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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, 17 August 22
CHINA'S COAL-RICH SHANXI MAKES STRIDES IN HIGH-QUALITY DEVELOPMENT - XINHUA
Shanxi, a major coal-producing province in north China, has made continuous advances in high-quality development over the past decade, according to ...
Wednesday, 17 August 22
PAXOCEAN, HONG LAM MARINE AND BUREAU VERITAS SIGN MOU TO DEVELOP AMMONIA BUNKER VESSEL DESIGN - BUREAU VERITAS
PaxOcean Engineering Pte. Ltd. has signed a Memorandum of Understanding (MOU) with Singapore-based bunker vessel operator Hong Lam Marine and class ...
Wednesday, 17 August 22
GOODFUELSS ASIA-PACIFIC BRANCH KICKSTARTS SUSTAINABLE BIOFUEL DELIVERIES WITH NYK AS FIRST CLIENT - GOOD FUELS
GoodFuels, the leading biofuels pioneer for the global transport industry, has today announced that it has successfully supplied sustainable marine ...
Tuesday, 16 August 22
EU BAN ON RUSSIAN COAL IMPORTS COMES INTO FORCE - DEUTSCHE WELLE
The European Union banned Russian coal imports in response to the invasion of Ukraine as part of sanctions in April. Since then, it’s been sc ...
Thursday, 11 August 22
MARKET INSIGHT - INTERMODAL
On July 22nd, Ukraine signed a deal with Russia to release 22mn tons of grain from Ukraine’s 3 major ports (Yuzhny, Chornomorsk, Odesa). Such ...
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- Karbindo Abesyapradhi - Indoneisa
- VISA Power Limited - India
- Georgia Ports Authority, United States
- White Energy Company Limited
- Edison Trading Spa - Italy
- Bharathi Cement Corporation - India
- Ministry of Finance - Indonesia
- Kepco SPC Power Corporation, Philippines
- Dalmia Cement Bharat India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Leighton Contractors Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Singapore Mercantile Exchange
- Oldendorff Carriers - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- Tamil Nadu electricity Board
- Formosa Plastics Group - Taiwan
- PowerSource Philippines DevCo
- Anglo American - United Kingdom
- Grasim Industreis Ltd - India
- Bayan Resources Tbk. - Indonesia
- Antam Resourcindo - Indonesia
- Kumho Petrochemical, South Korea
- Ministry of Mines - Canada
- Jaiprakash Power Ventures ltd
- Sarangani Energy Corporation, Philippines
- MS Steel International - UAE
- PTC India Limited - India
- Essar Steel Hazira Ltd - India
- Rio Tinto Coal - Australia
- Electricity Generating Authority of Thailand
- Indogreen Group - Indonesia
- Attock Cement Pakistan Limited
- Eastern Coal Council - USA
- Ambuja Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Thiess Contractors Indonesia
- IHS Mccloskey Coal Group - USA
- Timah Investasi Mineral - Indoneisa
- GVK Power & Infra Limited - India
- McConnell Dowell - Australia
- Vedanta Resources Plc - India
- Xindia Steels Limited - India
- Economic Council, Georgia
- Krishnapatnam Port Company Ltd. - India
- Posco Energy - South Korea
- Binh Thuan Hamico - Vietnam
- The State Trading Corporation of India Ltd
- Sinarmas Energy and Mining - Indonesia
- Port Waratah Coal Services - Australia
- Romanian Commodities Exchange
- LBH Netherlands Bv - Netherlands
- Carbofer General Trading SA - India
- Mintek Dendrill Indonesia
- Kideco Jaya Agung - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Coalindo Energy - Indonesia
- Marubeni Corporation - India
- San Jose City I Power Corp, Philippines
- Medco Energi Mining Internasional
- Parry Sugars Refinery, India
- Bukit Baiduri Energy - Indonesia
- Sojitz Corporation - Japan
- Makarim & Taira - Indonesia
- Banpu Public Company Limited - Thailand
- Commonwealth Bank - Australia
- The University of Queensland
- Coal and Oil Company - UAE
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- European Bulk Services B.V. - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Larsen & Toubro Limited - India
- Latin American Coal - Colombia
- Malabar Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- ASAPP Information Group - India
- Mjunction Services Limited - India
- New Zealand Coal & Carbon
- Altura Mining Limited, Indonesia
