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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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Friday, 02 November 18
COAL FETCHES 102% PREMIUM IN E-AUCTION, SURPASSING THE EARLIER HIGHEST OF 95% - FINANCIAL EXPRESS
Coal prices have received a premium of 102% in spot e-auction during September 2018, surpassing the earlier highest of 95% premium during the spot ...
Friday, 02 November 18
CHINA: COAL CONSUMPTION POSTS STRONG GROWTH ON BACK OF POWER GENERATION DEMAND - CHINA DAILY
China’s energy consumption experienced continuous rebound during the first three quarters in 2018, National Energy Administration announced o ...
Thursday, 01 November 18
IMO 2020 - EXPLORING THE OPTION OF SOX SCRUBBERS - SIDDHARTH MAHAJAN, GARD
KNOWLEDGE TO ELEVATE
There are four possible methods of compliance:
1.use VLSFO (very low Sulphur oil) or blends;
2,use dis ...
Wednesday, 31 October 18
INDIA: COAL IMPORTS SURGE ON DOMESTIC SHORT SUPPLY - HINDU
Shortage of thermal coal supply in India has pushed imports up to 85 million tonnes (mt) in the first half of the current fiscal compared to 75 mt ...
Wednesday, 31 October 18
SHIPPING MARKET INSIGHT - APOSTOLOS ROMPOPOULOS
Since the IMO’s 2020 global cap on sulphur in marine fuels is coming into force, ship-owners have to decide whether they will operate using e ...
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- The State Trading Corporation of India Ltd
- GAC Shipping (India) Pvt Ltd
- Orica Australia Pty. Ltd.
- Australian Coal Association
- Minerals Council of Australia
- Heidelberg Cement - Germany
- ASAPP Information Group - India
- Chettinad Cement Corporation Ltd - India
- SMC Global Power, Philippines
- Global Green Power PLC Corporation, Philippines
- Mintek Dendrill Indonesia
- Commonwealth Bank - Australia
- Indo Tambangraya Megah - Indonesia
- Mercator Lines Limited - India
- Energy Development Corp, Philippines
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- Antam Resourcindo - Indonesia
- The University of Queensland
- Orica Mining Services - Indonesia
- Coastal Gujarat Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- CIMB Investment Bank - Malaysia
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- Savvy Resources Ltd - HongKong
- Interocean Group of Companies - India
- Lanco Infratech Ltd - India
- Standard Chartered Bank - UAE
- Semirara Mining Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- SMG Consultants - Indonesia
- The Treasury - Australian Government
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Business Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Central Java Power - Indonesia
- Toyota Tsusho Corporation, Japan
- Directorate Of Revenue Intelligence - India
- Sindya Power Generating Company Private Ltd
- Maharashtra Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Ind-Barath Power Infra Limited - India
- Dalmia Cement Bharat India
- Bank of Tokyo Mitsubishi UFJ Ltd
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Sical Logistics Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Finance - Indonesia
- PTC India Limited - India
- Jaiprakash Power Ventures ltd
- White Energy Company Limited
- Aditya Birla Group - India
- Planning Commission, India
- Edison Trading Spa - Italy
- PowerSource Philippines DevCo
- Indogreen Group - Indonesia
- Parry Sugars Refinery, India
- New Zealand Coal & Carbon
- Indonesian Coal Mining Association
- Jorong Barutama Greston.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- McConnell Dowell - Australia
- Coal and Oil Company - UAE
- Siam City Cement PLC, Thailand
- Medco Energi Mining Internasional
- Georgia Ports Authority, United States
- Salva Resources Pvt Ltd - India
- Sojitz Corporation - Japan
- Timah Investasi Mineral - Indoneisa
- Sakthi Sugars Limited - India
- Anglo American - United Kingdom
- Mercuria Energy - Indonesia
- Siam City Cement - Thailand
- Renaissance Capital - South Africa
- Indian Energy Exchange, India
- Latin American Coal - Colombia
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Aboitiz Power Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Grasim Industreis Ltd - India
- Singapore Mercantile Exchange
- Kapuas Tunggal Persada - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Eastern Energy - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Kumho Petrochemical, South Korea
- Vizag Seaport Private Limited - India
- Electricity Generating Authority of Thailand
- Ceylon Electricity Board - Sri Lanka
- Essar Steel Hazira Ltd - India
- Sinarmas Energy and Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Barasentosa Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- IHS Mccloskey Coal Group - USA
- Ambuja Cements Ltd - India
- Indian Oil Corporation Limited
- London Commodity Brokers - England
- Africa Commodities Group - South Africa
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- Jindal Steel & Power Ltd - India
- Bhushan Steel Limited - India
- Rio Tinto Coal - Australia
- Therma Luzon, Inc, Philippines
- Marubeni Corporation - India
- Sree Jayajothi Cements Limited - India
- Iligan Light & Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Formosa Plastics Group - Taiwan
- Straits Asia Resources Limited - Singapore
- Sarangani Energy Corporation, Philippines
- Central Electricity Authority - India
- Australian Commodity Traders Exchange
- Borneo Indobara - Indonesia
- Energy Link Ltd, New Zealand
- Merrill Lynch Commodities Europe
- SN Aboitiz Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Bangladesh Power Developement Board
- Makarim & Taira - Indonesia
- India Bulls Power Limited - India
- Carbofer General Trading SA - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Indika Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Madhucon Powers Ltd - India
- Thai Mozambique Logistica
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- IEA Clean Coal Centre - UK
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Electricity Authority, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cigading International Bulk Terminal - Indonesia
- Vedanta Resources Plc - India
- Bukit Makmur.PT - Indonesia
- Petron Corporation, Philippines
- Thiess Contractors Indonesia
- Independent Power Producers Association of India
- Attock Cement Pakistan Limited
- Gujarat Sidhee Cement - India
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Kobexindo Tractors - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Trasteel International SA, Italy
- Riau Bara Harum - Indonesia
- Cement Manufacturers Association - India
- Bhatia International Limited - India
- Tamil Nadu electricity Board
- VISA Power Limited - India
- Power Finance Corporation Ltd., India
- Videocon Industries ltd - India
- Bhoruka Overseas - Indonesia
- Meralco Power Generation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Romanian Commodities Exchange
- Chamber of Mines of South Africa
- GMR Energy Limited - India
- International Coal Ventures Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Gujarat Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Larsen & Toubro Limited - India
- Samtan Co., Ltd - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parliament of New Zealand
- Star Paper Mills Limited - India
- Ministry of Transport, Egypt
- Agrawal Coal Company - India
- Xindia Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Baramulti Group, Indonesia
- Meenaskhi Energy Private Limited - India
- Uttam Galva Steels Limited - India
- MS Steel International - UAE
- Banpu Public Company Limited - Thailand
- Oldendorff Carriers - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Manunggal Multi Energi - Indonesia
- Posco Energy - South Korea
- Coalindo Energy - Indonesia
- Altura Mining Limited, Indonesia
- Kartika Selabumi Mining - Indonesia
- Goldman Sachs - Singapore
- Miang Besar Coal Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Globalindo Alam Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Economic Council, Georgia
- Deloitte Consulting - India
- Binh Thuan Hamico - Vietnam
- PNOC Exploration Corporation - Philippines
- Wood Mackenzie - Singapore
- Krishnapatnam Port Company Ltd. - India
- Bharathi Cement Corporation - India
- Bayan Resources Tbk. - Indonesia
- Mjunction Services Limited - India
- Eastern Coal Council - USA
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