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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, 18 March 20
SHIPPING MARKET INSIGHT - INTERMODAL
Despite we all knew about the Covid-19 weeks ago, few could realize the size of the thread until the last few days. The examples of China and Italy ...
Tuesday, 17 March 20
IT IS NOW UNQUESTIONABLE THAT 2020 WILL BE A MILESTONE YEAR FOR THE OIL MARKET, AS WELL AS THE WHOLE GLOBAL ECONOMY - ALLIED
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Tuesday, 17 March 20
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Monday, 16 March 20
ULTRAMAX: S8 INDONESIA-INDIA AND S10 INDONESIA-CHINA ROUTES BOTH POSTED GAINS OF $1,412, AND $1,289 ON THE WEEK, TO CLOSE AT $5,575, AND $6,089 RESPECTIVELY - BALTIC BRIEFING
Capesize
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Sunday, 15 March 20
CAPTIVE COAL OUTPUT RISES 19% IN APRIL-FEBRUARY - FINANCIAL EXPRESS
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- Kapuas Tunggal Persada - Indonesia
- Baramulti Group, Indonesia
- Coal and Oil Company - UAE
- Energy Development Corp, Philippines
- Central Electricity Authority - India
- Rashtriya Ispat Nigam Limited - India
- AsiaOL BioFuels Corp., Philippines
- PowerSource Philippines DevCo
- Borneo Indobara - Indonesia
- Riau Bara Harum - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Authority, New Zealand
- Directorate Of Revenue Intelligence - India
- Ministry of Transport, Egypt
- VISA Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Standard Chartered Bank - UAE
- PetroVietnam Power Coal Import and Supply Company
- Sarangani Energy Corporation, Philippines
- GVK Power & Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Siam City Cement PLC, Thailand
- Energy Link Ltd, New Zealand
- Tamil Nadu electricity Board
- Star Paper Mills Limited - India
- Trasteel International SA, Italy
- Merrill Lynch Commodities Europe
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMC Global Power, Philippines
- Kartika Selabumi Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Commonwealth Bank - Australia
- Meenaskhi Energy Private Limited - India
- The State Trading Corporation of India Ltd
- Grasim Industreis Ltd - India
- Simpson Spence & Young - Indonesia
- Economic Council, Georgia
- Indonesian Coal Mining Association
- ASAPP Information Group - India
- Binh Thuan Hamico - Vietnam
- Indika Energy - Indonesia
- Sical Logistics Limited - India
- Holcim Trading Pte Ltd - Singapore
- Australian Commodity Traders Exchange
- Timah Investasi Mineral - Indoneisa
- Agrawal Coal Company - India
- Videocon Industries ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Medco Energi Mining Internasional
- Gujarat Sidhee Cement - India
- Central Java Power - Indonesia
- SMG Consultants - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- Singapore Mercantile Exchange
- Miang Besar Coal Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Carbofer General Trading SA - India
- Krishnapatnam Port Company Ltd. - India
- Savvy Resources Ltd - HongKong
- GMR Energy Limited - India
- India Bulls Power Limited - India
- Mercator Lines Limited - India
- European Bulk Services B.V. - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Sindya Power Generating Company Private Ltd
- Rio Tinto Coal - Australia
- White Energy Company Limited
- Ministry of Finance - Indonesia
- Metalloyd Limited - United Kingdom
- Madhucon Powers Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- LBH Netherlands Bv - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Therma Luzon, Inc, Philippines
- Straits Asia Resources Limited - Singapore
- ICICI Bank Limited - India
- Makarim & Taira - Indonesia
- MS Steel International - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mjunction Services Limited - India
- Semirara Mining Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Marubeni Corporation - India
- PTC India Limited - India
- Ceylon Electricity Board - Sri Lanka
- Bangladesh Power Developement Board
- Larsen & Toubro Limited - India
- Intertek Mineral Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Global Business Power Corporation, Philippines
- Dalmia Cement Bharat India
- Karbindo Abesyapradhi - Indoneisa
- Power Finance Corporation Ltd., India
- Semirara Mining and Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- Formosa Plastics Group - Taiwan
- Anglo American - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- Minerals Council of Australia
- McConnell Dowell - Australia
- Barasentosa Lestari - Indonesia
- Globalindo Alam Lestari - Indonesia
- CNBM International Corporation - China
- Aditya Birla Group - India
- Chettinad Cement Corporation Ltd - India
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Alfred C Toepfer International GmbH - Germany
- Malabar Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Bukit Makmur.PT - Indonesia
- Goldman Sachs - Singapore
- Latin American Coal - Colombia
- Bhoruka Overseas - Indonesia
- Lanco Infratech Ltd - India
- Petron Corporation, Philippines
- Orica Australia Pty. Ltd.
- London Commodity Brokers - England
- Toyota Tsusho Corporation, Japan
- Jindal Steel & Power Ltd - India
- Independent Power Producers Association of India
- Orica Mining Services - Indonesia
- Antam Resourcindo - Indonesia
- Siam City Cement - Thailand
- Parry Sugars Refinery, India
- GAC Shipping (India) Pvt Ltd
- Maharashtra Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- TeaM Sual Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Bhatia International Limited - India
- Bulk Trading Sa - Switzerland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Baiduri Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Vedanta Resources Plc - India
- International Coal Ventures Pvt Ltd - India
- Georgia Ports Authority, United States
- Meralco Power Generation, Philippines
- Essar Steel Hazira Ltd - India
- Uttam Galva Steels Limited - India
- Interocean Group of Companies - India
- Electricity Generating Authority of Thailand
- CIMB Investment Bank - Malaysia
- Karaikal Port Pvt Ltd - India
- Wilmar Investment Holdings
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- Jorong Barutama Greston.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Tata Chemicals Ltd - India
- Planning Commission, India
- New Zealand Coal & Carbon
- SN Aboitiz Power Inc, Philippines
- Edison Trading Spa - Italy
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Eastern Energy - Thailand
- OPG Power Generation Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Ambuja Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Sree Jayajothi Cements Limited - India
- Ind-Barath Power Infra Limited - India
- IEA Clean Coal Centre - UK
- Vijayanagar Sugar Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- The University of Queensland
- Aboitiz Power Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Coalindo Energy - Indonesia
- Port Waratah Coal Services - Australia
- Attock Cement Pakistan Limited
- Ministry of Mines - Canada
- Bharathi Cement Corporation - India
- Samtan Co., Ltd - South Korea
- Sakthi Sugars Limited - India
- Cement Manufacturers Association - India
- Indogreen Group - Indonesia
- The Treasury - Australian Government
- Bayan Resources Tbk. - Indonesia
- Indian Oil Corporation Limited
- Wood Mackenzie - Singapore
- Posco Energy - South Korea
- Australian Coal Association
- San Jose City I Power Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Global Green Power PLC Corporation, Philippines
- Bhushan Steel Limited - India
- Coastal Gujarat Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mintek Dendrill Indonesia
- Thiess Contractors Indonesia
- Chamber of Mines of South Africa
- Directorate General of MIneral and Coal - Indonesia
- Romanian Commodities Exchange
- Sinarmas Energy and Mining - Indonesia
- Parliament of New Zealand
- Thai Mozambique Logistica
- Deloitte Consulting - India
- Kideco Jaya Agung - Indonesia
- Renaissance Capital - South Africa
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