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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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Thursday, 06 October 22
COAL INDIA ASKED TO ENHANCE SUPPLY TO THERMAL POWER PLANTS - IANS
With the festival season round the corner, Coal India Ltd. has been directed by the government to scale up dispatch to thermal power plants.
&n ...
Wednesday, 05 October 22
BUNKER PRICES DOWN AGAIN; IS THERE MORE TO COME? - INTEGR8 FUELS
It’s the economy…..”
VLSFO prices are now back to levels at the start of this year. After all the extremes of thi ...
Wednesday, 05 October 22
MARKET INSIGHT - INTERMODAL
Amid the looming western sanctions on Russia, the country is challenged to pivot its energy markets away from Europe and toward the East. Yet, Russ ...
Tuesday, 04 October 22
A REMARKABLE SHIFT IN FORTUNES HAS BEEN NOTED IN THE CRUDE OIL TANKER MARKETS - ALLIED SHIPPING
A remarkable shift in fortunes has been noted in the crude oil tanker markets over the past month, yet despite these shifts being seemingly in thei ...
Tuesday, 04 October 22
OIL PRICES COULD SOON RETURN TO $100 AS OPEC+ CONSIDERS ‘HISTORIC’ CUT, ANALYSTS SAY - CNBC
An influential alliance of some of the world’s most powerful oil producers is reportedly considering their largest output cut since the start ...
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- Aboitiz Power Corporation - Philippines
- Georgia Ports Authority, United States
- TNB Fuel Sdn Bhd - Malaysia
- Bangladesh Power Developement Board
- Leighton Contractors Pty Ltd - Australia
- Malabar Cements Ltd - India
- GVK Power & Infra Limited - India
- Power Finance Corporation Ltd., India
- Siam City Cement PLC, Thailand
- Cigading International Bulk Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Trasteel International SA, Italy
- India Bulls Power Limited - India
- Carbofer General Trading SA - India
- Gujarat Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- South Luzon Thermal Energy Corporation
- Australian Commodity Traders Exchange
- Independent Power Producers Association of India
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- Antam Resourcindo - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Economic Council, Georgia
- Toyota Tsusho Corporation, Japan
- Price Waterhouse Coopers - Russia
- Global Coal Blending Company Limited - Australia
- Global Green Power PLC Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Sojitz Corporation - Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- Interocean Group of Companies - India
- Mintek Dendrill Indonesia
- Ambuja Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- The University of Queensland
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- Renaissance Capital - South Africa
- Bhushan Steel Limited - India
- Kobexindo Tractors - Indoneisa
- Kaltim Prima Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- VISA Power Limited - India
- IEA Clean Coal Centre - UK
- Orica Australia Pty. Ltd.
- New Zealand Coal & Carbon
- Bhatia International Limited - India
- PNOC Exploration Corporation - Philippines
- Parliament of New Zealand
- Indian Oil Corporation Limited
- Samtan Co., Ltd - South Korea
- Mjunction Services Limited - India
- Ministry of Finance - Indonesia
- Jaiprakash Power Ventures ltd
- Merrill Lynch Commodities Europe
- Banpu Public Company Limited - Thailand
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- CIMB Investment Bank - Malaysia
- SN Aboitiz Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Globalindo Alam Lestari - Indonesia
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- Goldman Sachs - Singapore
- Ind-Barath Power Infra Limited - India
- Attock Cement Pakistan Limited
- Australian Coal Association
- Chettinad Cement Corporation Ltd - India
- Coal and Oil Company - UAE
- Indonesian Coal Mining Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement - Thailand
- San Jose City I Power Corp, Philippines
- Savvy Resources Ltd - HongKong
- Star Paper Mills Limited - India
- Heidelberg Cement - Germany
- Bhoruka Overseas - Indonesia
- MS Steel International - UAE
- CNBM International Corporation - China
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- Thai Mozambique Logistica
- Africa Commodities Group - South Africa
- GN Power Mariveles Coal Plant, Philippines
- GMR Energy Limited - India
- White Energy Company Limited
- Kohat Cement Company Ltd. - Pakistan
- Riau Bara Harum - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- ASAPP Information Group - India
- Mercator Lines Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Transport, Egypt
- Lanco Infratech Ltd - India
- Petron Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Posco Energy - South Korea
- Minerals Council of Australia
- Wood Mackenzie - Singapore
- Tata Chemicals Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Parry Sugars Refinery, India
- Kartika Selabumi Mining - Indonesia
- Thiess Contractors Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kumho Petrochemical, South Korea
- Wilmar Investment Holdings
- Orica Mining Services - Indonesia
- Mercuria Energy - Indonesia
- Makarim & Taira - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Maheswari Brothers Coal Limited - India
- Sical Logistics Limited - India
- Intertek Mineral Services - Indonesia
- Semirara Mining Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Standard Chartered Bank - UAE
- Grasim Industreis Ltd - India
- Sindya Power Generating Company Private Ltd
- Central Java Power - Indonesia
- Bulk Trading Sa - Switzerland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bharathi Cement Corporation - India
- Karaikal Port Pvt Ltd - India
- Indian Energy Exchange, India
- Coastal Gujarat Power Limited - India
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- Medco Energi Mining Internasional
- London Commodity Brokers - England
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- Electricity Authority, New Zealand
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- Kideco Jaya Agung - Indonesia
- ICICI Bank Limited - India
- Manunggal Multi Energi - Indonesia
- Romanian Commodities Exchange
- TeaM Sual Corporation - Philippines
- Planning Commission, India
- Formosa Plastics Group - Taiwan
- Rio Tinto Coal - Australia
- Metalloyd Limited - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Xindia Steels Limited - India
- Deloitte Consulting - India
- Videocon Industries ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Timah Investasi Mineral - Indoneisa
- Central Electricity Authority - India
- Kalimantan Lumbung Energi - Indonesia
- Eastern Energy - Thailand
- Rashtriya Ispat Nigam Limited - India
- Uttam Galva Steels Limited - India
- Borneo Indobara - Indonesia
- Simpson Spence & Young - Indonesia
- Salva Resources Pvt Ltd - India
- Edison Trading Spa - Italy
- Vedanta Resources Plc - India
- Larsen & Toubro Limited - India
- PTC India Limited - India
- Pendopo Energi Batubara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Meralco Power Generation, Philippines
- Chamber of Mines of South Africa
- Indo Tambangraya Megah - Indonesia
- Meenaskhi Energy Private Limited - India
- Electricity Generating Authority of Thailand
- International Coal Ventures Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Tamil Nadu electricity Board
- The Treasury - Australian Government
- Kapuas Tunggal Persada - Indonesia
- Altura Mining Limited, Indonesia
- Baramulti Group, Indonesia
- Barasentosa Lestari - Indonesia
- SMC Global Power, Philippines
- Oldendorff Carriers - Singapore
- Global Business Power Corporation, Philippines
- Ministry of Mines - Canada
- Marubeni Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Gujarat Sidhee Cement - India
- Semirara Mining and Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- McConnell Dowell - Australia
- Dalmia Cement Bharat India
- Madhucon Powers Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Iligan Light & Power Inc, Philippines
- Indogreen Group - Indonesia
- Energy Development Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Eastern Coal Council - USA
- Vijayanagar Sugar Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Billiton Holdings Pty Ltd - Australia
- Aditya Birla Group - India
- Sakthi Sugars Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Krishnapatnam Port Company Ltd. - India
- Port Waratah Coal Services - Australia
- Cement Manufacturers Association - India
- Sree Jayajothi Cements Limited - India
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