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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, 23 August 22
SHIPPING INDUSTRY TO REMOVE THE INDIAN OCEAN HIGH RISK AREA - BIMCO
After more than a decade of effective threat-reducing counter-piracy operations the shipping industry has removed the ‘Indian Ocean High Risk ...
Tuesday, 23 August 22
SHIPPING: GLOBAL TAX REFORM - WATSON FARLEY & WILLIAMS
OECD rules designed to implement a global minimum corporate tax rate for very large multinational groups have now been published and are expected t ...
Tuesday, 23 August 22
PARTIES CONCLUDE JOINT R&D AGREEMENT FOR WORLD’S FIRST AMMONIA FLOATING STORAGE AND REGASIFICATION BARGE CONTRIBUTING TO PROMOTING THE EARLY INTRODUCTION OF AMMONIA FUEL - NYK
NYK Line, Nihon Shipyard Co., Ltd. (NSY), ClassNK, and IHI Corporation (IHI) signed a joint research and development agreement for the commercializ ...
Monday, 22 August 22
INDONESIAN GOVERNMENT IMPOSED ON NEW PROGRESSIVE ROYALTIES FOR COAL
Indonesian President Joko Widodo has signed a Government Regulation (Number 26 of 2022) on 15 August 2022 related to the progressive royalty rates ...
Monday, 22 August 22
CHINA'S JULY RUSSIAN COAL IMPORTS HIT 5-YR HIGH AS WEST SHUNS MOSCOW - REUTERS
China’s coal imports from Russia jumped 14% in July from a year earlier to their highest in at least five years, as China bought discounted c ...
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- Parliament of New Zealand
- Coal and Oil Company - UAE
- Coalindo Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Romanian Commodities Exchange
- Singapore Mercantile Exchange
- Cigading International Bulk Terminal - Indonesia
- Parry Sugars Refinery, India
- Georgia Ports Authority, United States
- Jindal Steel & Power Ltd - India
- Savvy Resources Ltd - HongKong
- Global Coal Blending Company Limited - Australia
- Sinarmas Energy and Mining - Indonesia
- Marubeni Corporation - India
- Kideco Jaya Agung - Indonesia
- Intertek Mineral Services - Indonesia
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
- Dalmia Cement Bharat India
- CIMB Investment Bank - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Borneo Indobara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Meralco Power Generation, Philippines
- Semirara Mining Corp, Philippines
- SMG Consultants - Indonesia
- Agrawal Coal Company - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coastal Gujarat Power Limited - India
- Meenaskhi Energy Private Limited - India
- Straits Asia Resources Limited - Singapore
- Maheswari Brothers Coal Limited - India
- Makarim & Taira - Indonesia
- SMC Global Power, Philippines
- London Commodity Brokers - England
- TNB Fuel Sdn Bhd - Malaysia
- PTC India Limited - India
- Standard Chartered Bank - UAE
- Economic Council, Georgia
- Trasteel International SA, Italy
- Kobexindo Tractors - Indoneisa
- Sindya Power Generating Company Private Ltd
- Heidelberg Cement - Germany
- Indian Energy Exchange, India
- LBH Netherlands Bv - Netherlands
- Siam City Cement PLC, Thailand
- Latin American Coal - Colombia
- Vedanta Resources Plc - India
- Sical Logistics Limited - India
- Jaiprakash Power Ventures ltd
- GN Power Mariveles Coal Plant, Philippines
- Iligan Light & Power Inc, Philippines
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bhatia International Limited - India
- India Bulls Power Limited - India
- Global Business Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Indo Tambangraya Megah - Indonesia
- Grasim Industreis Ltd - India
- Edison Trading Spa - Italy
- Manunggal Multi Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Energy Link Ltd, New Zealand
- Malabar Cements Ltd - India
- Mercuria Energy - Indonesia
- Ministry of Mines - Canada
- Holcim Trading Pte Ltd - Singapore
- Essar Steel Hazira Ltd - India
- Lanco Infratech Ltd - India
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
- Eastern Energy - Thailand
- Star Paper Mills Limited - India
- Semirara Mining and Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Australian Coal Association
- Petron Corporation, Philippines
- Mintek Dendrill Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Aditya Birla Group - India
