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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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Thursday, 21 May 20
KOMIPO INVITED BIDS FOR TOTAL 610000 MT OF LCV AND HCV COAL FOR 2H 2020
COALspot.com: South Korea’s Korea Midland Power Co. Ltd. (KOMIPO) has Issued an International Tender for 130,000 mt of 5700 NCV coal an ...
Wednesday, 20 May 20
ADARO ENERGY BOOKED A 5% INCREASE IN COAL PRODUCTION VOLUME Y-O-Y IN 1Q2020
PT. Adaro Energy Tbk, Indonesia’s one of the largest coal miner, booked a 5% increase in coal production volume year-over-year in 1Q2020. The ...
Wednesday, 20 May 20
BRAZIL SOYBEAN EXPORTS HAVE BEEN SURGING THIS YEAR - BANCHERO COSTA
Brazil soybean exports have been surging this year, thanks to a combination of strong demand from China, a bumper crop, and favourable exchange rat ...
Wednesday, 20 May 20
MARKET INSIGHT
Seafarers keep maritime trade going so that the food, raw materials, energy and manufactured goods on which so many depend can continue moving arou ...
Tuesday, 19 May 20
AMENDMENT OF THE INDONESIAN MINING LAW: TYING UP LOOSE ENDS - UMBRA
KNOWLEDGE TO ELEVATE
The finalized draft of Law on the amendment of the Mining Law (Bill) was publicly released on 11 May 2020 and was then ap ...
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- Kepco SPC Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- Romanian Commodities Exchange
- London Commodity Brokers - England
- Jindal Steel & Power Ltd - India
- Indonesian Coal Mining Association
- Bhatia International Limited - India
- SMG Consultants - Indonesia
- Energy Development Corp, Philippines
- Orica Australia Pty. Ltd.
- Maheswari Brothers Coal Limited - India
- Jaiprakash Power Ventures ltd
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
- Power Finance Corporation Ltd., India
- Carbofer General Trading SA - India
- Wood Mackenzie - Singapore
- Renaissance Capital - South Africa
- White Energy Company Limited
- Deloitte Consulting - India
- Chamber of Mines of South Africa
- Mintek Dendrill Indonesia
- Electricity Authority, New Zealand
- Indogreen Group - Indonesia
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Cement Manufacturers Association - India
- Wilmar Investment Holdings
- India Bulls Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- South Luzon Thermal Energy Corporation
- The University of Queensland
- Grasim Industreis Ltd - India
- Trasteel International SA, Italy
- Mercuria Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Binh Thuan Hamico - Vietnam
- Riau Bara Harum - Indonesia
- Mercator Lines Limited - India
- Intertek Mineral Services - Indonesia
- Thai Mozambique Logistica
- McConnell Dowell - Australia
- Indika Energy - Indonesia
- Eastern Energy - Thailand
- Kobexindo Tractors - Indoneisa
- IHS Mccloskey Coal Group - USA
- Gujarat Sidhee Cement - India
- TeaM Sual Corporation - Philippines
- CNBM International Corporation - China
- Interocean Group of Companies - India
- Attock Cement Pakistan Limited
- Standard Chartered Bank - UAE
- GAC Shipping (India) Pvt Ltd
- Barasentosa Lestari - Indonesia
- Ministry of Mines - Canada
- Tata Chemicals Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Karbindo Abesyapradhi - Indoneisa
- Heidelberg Cement - Germany
- Indian Oil Corporation Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Sree Jayajothi Cements Limited - India
- Bulk Trading Sa - Switzerland
- Leighton Contractors Pty Ltd - Australia
- MS Steel International - UAE
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
- The Treasury - Australian Government
- Maharashtra Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Minerals Council of Australia
- Orica Mining Services - Indonesia
- Central Electricity Authority - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- New Zealand Coal & Carbon
- Ministry of Transport, Egypt
- PowerSource Philippines DevCo
- Kalimantan Lumbung Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Lanco Infratech Ltd - India
- Port Waratah Coal Services - Australia
- Mjunction Services Limited - India
- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
