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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, 17 August 18
MALAYSIA'S MANJUNG 4 - WORLD COAL ASSOCIATION
According to the IEA’s Energy Access Outlook 2017 report, nearly all of those who gained access to electricity worldwide in the last 16 years ...
Thursday, 16 August 18
COAL PRODUCTION AT 37.11 PERCENT OF FULL-YEAR TARGET - THE JAKARTA POST
Indonesian coal production was recorded at 180 million tons on Wednesday, or 37.11 percent of the government’s 485 million target this year.
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Tuesday, 14 August 18
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Monday, 13 August 18
A 50,200 DWT FIXED DELIVERY SINGAPORE TRIP VIA INDONESIA REDELIVERY CHINA IN THE LOW $10,000S - THE BALTIC BRIEFING
Capesize
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- SN Aboitiz Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- Australian Coal Association
- Marubeni Corporation - India
- Siam City Cement PLC, Thailand
- White Energy Company Limited
- Romanian Commodities Exchange
- Bayan Resources Tbk. - Indonesia
- Energy Development Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Energy Link Ltd, New Zealand
- Planning Commission, India
- MS Steel International - UAE
- Ambuja Cements Ltd - India
- Metalloyd Limited - United Kingdom
- The University of Queensland
- Karaikal Port Pvt Ltd - India
- Coalindo Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Pendopo Energi Batubara - Indonesia
- Minerals Council of Australia
- Bahari Cakrawala Sebuku - Indonesia
- India Bulls Power Limited - India
- Sree Jayajothi Cements Limited - India
- The State Trading Corporation of India Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Posco Energy - South Korea
- Agrawal Coal Company - India
- Mercator Lines Limited - India
- Chettinad Cement Corporation Ltd - India
- Deloitte Consulting - India
- Aditya Birla Group - India
- Ministry of Finance - Indonesia
- IEA Clean Coal Centre - UK
- Indika Energy - Indonesia
- PowerSource Philippines DevCo
- Madhucon Powers Ltd - India
- Ministry of Mines - Canada
- Attock Cement Pakistan Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Star Paper Mills Limited - India
- Orica Australia Pty. Ltd.
- Wood Mackenzie - Singapore
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bulk Trading Sa - Switzerland
- Indian Energy Exchange, India
- Neyveli Lignite Corporation Ltd, - India
- Kapuas Tunggal Persada - Indonesia
- Kobexindo Tractors - Indoneisa
- VISA Power Limited - India
- Grasim Industreis Ltd - India
- Orica Mining Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Videocon Industries ltd - India
- Kartika Selabumi Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Makarim & Taira - Indonesia
- Toyota Tsusho Corporation, Japan
- Medco Energi Mining Internasional
- Cement Manufacturers Association - India
- Tamil Nadu electricity Board
- Kideco Jaya Agung - Indonesia
- Banpu Public Company Limited - Thailand
- Electricity Authority, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- SMC Global Power, Philippines
- Power Finance Corporation Ltd., India
- Standard Chartered Bank - UAE
- Coal and Oil Company - UAE
- Global Business Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Indogreen Group - Indonesia
- Cigading International Bulk Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- Coastal Gujarat Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Barasentosa Lestari - Indonesia
- Rio Tinto Coal - Australia
- Essar Steel Hazira Ltd - India
- Uttam Galva Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Interocean Group of Companies - India
- Semirara Mining and Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Jindal Steel & Power Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Parry Sugars Refinery, India
- Indo Tambangraya Megah - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Meralco Power Generation, Philippines
- GMR Energy Limited - India
- Parliament of New Zealand
- Altura Mining Limited, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Salva Resources Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Therma Luzon, Inc, Philippines
- Thai Mozambique Logistica
- Petron Corporation, Philippines
- Chamber of Mines of South Africa
- Bhushan Steel Limited - India
- Riau Bara Harum - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate Of Revenue Intelligence - India
- Africa Commodities Group - South Africa
- Intertek Mineral Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Binh Thuan Hamico - Vietnam
- Aboitiz Power Corporation - Philippines
- Singapore Mercantile Exchange
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- Trasteel International SA, Italy
- GAC Shipping (India) Pvt Ltd
- Port Waratah Coal Services - Australia
- Mintek Dendrill Indonesia
- CIMB Investment Bank - Malaysia
- Sical Logistics Limited - India
- Maheswari Brothers Coal Limited - India
- Wilmar Investment Holdings
- LBH Netherlands Bv - Netherlands
- Oldendorff Carriers - Singapore
- Lanco Infratech Ltd - India
- Globalindo Alam Lestari - Indonesia
- Latin American Coal - Colombia
- McConnell Dowell - Australia
- IHS Mccloskey Coal Group - USA
- Goldman Sachs - Singapore
- Eastern Coal Council - USA
- Carbofer General Trading SA - India
- Mercuria Energy - Indonesia
- Siam City Cement - Thailand
- Sarangani Energy Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Independent Power Producers Association of India
- Larsen & Toubro Limited - India
- Central Electricity Authority - India
- Kalimantan Lumbung Energi - Indonesia
- CNBM International Corporation - China
- Edison Trading Spa - Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Renaissance Capital - South Africa
- Vedanta Resources Plc - India
- SMG Consultants - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Australian Commodity Traders Exchange
- Georgia Ports Authority, United States
- Electricity Generating Authority of Thailand
- ICICI Bank Limited - India
- Sakthi Sugars Limited - India
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- ASAPP Information Group - India
- Dalmia Cement Bharat India
- Bharathi Cement Corporation - India
- AsiaOL BioFuels Corp., Philippines
- Borneo Indobara - Indonesia
- London Commodity Brokers - England
- Economic Council, Georgia
- Antam Resourcindo - Indonesia
- Ministry of Transport, Egypt
- Baramulti Group, Indonesia
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- Indian Oil Corporation Limited
- South Luzon Thermal Energy Corporation
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- International Coal Ventures Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- The Treasury - Australian Government
- Kumho Petrochemical, South Korea
- PetroVietnam Power Coal Import and Supply Company
- Alfred C Toepfer International GmbH - Germany
- Malabar Cements Ltd - India
- Mjunction Services Limited - India
- New Zealand Coal & Carbon
- Bhatia International Limited - India
- Jaiprakash Power Ventures ltd
- Thiess Contractors Indonesia
- PTC India Limited - India
- Sindya Power Generating Company Private Ltd
- Simpson Spence & Young - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bangladesh Power Developement Board
- TeaM Sual Corporation - Philippines
- Sojitz Corporation - Japan
- Merrill Lynch Commodities Europe
- Leighton Contractors Pty Ltd - Australia
- Eastern Energy - Thailand
- Tata Chemicals Ltd - India
- Price Waterhouse Coopers - Russia
- Commonwealth Bank - Australia
- Maharashtra Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Jorong Barutama Greston.PT - Indonesia
- Anglo American - United Kingdom
- Global Coal Blending Company Limited - Australia
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Formosa Plastics Group - Taiwan
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
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