- South Luzon Thermal Energy Corporation
- Simpson Spence & Young - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- ICICI Bank Limited - India
- Therma Luzon, Inc, Philippines
- Bhushan Steel Limited - India
- Price Waterhouse Coopers - Russia
- Billiton Holdings Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Thai Mozambique Logistica
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- Rashtriya Ispat Nigam Limited - India
- ASAPP Information Group - India
- GAC Shipping (India) Pvt Ltd
- Larsen & Toubro Limited - India
- Banpu Public Company Limited - Thailand
- Africa Commodities Group - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Toyota Tsusho Corporation, Japan
- Eastern Coal Council - USA
- AsiaOL BioFuels Corp., Philippines
- PowerSource Philippines DevCo
- Indogreen Group - Indonesia
- Kartika Selabumi Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The University of Queensland
- Sojitz Corporation - Japan
- The Treasury - Australian Government
- Uttam Galva Steels Limited - India
- Salva Resources Pvt Ltd - India
- Tata Chemicals Ltd - India
- Posco Energy - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Electricity Authority, New Zealand
- Kaltim Prima Coal - Indonesia
- Wood Mackenzie - Singapore
- Merrill Lynch Commodities Europe
- Bukit Asam (Persero) Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Antam Resourcindo - Indonesia
- Commonwealth Bank - Australia
- Deloitte Consulting - India
- Alfred C Toepfer International GmbH - Germany
- Videocon Industries ltd - India
- Sree Jayajothi Cements Limited - India
- Central Java Power - Indonesia
- Pendopo Energi Batubara - Indonesia
- Oldendorff Carriers - Singapore
- Central Electricity Authority - India
- Formosa Plastics Group - Taiwan
- Anglo American - United Kingdom
- Bhoruka Overseas - Indonesia
- Orica Mining Services - Indonesia
- Kumho Petrochemical, South Korea
- Mercator Lines Limited - India
- TeaM Sual Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Kapuas Tunggal Persada - Indonesia
- Bangladesh Power Developement Board
- Indika Energy - Indonesia
- GVK Power & Infra Limited - India
- Rio Tinto Coal - Australia
- White Energy Company Limited
- Indian Oil Corporation Limited
- Baramulti Group, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Transport, Egypt
- Gujarat Sidhee Cement - India
- Renaissance Capital - South Africa
- Bukit Makmur.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Timah Investasi Mineral - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Interocean Group of Companies - India
- McConnell Dowell - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Commodity Traders Exchange
- Global Green Power PLC Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Sakthi Sugars Limited - India
- Vizag Seaport Private Limited - India
- GMR Energy Limited - India
- Ind-Barath Power Infra Limited - India
- The State Trading Corporation of India Ltd
- Energy Development Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indonesian Coal Mining Association
- Krishnapatnam Port Company Ltd. - India
- Xindia Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Carbofer General Trading SA - India
- Ceylon Electricity Board - Sri Lanka
- Ministry of Finance - Indonesia
- Wilmar Investment Holdings
- Bharathi Cement Corporation - India
- Metalloyd Limited - United Kingdom
- Orica Australia Pty. Ltd.
- Altura Mining Limited, Indonesia
- Sarangani Energy Corporation, Philippines
- Attock Cement Pakistan Limited
- PetroVietnam Power Coal Import and Supply Company
- Asmin Koalindo Tuhup - Indonesia
- Electricity Generating Authority of Thailand
- New Zealand Coal & Carbon
- Mjunction Services Limited - India
- Gujarat Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- MS Steel International - UAE
- Minerals Council of Australia
- Cement Manufacturers Association - India
- Vijayanagar Sugar Pvt Ltd - India
- Medco Energi Mining Internasional
- Madhucon Powers Ltd - India
- IHS Mccloskey Coal Group - USA
- PNOC Exploration Corporation - Philippines
- Tamil Nadu electricity Board
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