- Aboitiz Power Corporation - Philippines
- ASAPP Information Group - India
- Bayan Resources Tbk. - Indonesia
- Petron Corporation, Philippines
- Uttam Galva Steels Limited - India
- Semirara Mining Corp, Philippines
- Savvy Resources Ltd - HongKong
- Economic Council, Georgia
- Neyveli Lignite Corporation Ltd, - India
- Meralco Power Generation, Philippines
- Australian Commodity Traders Exchange
- International Coal Ventures Pvt Ltd - India
- Latin American Coal - Colombia
- Africa Commodities Group - South Africa
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Georgia Ports Authority, United States
- Planning Commission, India
- Holcim Trading Pte Ltd - Singapore
- Karaikal Port Pvt Ltd - India
- Siam City Cement - Thailand
- Bangladesh Power Developement Board
- Sakthi Sugars Limited - India
- Semirara Mining and Power Corporation, Philippines
- Parliament of New Zealand
- The State Trading Corporation of India Ltd
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Global Business Power Corporation, Philippines
- Parry Sugars Refinery, India
- Aditya Birla Group - India
- Goldman Sachs - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Coalindo Energy - Indonesia
- Indian Energy Exchange, India
- Makarim & Taira - Indonesia
- Banpu Public Company Limited - Thailand
- Sinarmas Energy and Mining - Indonesia
- Vizag Seaport Private Limited - India
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Toyota Tsusho Corporation, Japan
- Iligan Light & Power Inc, Philippines
- Bhushan Steel Limited - India
- Edison Trading Spa - Italy
- Vedanta Resources Plc - India
- SN Aboitiz Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Commonwealth Bank - Australia
- Directorate Of Revenue Intelligence - India
- Gujarat Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Dalmia Cement Bharat India
- Xindia Steels Limited - India
- Kideco Jaya Agung - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- GVK Power & Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Anglo American - United Kingdom
- Timah Investasi Mineral - Indoneisa
- Larsen & Toubro Limited - India
- Simpson Spence & Young - Indonesia
- Rio Tinto Coal - Australia
- Marubeni Corporation - India
- Bukit Makmur.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Australian Coal Association
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- Kaltim Prima Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Manunggal Multi Energi - Indonesia
- Coastal Gujarat Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Singapore Mercantile Exchange
- Kartika Selabumi Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Altura Mining Limited, Indonesia
- Energy Link Ltd, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Coal Council - USA
- Central Java Power - Indonesia
- Indo Tambangraya Megah - Indonesia
- Therma Luzon, Inc, Philippines
- SMC Global Power, Philippines
- Meenaskhi Energy Private Limited - India
- Price Waterhouse Coopers - Russia
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- Borneo Indobara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Coal Blending Company Limited - Australia
- Sindya Power Generating Company Private Ltd
- Oldendorff Carriers - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Asmin Koalindo Tuhup - Indonesia
- ICICI Bank Limited - India
- VISA Power Limited - India
- Independent Power Producers Association of India
- Jorong Barutama Greston.PT - Indonesia
- Kumho Petrochemical, South Korea
- CIMB Investment Bank - Malaysia
- Baramulti Group, Indonesia
- Essar Steel Hazira Ltd - India
- European Bulk Services B.V. - Netherlands
- Star Paper Mills Limited - India
- Bhoruka Overseas - Indonesia
- Medco Energi Mining Internasional
- Coal and Oil Company - UAE
- Madhucon Powers Ltd - India
- IEA Clean Coal Centre - UK
- Global Green Power PLC Corporation, Philippines
- Videocon Industries ltd - India
- Alfred C Toepfer International GmbH - Germany
- Pendopo Energi Batubara - Indonesia
- Salva Resources Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Ambuja Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
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