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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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Saturday, 09 May 20
ANGLO AMERICAN CONSIDERS SPINNING OFF SOUTH AFRICAN COAL OPERATIONS - REUTERS
Diversified miner Anglo American said on Thursday it prefers unbundling and listing its thermal coal operations in South Africa on the Johannesburg ...
Friday, 08 May 20
THE COLLAPSE OF THE OIL AND BUNKER FUEL MARKETS IN EARLY 2020 - PETER SAND
The sulphur regulation from the International Maritime Organization (IMO) that came into force on 1 January 2020 took the centre stage in the shipp ...
Friday, 08 May 20
LNG DEMAND FACED SEVERAL HEADWINDS IN THE FIRST QUARTER OF 2020 - GASLOG
LNG demand faced several headwinds in the first quarter of 2020 including a warmer than average winter in the northern hemisphere, high inventory l ...
Thursday, 07 May 20
IEEFA UPDATE: THE OUTLOOK FOR THERMAL COAL IN SOUTHEAST ASIA AND SOUTH ASIA
Seven headwinds are building to sustained growth in coal in Asia
The medium term outlook for thermal coal in Southeast Asia is posit ...
Thursday, 07 May 20
IMO 2020: BUNKER CLAIMS HANDLING GUIDE FOR A NEW DECADE - THE STANDARD CLUB
KNOWLEDGE TO ELEVATE
IMO 2020 is the term generally used to describe the following regulations under Annex VI of the International Convention ...
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- Siam City Cement - Thailand
- Anglo American - United Kingdom
- Attock Cement Pakistan Limited
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- Vedanta Resources Plc - India
- Planning Commission, India
- Star Paper Mills Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
- IEA Clean Coal Centre - UK
- International Coal Ventures Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Eastern Coal Council - USA
- AsiaOL BioFuels Corp., Philippines
- Eastern Energy - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Economic Council, Georgia
- Kapuas Tunggal Persada - Indonesia
- Toyota Tsusho Corporation, Japan
- IHS Mccloskey Coal Group - USA
- Simpson Spence & Young - Indonesia
- Central Electricity Authority - India
- Price Waterhouse Coopers - Russia
- Semirara Mining and Power Corporation, Philippines
- The University of Queensland
- Romanian Commodities Exchange
- Agrawal Coal Company - India
- Kobexindo Tractors - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Goldman Sachs - Singapore
- Leighton Contractors Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Antam Resourcindo - Indonesia
- TeaM Sual Corporation - Philippines
- Bhushan Steel Limited - India
- Edison Trading Spa - Italy
- Billiton Holdings Pty Ltd - Australia
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- GAC Shipping (India) Pvt Ltd
- Kumho Petrochemical, South Korea
- Therma Luzon, Inc, Philippines
- Indonesian Coal Mining Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Port Waratah Coal Services - Australia
- Lanco Infratech Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMG Consultants - Indonesia
- Dalmia Cement Bharat India
- Bahari Cakrawala Sebuku - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Metalloyd Limited - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
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- Oldendorff Carriers - Singapore
- Semirara Mining Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Globalindo Alam Lestari - Indonesia
- Coal and Oil Company - UAE
- Krishnapatnam Port Company Ltd. - India
- Chettinad Cement Corporation Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Ministry of Finance - Indonesia
- Rio Tinto Coal - Australia
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Singapore Mercantile Exchange
- Minerals Council of Australia
- Interocean Group of Companies - India
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- Chamber of Mines of South Africa
- Meenaskhi Energy Private Limited - India
- Energy Link Ltd, New Zealand
- Xindia Steels Limited - India
- Siam City Cement PLC, Thailand
- Barasentosa Lestari - Indonesia
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Marubeni Corporation - India
- Holcim Trading Pte Ltd - Singapore
- White Energy Company Limited
- Tamil Nadu electricity Board
- Independent Power Producers Association of India
- New Zealand Coal & Carbon
- Tata Chemicals Ltd - India
- Sical Logistics Limited - India
- Parliament of New Zealand
- Ministry of Transport, Egypt
- European Bulk Services B.V. - Netherlands
- Aditya Birla Group - India
- Renaissance Capital - South Africa
- Savvy Resources Ltd - HongKong
- Central Java Power - Indonesia
- South Luzon Thermal Energy Corporation
- CIMB Investment Bank - Malaysia
- Australian Commodity Traders Exchange
- Medco Energi Mining Internasional
- Global Coal Blending Company Limited - Australia
- Cigading International Bulk Terminal - Indonesia
- Orica Australia Pty. Ltd.
- India Bulls Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Coalindo Energy - Indonesia
- Baramulti Group, Indonesia
- Bukit Baiduri Energy - Indonesia
- Madhucon Powers Ltd - India
- Sree Jayajothi Cements Limited - India
- Standard Chartered Bank - UAE
- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- Carbofer General Trading SA - India
- Timah Investasi Mineral - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asmin Koalindo Tuhup - Indonesia
- Ambuja Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Authority, New Zealand
- Intertek Mineral Services - Indonesia
- Deloitte Consulting - India
- Coastal Gujarat Power Limited - India
- Wood Mackenzie - Singapore
- Videocon Industries ltd - India
- GVK Power & Infra Limited - India
- Orica Mining Services - Indonesia
- Australian Coal Association
- Latin American Coal - Colombia
- Mjunction Services Limited - India
- Sinarmas Energy and Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Alfred C Toepfer International GmbH - Germany
- Bharathi Cement Corporation - India
- Formosa Plastics Group - Taiwan
- Kartika Selabumi Mining - Indonesia
- Energy Development Corp, Philippines
- MS Steel International - UAE
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Essar Steel Hazira Ltd - India
- Grasim Industreis Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Indika Energy - Indonesia
- Africa Commodities Group - South Africa
- Mintek Dendrill Indonesia
- Indian Oil Corporation Limited
- Wilmar Investment Holdings
- Bangladesh Power Developement Board
- Trasteel International SA, Italy
- Kepco SPC Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Makarim & Taira - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Aboitiz Power Corporation - Philippines
- McConnell Dowell - Australia
- Merrill Lynch Commodities Europe
- Gujarat Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- San Jose City I Power Corp, Philippines
- Bhoruka Overseas - Indonesia
- Jaiprakash Power Ventures ltd
- Bulk Trading Sa - Switzerland
- Banpu Public Company Limited - Thailand
- Malabar Cements Ltd - India
- Thiess Contractors Indonesia
- SN Aboitiz Power Inc, Philippines
- Cement Manufacturers Association - India
- London Commodity Brokers - England
- Jindal Steel & Power Ltd - India
- SMC Global Power, Philippines
- Uttam Galva Steels Limited - India
- Gujarat Sidhee Cement - India
- Sojitz Corporation - Japan
- Electricity Generating Authority of Thailand
- Sindya Power Generating Company Private Ltd
- Mercator Lines Limited - India
- The State Trading Corporation of India Ltd
- Mercuria Energy - Indonesia
- PowerSource Philippines DevCo
- Sarangani Energy Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Petron Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kaltim Prima Coal - Indonesia
- The Treasury - Australian Government
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- Samtan Co., Ltd - South Korea
- Ministry of Mines - Canada
- Directorate Of Revenue Intelligence - India
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- Heidelberg Cement - Germany
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- Indogreen Group - Indonesia
- Global Business Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Indo Tambangraya Megah - Indonesia
- GMR Energy Limited - India
- ASAPP Information Group - India
- Gujarat Mineral Development Corp Ltd - India
- VISA Power Limited - India
- CNBM International Corporation - China
- Commonwealth Bank - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
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