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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 September 22
INDONESIA COAL PRICE REFERENCE SLIPS SLIGHTLY IN SEPTEMBER 2022
COALspot.com: Indonesian Coal Price Reference for September delivery drops 0.74 per cent month on month.
The Indonesian Coal Price R ...
Friday, 02 September 22
ABM INVESTAMA BUYS 30% GEMS SHARES FOR US$ 420 MILLION
PT ABM Investama Tbk through its indirect subsidiary, bought a 30% stake in the PT Golden Energy Mines Tbk for US$ 420 million or around Rp 6.2 tri ...
Wednesday, 31 August 22
MARKET INSIGHT - INTERMODAL
Scorching temperatures and extremely dry conditions during the Northern hemisphere summer have been drying crops. Yield prospects have subsided in ...
Tuesday, 23 August 22
HIGH COAL PRICES COULD BOOST INDONESIA'S ENERGY TRANSITION - IEEFA
Global coal prices have reached an all-time high as countries stop purchasing Russian coal amidst the Russia-Ukraine conflict. Indonesian coal comp ...
Tuesday, 23 August 22
A COMBINED US$6.8-BILLION CASH BALANCE OF INDONESIAN COAL COMPANIES COULD PROVIDE FOR TIMELY INVESTMENTS IN GREEN TRANSITION - IEEFA
A combined US$6.8-billion cash balance of Indonesian coal companies could provide for timely investments in green transition
The opp ...
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- Bahari Cakrawala Sebuku - Indonesia
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Aditya Birla Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Anglo American - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Wilmar Investment Holdings
- Timah Investasi Mineral - Indoneisa
- Thiess Contractors Indonesia
- Eastern Energy - Thailand
- Siam City Cement PLC, Thailand
- Orica Australia Pty. Ltd.
- SMC Global Power, Philippines
- PTC India Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Kumho Petrochemical, South Korea
- Indika Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Jaiprakash Power Ventures ltd
- Planning Commission, India
- Oldendorff Carriers - Singapore
- Altura Mining Limited, Indonesia
- Wood Mackenzie - Singapore
- Straits Asia Resources Limited - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Intertek Mineral Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Finance - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Parliament of New Zealand
- Baramulti Group, Indonesia
- Samtan Co., Ltd - South Korea
- Coastal Gujarat Power Limited - India
- Simpson Spence & Young - Indonesia
- Mercuria Energy - Indonesia
- Deloitte Consulting - India
- Merrill Lynch Commodities Europe
- Metalloyd Limited - United Kingdom
- San Jose City I Power Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- Sindya Power Generating Company Private Ltd
- Gujarat Sidhee Cement - India
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Global Coal Blending Company Limited - Australia
- OPG Power Generation Pvt Ltd - India
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Georgia Ports Authority, United States
- New Zealand Coal & Carbon
- London Commodity Brokers - England
- Bhoruka Overseas - Indonesia
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- Bhatia International Limited - India
- Semirara Mining Corp, Philippines
- Indonesian Coal Mining Association
- Bangladesh Power Developement Board
- IEA Clean Coal Centre - UK
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- Coal and Oil Company - UAE
- ASAPP Information Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Borneo Indobara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Central Electricity Authority - India
- Binh Thuan Hamico - Vietnam
- Star Paper Mills Limited - India
- Carbofer General Trading SA - India
- Sojitz Corporation - Japan
- Central Java Power - Indonesia
- CIMB Investment Bank - Malaysia
- Posco Energy - South Korea
- Chamber of Mines of South Africa
- Jorong Barutama Greston.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- Neyveli Lignite Corporation Ltd, - India
- Singapore Mercantile Exchange
- Bharathi Cement Corporation - India
- PNOC Exploration Corporation - Philippines
- Trasteel International SA, Italy
- Karbindo Abesyapradhi - Indoneisa
- The Treasury - Australian Government
- Miang Besar Coal Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Indian Energy Exchange, India
- Latin American Coal - Colombia
- Rio Tinto Coal - Australia
- Price Waterhouse Coopers - Russia
- Pipit Mutiara Jaya. PT, Indonesia
- Kartika Selabumi Mining - Indonesia
- Xindia Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining and Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- MS Steel International - UAE
- Jindal Steel & Power Ltd - India
- Agrawal Coal Company - India
- LBH Netherlands Bv - Netherlands
- India Bulls Power Limited - India
- Sree Jayajothi Cements Limited - India
- Meralco Power Generation, Philippines
- Interocean Group of Companies - India
- Larsen & Toubro Limited - India
- Karaikal Port Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Savvy Resources Ltd - HongKong
- Iligan Light & Power Inc, Philippines
- Ministry of Transport, Egypt
- Mintek Dendrill Indonesia
- Bukit Makmur.PT - Indonesia
- Siam City Cement - Thailand
- Chettinad Cement Corporation Ltd - India
- Romanian Commodities Exchange
- Vizag Seaport Private Limited - India
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- Mercator Lines Limited - India
- Edison Trading Spa - Italy
- Eastern Coal Council - USA
- Energy Development Corp, Philippines
- Indian Oil Corporation Limited
- Globalindo Alam Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Economic Council, Georgia
- Vedanta Resources Plc - India
- Meenaskhi Energy Private Limited - India
- Banpu Public Company Limited - Thailand
- Ministry of Mines - Canada
- Grasim Industreis Ltd - India
- Tamil Nadu electricity Board
- Attock Cement Pakistan Limited
- Goldman Sachs - Singapore
- VISA Power Limited - India
- Riau Bara Harum - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Minerals Council of Australia
- Electricity Authority, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Independent Power Producers Association of India
- Alfred C Toepfer International GmbH - Germany
- Dalmia Cement Bharat India
- Directorate General of MIneral and Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bukit Baiduri Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Australian Coal Association
- Formosa Plastics Group - Taiwan
- Indo Tambangraya Megah - Indonesia
- Uttam Galva Steels Limited - India
- Lanco Infratech Ltd - India
- Antam Resourcindo - Indonesia
- Port Waratah Coal Services - Australia
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- The State Trading Corporation of India Ltd
- White Energy Company Limited
- Australian Commodity Traders Exchange
- GAC Shipping (India) Pvt Ltd
- Heidelberg Cement - Germany
- Global Green Power PLC Corporation, Philippines
- GVK Power & Infra Limited - India
- McConnell Dowell - Australia
- IHS Mccloskey Coal Group - USA
- Electricity Generating Authority of Thailand
- GMR Energy Limited - India
- Therma Luzon, Inc, Philippines
- South Luzon Thermal Energy Corporation
- Ambuja Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Essar Steel Hazira Ltd - India
- Indogreen Group - Indonesia
- Malabar Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thai Mozambique Logistica
- The University of Queensland
- Tata Chemicals Ltd - India
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- Medco Energi Mining Internasional
- Africa Commodities Group - South Africa
- Manunggal Multi Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Aboitiz Power Corporation - Philippines
- Makarim & Taira - Indonesia
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Parry Sugars Refinery, India
- PowerSource Philippines DevCo
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bayan Resources Tbk. - Indonesia
- Renaissance Capital - South Africa
- Madhucon Powers Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Leighton Contractors Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Sical Logistics Limited - India
- Kepco SPC Power Corporation, Philippines
- SMG Consultants - Indonesia
- Orica Mining Services - Indonesia
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Marubeni Corporation - India
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