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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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Tuesday, 04 October 22
INDONESIAN COAL PRICE REFERENCE SURGE AGAIN TO RECORD HIGH
COALspot.com: Indonesian Coal Price Reference reached another record high in October as Russia's war in Ukraine continues to spark a surge in c ...
Sunday, 02 October 22
MISC STRENGTHENS ITS PARTNERSHIP WITH SEARIVER MARITIME
MISC Berhad (MISC) today announced that its subsidiaries Polaris LNG Three Pte. Ltd. and Polaris LNG Four Pte. Ltd. have secured long-term time cha ...
Thursday, 29 September 22
MARKET INSIGHT - INTERMODAL
This week, focus turns to the 38th APPEC Conference, where leading professionals from the global oil industry will discuss the future key drivers o ...
Thursday, 29 September 22
HIGH COAL PRICES REMAIN A CONCERN FOR DOMESTIC NON-FERROUS METAL COMPANIES - ICRA
According to ICRA on Monday, the high price of coal will have a negative effect on the profitability of domestic non-ferrous metal companies that m ...
Tuesday, 27 September 22
14% INCREASE IN EUROPEAN COAL DEMAND TO BE SHORT-TERM TREND - WOOD MACKENZIE
European seaborne thermal coal demand is projected to increase 14% or 12 million metric tonnes (Mt) this year to 98 Mt as it grapples with the curr ...
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- Cigading International Bulk Terminal - Indonesia
- Planning Commission, India
- Toyota Tsusho Corporation, Japan
- Mercator Lines Limited - India
- Deloitte Consulting - India
- Bhatia International Limited - India
- Agrawal Coal Company - India
- Banpu Public Company Limited - Thailand
- Ceylon Electricity Board - Sri Lanka
- Georgia Ports Authority, United States
- Sree Jayajothi Cements Limited - India
- Wilmar Investment Holdings
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- San Jose City I Power Corp, Philippines
- Mjunction Services Limited - India
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Central Java Power - Indonesia
- Thai Mozambique Logistica
- AsiaOL BioFuels Corp., Philippines
- Sinarmas Energy and Mining - Indonesia
- Videocon Industries ltd - India
- Ambuja Cements Ltd - India
- Indika Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Medco Energi Mining Internasional
- India Bulls Power Limited - India
- Xindia Steels Limited - India
- GVK Power & Infra Limited - India
- Star Paper Mills Limited - India
- Mintek Dendrill Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Independent Power Producers Association of India
- Intertek Mineral Services - Indonesia
- Renaissance Capital - South Africa
- Kepco SPC Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Lanco Infratech Ltd - India
- Kumho Petrochemical, South Korea
- Larsen & Toubro Limited - India
- Therma Luzon, Inc, Philippines
- McConnell Dowell - Australia
- Attock Cement Pakistan Limited
- Port Waratah Coal Services - Australia
- The University of Queensland
- Economic Council, Georgia
- Trasteel International SA, Italy
- Thiess Contractors Indonesia
- Ind-Barath Power Infra Limited - India
- Orica Australia Pty. Ltd.
- Indian Oil Corporation Limited
- Madhucon Powers Ltd - India
- Sical Logistics Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Petron Corporation, Philippines
- Sojitz Corporation - Japan
- Goldman Sachs - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Karbindo Abesyapradhi - Indoneisa
- Latin American Coal - Colombia
- Iligan Light & Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Oldendorff Carriers - Singapore
- Global Green Power PLC Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Power Finance Corporation Ltd., India
- Directorate General of MIneral and Coal - Indonesia
- TeaM Sual Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Bangladesh Power Developement Board
- PTC India Limited - India
- Karaikal Port Pvt Ltd - India
- Orica Mining Services - Indonesia
- Coastal Gujarat Power Limited - India
- Rio Tinto Coal - Australia
- Indogreen Group - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Wood Mackenzie - Singapore
- Indo Tambangraya Megah - Indonesia
- Aditya Birla Group - India
- CIMB Investment Bank - Malaysia
- New Zealand Coal & Carbon
- Siam City Cement PLC, Thailand
- Sindya Power Generating Company Private Ltd
- Carbofer General Trading SA - India
- LBH Netherlands Bv - Netherlands
- Global Business Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Parry Sugars Refinery, India
- The State Trading Corporation of India Ltd
- Gujarat Mineral Development Corp Ltd - India
- PNOC Exploration Corporation - Philippines
- Energy Development Corp, Philippines
- Ministry of Finance - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- The Treasury - Australian Government
- Meenaskhi Energy Private Limited - India
- MS Steel International - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Chettinad Cement Corporation Ltd - India
- Kideco Jaya Agung - Indonesia
- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
- Kapuas Tunggal Persada - Indonesia
- Altura Mining Limited, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Sakthi Sugars Limited - India
- Australian Coal Association
- Semirara Mining Corp, Philippines
- Vizag Seaport Private Limited - India
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Electricity Authority, New Zealand
- Anglo American - United Kingdom
- Heidelberg Cement - Germany
- Riau Bara Harum - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SN Aboitiz Power Inc, Philippines
- Mercuria Energy - Indonesia
- Posco Energy - South Korea
- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Energy - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Romanian Commodities Exchange
- Tamil Nadu electricity Board
- Indonesian Coal Mining Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Malabar Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Africa Commodities Group - South Africa
- Cement Manufacturers Association - India
- Parliament of New Zealand
- Leighton Contractors Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- IEA Clean Coal Centre - UK
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
- Kalimantan Lumbung Energi - Indonesia
- PowerSource Philippines DevCo
- Marubeni Corporation - India
- SMC Global Power, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Baramulti Group, Indonesia
- IHS Mccloskey Coal Group - USA
- Krishnapatnam Port Company Ltd. - India
- Binh Thuan Hamico - Vietnam
- Maheswari Brothers Coal Limited - India
- GMR Energy Limited - India
- Gujarat Sidhee Cement - India
- ICICI Bank Limited - India
- Billiton Holdings Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- VISA Power Limited - India
- Bulk Trading Sa - Switzerland
- Simpson Spence & Young - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Pendopo Energi Batubara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Jindal Steel & Power Ltd - India
- Salva Resources Pvt Ltd - India
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- Antam Resourcindo - Indonesia
- Ministry of Mines - Canada
- White Energy Company Limited
- Directorate Of Revenue Intelligence - India
- Interocean Group of Companies - India
- Standard Chartered Bank - UAE
- Price Waterhouse Coopers - Russia
- Energy Link Ltd, New Zealand
- Tata Chemicals Ltd - India
- Manunggal Multi Energi - Indonesia
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Central Electricity Authority - India
- Ministry of Transport, Egypt
- Grasim Industreis Ltd - India
- Vedanta Resources Plc - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Commonwealth Bank - Australia
- Timah Investasi Mineral - Indoneisa
- Singapore Mercantile Exchange
- SMG Consultants - Indonesia
- Bhushan Steel Limited - India
- Siam City Cement - Thailand
- Globalindo Alam Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- London Commodity Brokers - England
- Australian Commodity Traders Exchange
- Bharathi Cement Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Edison Trading Spa - Italy
- ASAPP Information Group - India
- Holcim Trading Pte Ltd - Singapore
- Indian Energy Exchange, India
- Savvy Resources Ltd - HongKong
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