceptance of Letter of Intent (LOI) from Petróleo Brasileiro S.A. (Petrobras) for the provisi ...
Wednesday, 19 August 20
MARKET INSIGHT - GEORGE LAIOS | INTERMODAL
Since the Covid-19 outbreak, governments and central banks around the globe have been using their ammunition and stimulus packages to keep their ec ...
Wednesday, 19 August 20
INDIA SAW A SHARP DECLINE IN ENERGY COAL IMPORTS IN JANUARY - JUNE 2020; –27 PER CENT YOY - BHP
Energy coal prices were weak in the second half of financial year 2020, BHP says in its Economic and Commodity Outlook FY20.
Accordi ...
Wednesday, 19 August 20
COAL PRICES TO REMAIN SUBDUED THIS FISCAL AMID WEAK DEMAND, HIGH INVENTORY - THE HINDU BUSINESS LINE
Coal offtake is improving gradually as lockdown eases
Coal prices are expected to remain subdued to weak demand and high inventory l ...
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- Merrill Lynch Commodities Europe
- Coal and Oil Company - UAE
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- Mintek Dendrill Indonesia
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- Mjunction Services Limited - India
- Chettinad Cement Corporation Ltd - India
- Indogreen Group - Indonesia
- Planning Commission, India
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- Energy Link Ltd, New Zealand
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- Eastern Coal Council - USA
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- Coalindo Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Georgia Ports Authority, United States
- Sakthi Sugars Limited - India
- Central Java Power - Indonesia
- Barasentosa Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Wilmar Investment Holdings
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- Parliament of New Zealand
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- Semirara Mining and Power Corporation, Philippines
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Baramulti Group, Indonesia
- Sojitz Corporation - Japan
- Xindia Steels Limited - India
- Edison Trading Spa - Italy
- Intertek Mineral Services - Indonesia
- Power Finance Corporation Ltd., India
- Economic Council, Georgia
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- Australian Coal Association
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- SN Aboitiz Power Inc, Philippines
- Anglo American - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Global Coal Blending Company Limited - Australia
- Bayan Resources Tbk. - Indonesia
- Wood Mackenzie - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kepco SPC Power Corporation, Philippines
- Goldman Sachs - Singapore
- London Commodity Brokers - England
- Metalloyd Limited - United Kingdom
- Central Electricity Authority - India
- Indo Tambangraya Megah - Indonesia
- ICICI Bank Limited - India
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- Indonesian Coal Mining Association
- Sinarmas Energy and Mining - Indonesia
- The Treasury - Australian Government
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- Globalindo Alam Lestari - Indonesia
- Indian Oil Corporation Limited
- Standard Chartered Bank - UAE
- Eastern Energy - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Makmur.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- IEA Clean Coal Centre - UK
- Interocean Group of Companies - India
- Asmin Koalindo Tuhup - Indonesia
- Trasteel International SA, Italy
- South Luzon Thermal Energy Corporation
- Chamber of Mines of South Africa
- Latin American Coal - Colombia
- Kumho Petrochemical, South Korea
- Neyveli Lignite Corporation Ltd, - India
- Electricity Generating Authority of Thailand
- Bhushan Steel Limited - India
- Sical Logistics Limited - India
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Oldendorff Carriers - Singapore
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- GMR Energy Limited - India
- Videocon Industries ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Tata Chemicals Ltd - India
- VISA Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Sarangani Energy Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- New Zealand Coal & Carbon
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- Bharathi Cement Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Agrawal Coal Company - India
- Ministry of Mines - Canada
- Mercuria Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Thai Mozambique Logistica
- MS Steel International - UAE
- SMG Consultants - Indonesia
- Independent Power Producers Association of India
- Makarim & Taira - Indonesia
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- McConnell Dowell - Australia
- Ministry of Transport, Egypt
- Iligan Light & Power Inc, Philippines
- Orica Australia Pty. Ltd.
- OPG Power Generation Pvt Ltd - India
- Renaissance Capital - South Africa
- Carbofer General Trading SA - India
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Savvy Resources Ltd - HongKong
- Salva Resources Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Lanco Infratech Ltd - India
- Deloitte Consulting - India
- Ceylon Electricity Board - Sri Lanka
- Binh Thuan Hamico - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Bukit Asam (Persero) Tbk - Indonesia
- Posco Energy - South Korea
- GVK Power & Infra Limited - India
- Port Waratah Coal Services - Australia
- Aboitiz Power Corporation - Philippines
- Africa Commodities Group - South Africa
- Kartika Selabumi Mining - Indonesia
- Indian Energy Exchange, India
- Bangladesh Power Developement Board
- Global Business Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
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- Electricity Authority, New Zealand
- CIMB Investment Bank - Malaysia
- PTC India Limited - India
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- Toyota Tsusho Corporation, Japan
- Heidelberg Cement - Germany
- Samtan Co., Ltd - South Korea
- Petron Corporation, Philippines
- The State Trading Corporation of India Ltd
- Jindal Steel & Power Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karbindo Abesyapradhi - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Australian Commodity Traders Exchange
- Attock Cement Pakistan Limited
- India Bulls Power Limited - India
- Meenaskhi Energy Private Limited - India
- Indika Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Coastal Gujarat Power Limited - India
- Meralco Power Generation, Philippines
- IHS Mccloskey Coal Group - USA
- Timah Investasi Mineral - Indoneisa
- Energy Development Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Cement Manufacturers Association - India
- Gujarat Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sindya Power Generating Company Private Ltd
- Bhatia International Limited - India
- Malabar Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Manunggal Multi Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- PowerSource Philippines DevCo
- Tamil Nadu electricity Board
- CNBM International Corporation - China
- LBH Netherlands Bv - Netherlands
- Ministry of Finance - Indonesia
- Bulk Trading Sa - Switzerland
- Straits Asia Resources Limited - Singapore
- Vizag Seaport Private Limited - India
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- European Bulk Services B.V. - Netherlands
- International Coal Ventures Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement - Thailand
- Price Waterhouse Coopers - Russia
- Aditya Birla Group - India
- Uttam Galva Steels Limited - India
- Larsen & Toubro Limited - India
- Commonwealth Bank - Australia
- Star Paper Mills Limited - India
- Formosa Plastics Group - Taiwan
- Dalmia Cement Bharat India
- Bukit Baiduri Energy - Indonesia
- Romanian Commodities Exchange
- GAC Shipping (India) Pvt Ltd
- Antam Resourcindo - Indonesia
- Siam City Cement PLC, Thailand
- SMC Global Power, Philippines
- The University of Queensland
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