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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, 21 February 18
SHIPPING MARKET INSIGHT - KONSTANTINOS KONTOMICHIS
2017 proved to be a relatively good year with positive margins for the Dry Bulk market. Especially during the last quarter of the year everyone can ...
Tuesday, 20 February 18
INDIA: COAL IMPORT RISES BY 12 PER CENT TO 18 MILLION TONNES IN JANUARY - PTI
The country’s coal import increased by 12.4 per cent to 18.49 million tonnes (MT) in January, against 16.
44 MT in the same month of the ...
Monday, 19 February 18
JOINT INSURANCE - WHY SHOULD YOU CARE? - SKULD
KNOWLEDGE TO ELEVATE
It is neither controversial nor new to say that co-assureds under a joint insurance policy cannot claim against each othe ...
Friday, 16 February 18
U.S. WEEKLY COAL OUTPUT DOWN 4.5 PER CENT WEEK OVER WEEK, EIA DATA SHOWS
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 15.2 million short tons ...
Thursday, 15 February 18
INDIA: THERMAL POWER PLANTS UNDER STRESS ON RISING COAL, FREIGHT COSTS - BUSINESS STANDARD
Coal-based power plants are feeling the heat of spike in thermal grade coal prices and railway freight costs.
Prices of thermal grade coal sin ...
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- Gujarat Sidhee Cement - India
- Neyveli Lignite Corporation Ltd, - India
- Thiess Contractors Indonesia
- TeaM Sual Corporation - Philippines
- Aditya Birla Group - India
- Kohat Cement Company Ltd. - Pakistan
- Australian Coal Association
- India Bulls Power Limited - India
- Malabar Cements Ltd - India
- Riau Bara Harum - Indonesia
- Vizag Seaport Private Limited - India
- Intertek Mineral Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- Power Finance Corporation Ltd., India
- Heidelberg Cement - Germany
- Tata Chemicals Ltd - India
- Romanian Commodities Exchange
- Interocean Group of Companies - India
- Siam City Cement - Thailand
- Xindia Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Orica Australia Pty. Ltd.
- TNB Fuel Sdn Bhd - Malaysia
- ICICI Bank Limited - India
- Merrill Lynch Commodities Europe
- Bhatia International Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- PTC India Limited - India
- Chettinad Cement Corporation Ltd - India
- Parry Sugars Refinery, India
- Ind-Barath Power Infra Limited - India
- South Luzon Thermal Energy Corporation
- Karbindo Abesyapradhi - Indoneisa
- European Bulk Services B.V. - Netherlands
- Bhoruka Overseas - Indonesia
- Coalindo Energy - Indonesia
- Ministry of Transport, Egypt
- Electricity Authority, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Dalmia Cement Bharat India
- Formosa Plastics Group - Taiwan
- Indogreen Group - Indonesia
- Billiton Holdings Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Timah Investasi Mineral - Indoneisa
- Simpson Spence & Young - Indonesia
- Siam City Cement PLC, Thailand
- Maharashtra Electricity Regulatory Commission - India
- Parliament of New Zealand
- Banpu Public Company Limited - Thailand
- Marubeni Corporation - India
- GAC Shipping (India) Pvt Ltd
- Salva Resources Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Kumho Petrochemical, South Korea
- Planning Commission, India
- Iligan Light & Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Goldman Sachs - Singapore
- Wood Mackenzie - Singapore
- Global Coal Blending Company Limited - Australia
- Indian Energy Exchange, India
- Star Paper Mills Limited - India
- Vedanta Resources Plc - India
- MS Steel International - UAE
- Price Waterhouse Coopers - Russia
- The University of Queensland
- Eastern Coal Council - USA
- Independent Power Producers Association of India
- GVK Power & Infra Limited - India
- London Commodity Brokers - England
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- Chamber of Mines of South Africa
- ASAPP Information Group - India
- Holcim Trading Pte Ltd - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- Medco Energi Mining Internasional
- Global Green Power PLC Corporation, Philippines
- Sakthi Sugars Limited - India
- Borneo Indobara - Indonesia
- Ministry of Finance - Indonesia
- Bhushan Steel Limited - India
- Wilmar Investment Holdings
- Aboitiz Power Corporation - Philippines
- Attock Cement Pakistan Limited
- Central Electricity Authority - India
- Orica Mining Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Trasteel International SA, Italy
- Sical Logistics Limited - India
- Standard Chartered Bank - UAE
- Asmin Koalindo Tuhup - Indonesia
- Sree Jayajothi Cements Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Binh Thuan Hamico - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The Treasury - Australian Government
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Indo Tambangraya Megah - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Jindal Steel & Power Ltd - India
- The State Trading Corporation of India Ltd
- International Coal Ventures Pvt Ltd - India
- Energy Development Corp, Philippines
- Meralco Power Generation, Philippines
- Mjunction Services Limited - India
- Grasim Industreis Ltd - India
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- Maheswari Brothers Coal Limited - India
- VISA Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- Jaiprakash Power Ventures ltd
- McConnell Dowell - Australia
- Mercuria Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Coastal Gujarat Power Limited - India
- Central Java Power - Indonesia
- LBH Netherlands Bv - Netherlands
- Sojitz Corporation - Japan
- Videocon Industries ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- Commonwealth Bank - Australia
- Alfred C Toepfer International GmbH - Germany
- SMC Global Power, Philippines
- PowerSource Philippines DevCo
- PetroVietnam Power Coal Import and Supply Company
- Mercator Lines Limited - India
- Kepco SPC Power Corporation, Philippines
- Renaissance Capital - South Africa
- Deloitte Consulting - India
- Kobexindo Tractors - Indoneisa
- Energy Link Ltd, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bayan Resources Tbk. - Indonesia
- Bharathi Cement Corporation - India
- Singapore Mercantile Exchange
- White Energy Company Limited
- Australian Commodity Traders Exchange
- Kaltim Prima Coal - Indonesia
- Thai Mozambique Logistica
- Antam Resourcindo - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Indian Oil Corporation Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rio Tinto Coal - Australia
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- Indika Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Ceylon Electricity Board - Sri Lanka
- Madhucon Powers Ltd - India
- Baramulti Group, Indonesia
- Mintek Dendrill Indonesia
- Economic Council, Georgia
- IHS Mccloskey Coal Group - USA
- Ambuja Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Cement Manufacturers Association - India
- Bukit Makmur.PT - Indonesia
- Eastern Energy - Thailand
- IEA Clean Coal Centre - UK
- Meenaskhi Energy Private Limited - India
- Carbofer General Trading SA - India
- Gujarat Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- CNBM International Corporation - China
- Cigading International Bulk Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Bangladesh Power Developement Board
- Georgia Ports Authority, United States
- Ministry of Mines - Canada
- Pipit Mutiara Jaya. PT, Indonesia
- Africa Commodities Group - South Africa
- Electricity Generating Authority of Thailand
- San Jose City I Power Corp, Philippines
- Global Business Power Corporation, Philippines
- Tamil Nadu electricity Board
- Oldendorff Carriers - Singapore
- Posco Energy - South Korea
- Minerals Council of Australia
- Uttam Galva Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Makarim & Taira - Indonesia
- Lanco Infratech Ltd - India
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