- Maheswari Brothers Coal Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PNOC Exploration Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Mercuria Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Agrawal Coal Company - India
- Orica Mining Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Uttam Galva Steels Limited - India
- Gujarat Sidhee Cement - India
- Mercator Lines Limited - India
- Energy Development Corp, Philippines
- ICICI Bank Limited - India
- Indika Energy - Indonesia
- Borneo Indobara - Indonesia
- Vizag Seaport Private Limited - India
- Videocon Industries ltd - India
- Cement Manufacturers Association - India
- Electricity Authority, New Zealand
- Australian Coal Association
- Bangladesh Power Developement Board
- Intertek Mineral Services - Indonesia
- Goldman Sachs - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petron Corporation, Philippines
- Central Electricity Authority - India
- Billiton Holdings Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- Pendopo Energi Batubara - Indonesia
- London Commodity Brokers - England
- Bhoruka Overseas - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Renaissance Capital - South Africa
- Samtan Co., Ltd - South Korea
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining Corp, Philippines
- Australian Commodity Traders Exchange
- Coastal Gujarat Power Limited - India
- Global Coal Blending Company Limited - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Deloitte Consulting - India
- Independent Power Producers Association of India
- Global Green Power PLC Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- Kobexindo Tractors - Indoneisa
- Meralco Power Generation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Cigading International Bulk Terminal - Indonesia
- Trasteel International SA, Italy
- Kalimantan Lumbung Energi - Indonesia
- Star Paper Mills Limited - India
- Tata Chemicals Ltd - India
- Baramulti Group, Indonesia
- Straits Asia Resources Limited - Singapore
- Savvy Resources Ltd - HongKong
- Planning Commission, India
- Simpson Spence & Young - Indonesia
- GAC Shipping (India) Pvt Ltd
- South Luzon Thermal Energy Corporation
- Price Waterhouse Coopers - Russia
- AsiaOL BioFuels Corp., Philippines
- Sakthi Sugars Limited - India
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- Riau Bara Harum - Indonesia
- Thai Mozambique Logistica
- Minerals Council of Australia
- Vijayanagar Sugar Pvt Ltd - India
- India Bulls Power Limited - India
- Kaltim Prima Coal - Indonesia
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- Energy Link Ltd, New Zealand
- Siam City Cement PLC, Thailand
- Kapuas Tunggal Persada - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Barasentosa Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- Bulk Trading Sa - Switzerland
- Toyota Tsusho Corporation, Japan
- Central Java Power - Indonesia
- Ministry of Transport, Egypt
- Merrill Lynch Commodities Europe
- Chettinad Cement Corporation Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement - Thailand
- Parliament of New Zealand
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- Interocean Group of Companies - India
- Petrochimia International Co. Ltd.- Taiwan
- Aboitiz Power Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- SMG Consultants - Indonesia
- IEA Clean Coal Centre - UK
- CIMB Investment Bank - Malaysia
- Bukit Makmur.PT - Indonesia
- Bhatia International Limited - India
- Heidelberg Cement - Germany
- Kartika Selabumi Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Standard Chartered Bank - UAE
- Therma Luzon, Inc, Philippines
- Chamber of Mines of South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Power Finance Corporation Ltd., India
- Gujarat Mineral Development Corp Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- SMC Global Power, Philippines
- Miang Besar Coal Terminal - Indonesia
- TeaM Sual Corporation - Philippines
- Indonesian Coal Mining Association
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Oil Corporation Limited
- GN Power Mariveles Coal Plant, Philippines
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